Monday, June 8, 2009

Only 6% Of Coal In The Biggest Beds Can Be Pulled Profitably

Only 6% Of Coal In The Biggest Beds Can Be Pulled Profitably
Jay Yarow|Jun. 8, 2009, 9:22 AM|comment3

There's a vast supply of coal in the United States, but only a sliver can be pulled from the ground profitably. Just 6% of the coal that exists in the primary coal beds in the U.S. can be extracted at prices even higher than today's, the Wall Street Journal reports.

What's it mean? For the nation at large, not too much. Individual power companies could be stung, though.

As it stands now, the EIA says that the U.S. has enough coal to power the country for 240 years. David Rutledge, a professor at the California Institute of Technology, who studies coal says it might only last 120 years. Projecting anything 100 years into the future is pretty silly.

In 120 years the mix of energy in this nation will be considerably different. So, unlike oil, there isn't a pressing need to change course quickly. The current plan to diversify through wind, solar and nuclear, should work well in the next 100 years.

As for the power industry:

In the field, challenges are becoming more apparent. Mining companies report they have to dig deeper and move more earth to extract coal from aging mines, driving up costs. Utilities have grown skittish about whether suppliers can ship promised coal on time. American Electric Power Co., the nation's biggest coal buyer, says it has stepped up its due diligence to make sure its suppliers can make deliveries after some firms missed shipments last fall. It even bought a mine to lock down supplies.

"We are very much concerned, and it's getting worse," said Tim Light, senior vice president for AEP.

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