OLD COAL NEW AGAIN?

A Future With Coal?
Zach Fross, November 22, 2006 (explosivespeculations.com via 321energy.com)

- Over the last five years, coal consumption has been growing with continuing momentum…fueled by the world’s thirst for energy along with increased demand for such things like steel (due to the higher demand for infrastructure). What this means for a long-term investor is that the companies that are dealing with coal probably aren’t going away anytime soon and will continue to grow…
- The Energy Information Administration (EIA) estimates in its World Energy Outlook that 1.6 billion people are still without electricity…these developing countries are expected to increase their share of the world’s energy consumption from about 30% in 2000 to around 43% by 2030…the most feasible option is coal. Not only is there an existing infrastructure in these developing countries, but also the price of coal is stable and coal is relatively abundant…
- Just taking a look at the United States’ coal power situation, much of the country’s electricity is produced from 50-60 year old power plants. These facilities will soon have to be replaced and the country is taking a hard look in coal’s direction…

- Global warming and health concerns are…are causing clean coal technologies to become a realistic opportunity. The National Energy Act of 2005 describes the government giving money and tax breaks…[including] the U.S.’ sponsored project FutureGen, the world’s first facility that will combine Integrated Gasification Combined Cycle (IGCC) electricity production and the capture of CO2 for geological sequestration…
- Let’s not forget about SynFuel and the Fischer-Tropsch process. The U.S. is also awarding $1.3 Billion towards the research and production of alternative fuels; the most promising of which are the synthetic fuels made from coal and natural gas…
- If you are sitting there thinking that the price of oil will keep going down…think again. Global oil demand is still on the rise and production is struggling to keep up. The current decrease in price is simply a price adjustment period that will quickly subside. This along with coal’s long-term stability, continual growth, and speculative aspect, makes investing in coal even more seductive.