Few analysts think coal will ever return to the dominant position it once held in the nation’s power generation and world energy market, but one industry player believes all indications are the coal industry has turned the corner and will continue to attain a position of strength going forward.
“It’s coming back. We’re off the canvas, that’s the way I’d put it,” said Luke Popovich Vice-President for External Communications with the National Mining Association during Monday’s MetroNews Talkline. “We were on the canvas a couple of years ago. Now we’re of the canvas, standing upright, and punching back. There is clearly a sense of encouragement in the air and greater confidence than we’ve had in years.”
A recent Department of Energy report concluded coal’s biggest demise in recent years was the revolutionary production levels of natural gas, but also acknowledged the regulatory environment hit coal at the same time and staggered the industry. Popovich viewed the DOE’s report as accurate and a fair portrayal of what has happened. But, he said almost everyone who looks at the nation’s energy market today believes natural gas is poised for a price surge, which would greatly strengthen coal’s position, especially in the domestic market.
“No one’s expecting coal to come back to 51 percent of the market or anything close to that,” he said. “But we’ve got a big supply chain we’re still able to support. We’re still very important to the grid. We’re still a third of the electricity generation in this country.”
Liquefied Natural Gas is gaining market share overseas. Construction of four new terminals to handle LNG in the United States, which is presently distributed through one terminal, has Popovich and other industry officials confident the demand for natural gas outside the U.S. borders will greatly rise in the next two years.
“If investment follows and these four LNG terminals are built, we can expect to see a lot more gas going off shore,” said Popovich. “Presumably, that would have an impact on supply and demand here in the United States and give coal even more headroom in the future.”
Coal exports have jumped in recent months, ironically to some European nations which had shunned coal in recent years.
“Even in countries who were turning their nose up at us for burning coal,” said Popovich. “Particularly in China and India, we’re seeing more coal, steam and metallurgical, for building out grids and providing electricity.”
Subsidies for alternative energy are also a stumbling block for coal and other forms of energy according to Popovich. Despite those, he said looking forward, coal is more stable and poised for growth in the next few years for a couple of reasons.
“We don’t have a government that’s seeking our destruction through regulation,” he said. “Number two, I don’t see and I don’t think most analysts see gas prices staying as low as they have been.”
The forecast appeared to have coal pulling even with Natural Gas by next year or possibly slightly outperforming gas in the domestic energy makeup.
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