Source: US Energy Information Administration 3) The world is expected to burn an additional 1.2 billion tons of coal per year over current levels by 2017, according to the IEA. That’s equal to the combined consumption of two major consumers - Russia and the U.S. - in 2011. 4) Indonesia has become the largest coal exporter in the world, eclipsing long-standing leader Australia as the largest exporter on a tonnage basis. 5) All this is very bad news for projected carbon emissions, which nearly everyone believes contributes to global warming.
For investors, these trends suggest that big listed coal companies may come back into favor. CEOs of U.S.-based coal companies are bullish on the demand for exporting their product, and some - such as Arch Coal CEO John Eaves - believe U.S. natural gas prices will soon rise and make coal look more attractive domestically as well. But the stocks of the major coal players remain depressed, due in large part to the U.S. natural gas glut and global economic slowdown (which lessens energy demand):BTU data by YCharts So things may be looking up for these coal producers in the near to mid-term. But for planet earth, not so much. In her introduction to the report, IEA Executive Director Maria van der Hoeven notes that the report's forecasts are based on a disturbing reality - that carbon capture and sequestration (CCS) will not be available during the bullish outlook period for coal:
CCS technologies are not taking off as once expected, which means CO2 emissions will keep growing substantially. Without progress in CCS, and if other countries cannot replicate the US experience and reduce coal demand, coal faces the risk of a potential climate policy backlash.Translation for those of us not working in the coal industry: Gulp.
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