The Economist, Natural Gas: Cleaner, Not Cooler
The above article in Friday's Wall Street Journal notes that coal company stocks are down 30% over the last three weeks. As a shareholder in Patriot Coal (PCX) I can attest to that. The article cites higher costs due to declining coal seams in Apalachia, as well as increased competition from an increasingly abundant and inexpensive supply of natural gas. Although coal is still the U.S.'s leading source for electricity generation, it's share has been declining for years, while natural gas' share has been increasing.
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| from the Wall Street Journal |
My main hope for the shares in Patriot Coal is demand from China which is much larger than any other country in the world, and which continues to increase (see my article, Global Coal Consumption and Production, Fun with Charts).
As far as the replacement of coal with natural gas, I think it is a positive development for the country, given that the U.S. has an enormous supply of gas, and it is much cleaner than coal. There are three articles on natural gas in last week's Economist magazine, with one noting that while the burning of natural gas is relatively innocuous for human health, especially as compared to coal, which releases harmful soot into the atmosphere, coal actually contributes slightly less to global warming than natural gas. This is not because coal emits less carbon than natural gas (in fact coal emits almost twice as much CO2 per kilowatt hour as natural gas) but because coal also emits sulphates into the atmosphere, which actually block the sun, and has a cooling effect that partially offsets the warming caused by CO2 emissions.
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