Shale Gas and Coal

Once upon a time a person could enter any of fifty hotels in Pithole, Pennsylvania and pay for a shot of

whiskey with a gold coin. Today, Pithole is an empty field in Venango county indicating little of its importance as the epicenter of the world's first oil boom. The oil boom in Pithole had little effect on the state's coal industry which had operated for nearly forty years and was quite stable.

Today's Pithole 2.0, known as the Marcellus shale gas play, seems poised to strike the death knell for Pennsylvania coal with the endlessly abundant supply of this fracked methane supply.

NPR Link:  http://goo.gl/MzwI17

Power developers have rushed into the region to build gas-fired combined cycle plants as replacements for an aging fleet of coal-fired utilities across the state. The claims being made for these projects are almost as epic as the Pithole story must have been in 1860.

We are told that shale gas-fired plants offer a more environmentally friendly; less carbon-laden and more reliable approach to electrical production. But is that really true?

Natural gas burns cleaner, they say. Gas is a natural partner to the renewable energy sector, they say. What they don't say is that the full lifecycle of shale gas production from spudding-in to production brings a myriad of serious environmental and carbon impacts that rarely get mentioned- fugitive methane emissions, to name but one. And, let's not forget that gas plants have no means for onsite fuel storage like coal or nuclear facilities. If the fuel doesn't arrive for any reason, the plant doesn't operate and that should dispel the myth of reliability.

Seeking to displace the availability and reliability of coal as a foundation fuel for Pennsylvania and the PJM with a fuel source which could turn out to be another Pithole is just not wise.

Let's not buy a shot of whiskey with that gold coin just yet.

Coal Under Siege

 

Under Siege....

Each day seems to bring a new setback for the coal industry.

Financial institutions announce their intentions tocease investing in, or financing coal related projects. Mining companies announce cutbacks in productionor, worse still, layoffs and terminations of their labor force. Global economic indicators point to yet another quarter of decreased industrial production and yet another coal-fired power plant is scheduled for decommissioning.

Advances in clean coal technology, carbon capture and storage and full lifecycle fuel management are made moot by a mob-like mentality that blames coal for every ill that ails us. Few seem willing to support a planned and graceful transition of coal in the energy mix over the next sixty or so years.

The giddiness surrounding our newfound shale gas resources is premature. Production curves from early Marcellus wells have already been scaled back and this should temper our rush to gas-fired power plants. And besides, natural gas is still fossil fuel no matter how many public relations companies are assigned to say otherwise.

We need a strategy and a plan to survive what has become a siege. The barbarians are at the gate.



#coal   #shalegas   #marcellus   #layoffs   #mine  #mining   #naturalgas

Is Bituminous Coal the New Anthracite?

This is not the first downturn in coal, nor the last.

In previous downturns we accepted that business would return to earlier levels at some time in the future. We think of this current downturn as being more transformative than any before but, is that really true?

The coal industry has experienced a transformative decline in its past and we may be able to learn from that experience.

Anthracite coal mining was the first truly commercial, large scale mining endeavor in the United States. The coal was difficult to burn and difficult to mine but the industry created and advanced both end user marketing and mining engineering to grow its annual production from a few hundred tons in 1823 to its peak production of 99 million tons in 1919.

When World War I ended in 1919, anthracite coal faced market pressures from many different areas: fuel oil replacement in home heating and loss of industrial and power generation markets to a rapidly mechanizing, and cheaper, bituminous coal industry. Except for temporary upturns in production during World War II, the decline of the anthracite industry was a constant.

Just as bituminous coal faces a permanent loss of power generation markets due to environmental regulation and legislation, anthracite faced its own permanent loss of markets from sweeping technology shifts, the greatest being the wide area distribution of electrical power for which anthracite coal was not competitive. It is not without irony that bituminous coal is losing the very market space which had been originally taken from anthracite.

If history can inform us of the future, then perhaps reading about the decline of the anthracite industry will help us formulate plans for addressing our own long-tail production decline.


The Face of Decline: The Pennsylvania Anthracite Region in the Twentieth Century: Dublin and Licht.

Amazon link: http://goo.gl/aLRF2J

A New Process for an Old Process

This is always a process- beginning a new social media presence for a company. The old days were fax machines and telephone calling cards but today we are communicating across our mobile devices at such rapid rates that it boggles the imagination.

For many years, coal's place in the order of things was assured and predictable, even against market turns and twists. Now the industry seems embattled along nearly every front and there seems no end in sight.

We have weathered economic downturns before, but the current unpredictability will likely render us a very different industry when the downturn ends.

It is clear that larger mines, especially longwall and superwall mines will rule the future with the smaller operators simply not being able to compete against the technical economies of scale available to the top tier of operations.

We will survive this and we will exit this gauntlet a stronger and even more viable industry. Change is good and our industry is fully prepared to meet that challenge.