Global coal prices could soon fall off a cliff after their recent rebounding, an energy analyst told The Daily Caller News Foundation.
“Coal prices might go up a little bit, but then they’ll drop,” Tom Sanzillo, director of finance for the Institute for Energy Economics and Financial Analysis (IEEFA), told TheDCNF. “The Chinese run a very different operation… They don’t need much more of the type of electricity coal power provides.”
“Coal peaked in 2013 in China,” he added. “The country is looking to do less coal and produce less coal. This drives the global price of coal down.”
Global coal prices more than doubled over the last year, which has caused a small renaissance in the U.S. mining industry, despite the efforts of President Barack Obama to stifle it. The price of coal in Australia and China has soared by 150 percent since this time last year, according to a graph compiled by Bloomberg.
These massive price fluctuations are due to regulatory changes in the Chinese steel industry as well as increased demand in India, which caused coal prices to rise by 20 percent in a single week in September. Rapidly rising coal prices have prompted companies to invest $90 million into a pair of new coal mines in West Virginia and Virginia. These mines will create about 400 jobs in counties where unemployment is almost three times the national average.
“In the last year, coal prices went down and stayed down,” Sanzillo said. “Then the Chinese government issued an order to reduce the amount of coal being used. The price went up and now you’ve got a declining supply and a declining, but strong demand. China runs the world coal market and wants lower prices. Everybody else but India is a comparativly small piece of the gobal market.”
America has 400 fewer coal mines than it did when Obama was elected in 2008, demonstrating the president has followed through on his pledge to “bankrupt” the coal industry.
A 2015 study found the coal industry lost 50,000 jobs from 2008 to 2012 during Obama’s first term. During Obama’s second term, the industry employment in coal mining has fallen by another 33,300 jobs — 10,900 of which occurred in the last year alone, according to federal data.
Currently, coal mining employs 69,460 Americans, according to the Bureau of Labor Statistics. Much of the blame for job loss is targeted at federal regulations aimed at preventing global warming, which bankrupted coal power plants.
Last year, coal and natural gas power both provided about 33 percent of all power generated in the U.S., and nuclear power generated another 20 percent, according to data from Energy Information Adminstration (EIA). The same year, wind and solar power only accounted for 4.7 and 0.6 percent of all electricity generated in America respectively.
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