Is old king coal really dying?

My grandfather was an immigrant coal miner in central Pennsylvania.

I used to regularly visit the coal town where my mom and her family grew up. I heard stories about how, when people died in a cave-in or explosion, the bodies were hauled out, put on a cart and pulled through town. They were dropped off on the front porches of where the dead miners’ families lived.

The houses were mostly owned by the coal company. The funeral home was owned by the coal company.

I watched miners swap stories in the bar that my grandfather bought after inventing a warning system for miners that the coal company bought. They would talk about who was dying or had just died of black lung. And when the coal dried up, and they had stripped away the mountains and hills, the coal company walked away.

It became a ghost town… not because people left, but because of the survivors who did not. They were the true walking dead.

And this kind of pattern continues to be repeated by these companies in small towns across Appalachia. Very little has changed.

Today – now that a New Energy Age has begun with the bankruptcy of Peabody Coal, the largest coal company in the U.S. – it looks even worse for the “dirty” fuel sector in general.

No one is going to cry over the fate of Big Coal because Big Coal has government on its side. They get protection. They file Chapter 11 and reorganize.

The coal workers don’t get reorganized. They get fired and their small mining towns become the home of the zombie miners and their families.

There are two things that have contributed to this new predicament Big Coal is in.

The first is the massive amount of oil and natural gas reserves that we can now access with new drilling technology, fracking, or hydraulic fracturing of the rock that had previously trapped the fuel sources. Now that we can get at this oil and natural gas, it has been a game-changer for the energy industry.

On the oil side, fracking has scared Saudi Arabia so much that the country kept its gusher going in order to slash the price of oil with high supply and drive the new U.S. shale industry out of business.

On the natural gas side, it means that companies that were coal-dependent, like the utility industry, are converting to cheap natural gas. It’s a double-win for the utilities because it means 1) they get cheap fuel and 2) since natural gas burns cleaner than coal, it keeps profits in the business and not dealing with federal agencies, regulations and cleanup.

Worse, because Big Coal has been protected for so long, it has been slow to adapt to the new economy. It has been reliant on local, state and national politicians to let it do what it does for so long. Big Coal has so far been incapable of competing with newer energy resources. And once China and Asia’s economies slowed down, all the export growth that U.S. coal companies were enjoying dried up.

There are new, cleaner ways of delivering coal power coming online to replace what we have now, but it will be a while. So we have plenty of supply and little demand.

In all likelihood, other coal companies will follow Peabody’s lead and look to reorganize. But they’re kicking the can down the road. The reality is, this business can’t be put back together again soon, until these new technologies become widespread. China is adopting them right now, and soon, I have a report coming out that will show you how to invest in these technologies.

Until then, large utilities like Dominion, Duke Energy and Southern will come in and buy up coal assets. They still use coal to power some of their power stations that can’t be converted to natural gas. Basically they’re already buying from the coal producers and this would allow them to lower their price and have better control of the commodity prices.

Quality utilities are also solid investments in slow growth economies, like the one we’re in now. And they’re a lot more proactive than the coal industry has been.

— GS Early

The post Is old king coal really dying? appeared first on Personal Liberty®.

from PropagandaGuard https://propagandaguard.wordpress.com/2016/04/25/is-old-king-coal-really-dying/

from WordPress https://toddmsiebert.wordpress.com/2016/04/24/is-old-king-coal-really-dying/