It is reported that coal stocks like Alpha Natural, Peabody Energy.
James River Coal, Walter Energy and Arch Coal have been beaten up of
late as Patriot Coal's bankruptcy cast a cloud over the sector. But a
long term trend that reached an historic inflection point recently is
adding to coal's recent stock market woe is for the first time since the
agency was set up decades ago.
According to data from April 2012 that was recently released by the US Energy Information Administration, natural gas fired plants equaled the power output from coal. Monthly coal and natural gas generation both provided about 32% of total generation for the US.
The trend has been encouraged by much lower natural gas prices and more stringent regulations on emissions from coal-fired plants. A chart accompanying the release shows a sharp drop in coal generation starting late last year, just as natural gas took a leap upward.
Analysts at the Energy Information Administration pointed out that the weather played a factor in the trend, since overall power demand was low in April due to a mild spring. At the same time, the price of natural gas to power plants touched a 10 year low.
Since then, natural gas prices have moved up now that a hot summer has kicked in.
The EIA said that "With warmer summer weather and increased electric demand for air conditioning, demand will increase, requiring increased output from both coal and natural gas fired generators."
So while coal will continue to provide power this summer, it may no longer be King Coal for the time being, as energy companies continue to produce ample natural gas in the US and government regulations on air pollution encourage new plants that burn natural gas.
http://www.steelguru.com/raw_material_news/Natural_gas_power_generation_matches_coals_for_first_time/273502.html
According to data from April 2012 that was recently released by the US Energy Information Administration, natural gas fired plants equaled the power output from coal. Monthly coal and natural gas generation both provided about 32% of total generation for the US.
The trend has been encouraged by much lower natural gas prices and more stringent regulations on emissions from coal-fired plants. A chart accompanying the release shows a sharp drop in coal generation starting late last year, just as natural gas took a leap upward.
Analysts at the Energy Information Administration pointed out that the weather played a factor in the trend, since overall power demand was low in April due to a mild spring. At the same time, the price of natural gas to power plants touched a 10 year low.
Since then, natural gas prices have moved up now that a hot summer has kicked in.
The EIA said that "With warmer summer weather and increased electric demand for air conditioning, demand will increase, requiring increased output from both coal and natural gas fired generators."
So while coal will continue to provide power this summer, it may no longer be King Coal for the time being, as energy companies continue to produce ample natural gas in the US and government regulations on air pollution encourage new plants that burn natural gas.
http://www.steelguru.com/raw_material_news/Natural_gas_power_generation_matches_coals_for_first_time/273502.html
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