CoalWire 40, 5th June 2014

June 5, 2014

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features

Obama’s new climate rule is bad news for coal

The US Environmental Protection Agency’s (EPA) proposed rule limiting carbon dioxide emissions from existing coal power stations could result in the closure of between 30 and 49 gigawatts (GW) of capacity by 2020. However, substantial coal plant closures have already been foreshadowed under current policies. The EPA also estimates that coal demand for the power sector will fall by just under one-third by 2030 and mine mouth coal prices could fall by up to 18% by 2030. “In short, the plan promises to be bad for coal and good for gas and renewables … The text of the regulations runs to 645 pages, and it isn’t exactly a page-turner … So here we answer the nine most important questions about the proposal for you,” writes Ben Adler in Grist.

Putin and the Federal Coal Lease in Montana

Will Russian President Vladimir Putin get richer thanks to a sweetheart government coal deal in Montana? Last month the Treasury Department informed Congress that Mr. Putin personally held an interest in an international oil and gas investment fund called the Gunvor Group, run out of Geneva, Switzerland. Team Putin adamantly denied his involvement, but the Treasury Department insisted it was right,” writes Tom Sanzillo, the Director of Finance, Institute for Energy Economics and Financial Analysis in Huffington Post.

campaigns

Protests escalate against new Australian mine

Protest action against Whitehaven Coal’s proposed Maules Creek mine has intensified as machinery extends the clearing of an environmentally important area of forest for the proposed coal pit. Over 150 people have been arrested at the proposed mine site over the past four months. The influential conservative radio talk show host, Alan Jones, told listeners that the “Maules Creek mine was always a scandal.” Two weeks ago the New South Wales Department of Planning and Environment changed its management plan for the forest to allow wintertime clearing, a restriction initially imposed to protect hibernating species. The project is the only major new coal mine in Australia in the early stages of construction. (Sydney Morning Herald)

top news

African Development Bank refuses to quit coal funding:  The African Development Bank (AfDB) has signalled that it will not follow other multilateral banks policies in restricting funding for new coal projects. “At least in the short term the countries want the ability to use their natural resources. They insist on that. They have the right,” said Kurt Lonsway from the AfDB. The US-based Natural Resources Defense Council estimates AfDB spent US$2.84 billion on coal projects between 2007 and 2013.(Responding to Climate Change)


Coal executives sent letter warning over personal liability: Greenpeace, the World Wildlife Fund and the Center for International Environmental Law have written to the executives of major insurance companies asking whether the executives of fossil fuel companies would bear personal liability if they were sued for funding opposition to climate protection policies. The letter was also sent to executives of major coal companies including BHP Billiton, Peabody Energy and Murray Energy. (Center for International Environmental Law)


Coal company admits spying on Australian activists: Idemitsu Australia Resources has admitted it hired a security company which sent staff using false identities to spy on anti-coal activists opposing its Boggabri coal mine in New South Wales. Information from the covert spying operation was also reportedly passed on to staff of Whitehaven Coal which continues to be dogged by protests against the construction of the nearby Maules Creek mine. (Sydney Morning Herald, Sydney Morning Herald)

World Bank’s President Kim states support for Kosovo project: The President of the World Bank, Jim Yong Kim, has stated his support for a proposed 600 megawatt (MW) lignite-fired plant in Kosovo. “We’re going to at least make this coal-power plant the cleanest it could possibly be,” he said. Bruce Buckheit, who worked as a consultant on Kosovo for the Sierra Club on the proposed project, insists “there are better, cheaper, smarter options, which also happen to be lower emitting.” (Bloomberg)


German state approves coal project: The centre-left Brandenburg state government has approved Vattenfall’s proposal to mine an additional 200 million tonnes of lignite after 2026. The proposed expansion of the Welzow-South mine would require the demolition of Proschim village and the relocation of approximately 800 people. The state’s Premier, Dietmar Woidke, defended the decision arguing that brown coal “is indispensable as a bridge into the era of renewable energy.” (Deutsche Welle, Reuters)


Australian mine fire inquiry told of smoke health hazard: The inquiry into the 45-day long fire at the Hazelwood brown coal mine has been told that the Environmental Protection Agency took three days to set up air pollution monitoring equipment and a further two days before it received any data. An advisor to the EPA told the inquiry that PM2.5 air pollution levels of 25 micrograms per cubic metre was exceeded on 21 days in the town adjoining the mine and at its worst may have reached 700 micrograms per cubic metre. Despite the extreme air pollution, the town was not evacuated. (The Age, ABC,ABC)

“It’s particularly important that we do not demonise the coal industry and if there was one fundamental problem, above all else, with the carbon tax was that it said to our people, it said to the wider world, that a commodity which in many years is our biggest single export, somehow should be left in the ground and not sold. Well really and truly, I can think of few things more damaging to our future,”

said Australian Prime Minister Tony Abbott in a speech to the annual conference of the Minerals Council of Australia.

news

Australia: MP refers complaints over proposed QCoal mine to Crime and Misconduct Commission.


Cambodia: Marubeni buys a 20% stake in coal-based generation and distribution company.

Mozambique: Train derailment injures drivers and leads to loss of 1638 tonnes of coal.


UK: World Coal Association appoints Chief Executive of Rio Tinto Energy as its new Chairman.

“The current outlook for the global coal market remains depressed and without clear signs for improvement. We anticipate that weak coal prices will persist for a considerable time,”

said Mr Cunliang Lai, the Co-Chairman of Yancoal, a major Australian coal company which is majority owned by the Chinese company Yanzhou Coal.

companies + markets

China emissions cap proposal flagged for 2016: A Chinese government official has stated that an absolute cap on greenhouse gas emissions could be incorporated into the next five-year plan which will come into effect in 2016. While not yet official, the government adviser, He Jiankun, suggested a cap could be set at approximately 11 billion tonnes of CO2-equivalent by 2030. Current emissions are estimated to be in the range of 7 – 9.5 billion tonnes of CO2-equivalent. Such a standard would have a major impact on coal generation targets. (South China Morning Post)


Tanzanian coal project stalled over costs dispute: The proposed 600 MW Ngaka power station has stalled over a dispute between the publicly-owned Tanzania Electric Supply Company (TANESCO) and the mine-mouth power generator, TanCoal Energy. TanCoal,  majority-owned by a subsidiary of the Australian-headquartered Intra Energy Corporation, is arguing for a power purchase agreement based on 12 US cents per kilowatt hour while TANESCO is offering only five to six US cents. (AllAfrica.com, Intra Energy Corporation)


Investment in US coal falls: Publicly-listed US coal companies are expected to cut capital expenditure on mines in 2014 by 16 per cent compared to 2013. SNL Energy estimates that in the first quarter of 2014, publicly-traded coal companies spent US$655.1 million, a 59% fall from the recent high of US $1.6 billion in the fourth quarter of 2011. (SNL)

Indonesia plans new coal terminals: A government official has proposed the construction of 14 new coal export terminals in a bid to curb illegal coal exports from the islands of Kalimantan and SumatraThe Minerals and Coal Director of Indonesia’s Ministry of Energy, R. Sukhyar, told an industry conference that it was estimated that between 50 and 60 million tonnes – or up to 14 per cent – of coal is exported illegally from Indonesia. (Platts)


South Korea imposes tax on thermal coal imports: The South Korean government will impose an import tax of US two cents per kilogram of thermal coal from July 1. The measure is aimed at discouraging peak summer and winter loads by increasing electricity prices. In 2015 South Korea will commence a carbon trading scheme. In 2013 South Korea imported 96 million tonnes of thermal. Tim Buckley from the Institute for Energy Economics and Financial Analysis argues the tax is bad news for coal exporters.(Reuters, IEEFA)

“The countries most affected by energy poverty also happen to be the most vulnerable to the expected impact of climate change on crop yields, food security and poverty. Rather than enjoying a broad-based increase in coal-fired generation, we believe that future demand growth will be increasingly concentrated in just a handful of countries: India, Korea, Taiwan, and Japan,”

write Goldman Sachs analysts on the prospects for the thermal coal market.

resources                      take action

US President Barack Obama, “Reducing Carbon Pollution in Our Power Plants”, May 31, 2014 and Clean Power Plan, US EPA, June 2, 2014. This is a transcript of President Barack Obama’s address from the day before the release of the United States Environmental Protection Agency’s (US EPA) Clean Power Plan. The EPA’s 645-page proposed rule is here, links to fact sheets here and detailed technical documents here.


The Thermal coal paradox, Goldman Sachs, May 23, 2014. (Pdf)

This report argues that the time for profitable investment in new mines requiring new infrastructure has passed and that coal-fired power will at best play a minor role in addressing energy poverty. This is well worth reading.


World Energy Investment Outlook, International Energy Agency, June 3, 2014. (Pdf)

This is the IEA’s latest review of possible trends for investment in traditional energy sources and energy efficiency and renewables under its two central scenarios. A series of fact sheets and key supporting documents are here while the Excel spreadsheets with key costs data for power generation and energy efficiency are respectively here and here.


The great coal cap: China’s energy policies and the financial implications for thermal coal, Carbon Tracker Initiative and Association for Sustainable and Responsible Investment in Asia, June 5, 2014. (Pdf)

This report argues that likely peak in Chinese thermal coal consumption forecast in the short to medium term up to 40% of China’s coal-fired power generation capacity is potentially at risk of becoming stranded by 2020.

Save the rhinos from a coal mine

An open cut coal mine has been proposed next to the Hluhluwe-iMfolozi park in South Africa, the world’s greatest rhino sanctuary. Opponents of the project have launched a petition urging South Africa’s new Minister of Mineral Resources, Ngoako Ramathlodi, to reject the project. Sign the petition here.