CoalWire 74, 12th February 2015

Posted February 11, 2015 by Bob Burton
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features

Arch Coal, the Second-Biggest US Producer, Is in Trouble

“Arch Coal has posted significant losses for three years running now and as 2015 unfolds it appears its performance will remain in the red. Last week the company announced it had lost US$553 million in 2014, which is an improvement over 2013, when the company lost US$736 million, but not very promising. A deeper look, beyond just the loss column, reveals a company in distress,” writes Tom Sanzillo of the Institute for Energy Economics & Financial Analysis.

Suggested Tweet: Arch #Coal, the second-biggest US producer, is in trouble http://bit.ly/1MdJjt4 @ieefa_institute

Coalition Warns US Ex-Im Bank Against Supporting Adani’s Queensland Projects

“Civil society groups, scientists, political leaders and business owners from across Australia and the United States delivered an open letter to US Export-Import Bank (Ex-Im) Chairman Fred Hochberg calling on the Bank to reject any bid to finance Indian coal conglomerate Adani’s proposed Carmichael Coal Mine, railway, or ports with US taxpayer dollars,” writes Nicole Ghio from the Sierra Club in Huffington Post.

Suggested Tweet: US Ex-Im Bank Warned: Don’t Use US Tax Dollars to Destroy the Great Barrier Reef for #Adani #coal project http://huff.to/1CW24OR @nicoleghio

New arrests should dampen Serbia’s appetite for coal

On January 27, Vladan Milošević, the general director of the public company Resavica which operates nine underground coal mines in Serbia was arrested and charged with corruption. “In a statement, Serbia’s Minister of Internal Affairs said that Milošević was caught with a bribe of 14,000 euros of marked money … The case adds to the impression that the dependence on coal creates a stack of vulnerabilities for Serbia’s energy sector,” writes  Nikola Perusic, the Serbian energy campaigner for the BankWatch network.

Suggested Tweet: Director General of Serbian #coal mining company arrested on #corruption charges http://bit.ly/1DdY3E2 @ceebankwatch @perusicnikola

FutureGen’s demise another blow to CCS

“The demise of FutureGen [Carbon Capture and Storage project in Illinois, US] has followed the same old pattern that has bedevilled numerous other CCS projects. Initial hype and generous public support have been followed by cost overruns, engineering problems, wariness of lenders and public and utility opposition,” writes Bob Burton in RenewEconomy.

Suggested Tweet:  FutureGen’s demise another blow to #CCS http://bit.ly/1Ktxo6N @bobburtonoz #coal

campaigns

Romanian court blocks mine expansion

A Romanian court has cancelled 27 permits allowing the clearing of 22 hectares of forests for the expansion of open-cut mining at the Oltenia Energy Complex in Romania. The case, which was brought by the Bankwatch network, challenged the move by Oltenia Energy Complex to seek permits for numerous areas under one hectare thereby allowing the regional forestry agency to approve forest clearing. Areas over 10 hectares require a decision of the government and an environmental impact statement. Bankwatch Romania has another eight similar legal actions before the courts over forest permits around nine lignite pits. (Bankwatch)

Suggested Tweet: Romanian court overturns #forest clearing permits for #coal mine expansion http://bit.ly/1CceJrx @ceebankwatch

“We believe that thermal coal will not go through another full iteration of the commodity cycle: the high prices to incentivize large-scale investment [in] greenfield mines and infrastructure will not return,”

wrote Goldman Sachs analysts in a January 2015 report titled ‘Thermal coal reaches retirement age’. (Not available online.)

top news

First Nation says discussions with US coal port developer over: The Lummi Nation has rejected a request from SSA Marine, the developer of a proposed coal terminal in Washington state, to enter into further discussions on the project. In response to SSA Marine’s request Lummi Chairman Tim Ballew said the environmental impacts of the project “simply cannot be avoided, minimized, or mitigated.” The Lummi Nation has asked the US Army Corps of Engineers to immediately reject a permit for the proposed coal terminal on the grounds that it would affect the tribe’s fishing rights under a treaty with the US Government. (Bellingham Herald)

Chinese corruption crackdown fingers coal giants: China’s anti-corruption agency has alleged that officials at the government-owned coal mining giant Shenhua accepted bribes in exchange for contracts. The Central Commission for Discipline Inspection also alleged that officials at China Huadian Corporation, one of the largest state-owned power generation companies, had bought and sold party positions and helped relatives illegally profit from state-owned assets. (China.org.cn, Bloomberg)

NSW Greens propose five year phase-out of thermal coal exports: The New South Wales Greens have proposed that thermal coal exports from the state be phased out by 2020, with a transition plan developed for affected employees and small businesses. NSW exports about 160 million tonnes of thermal coal a year. The Greens hold five seats in the state’s upper house with the state election scheduled for March 28. (NSW Greens, Sydney Morning Herald)

Indian private power producers demand import duty exemption: The Association of Power Producers’ (AAP), representing approximately 20 private power generators, are demanding that imported thermal coal be exempted from the Basic Customs Duty and the Countervailing Duty, each of which is levied at 2 per cent of value. The AAP is arguing that the duties push up electricity costs. (Economic Times)

Call for investigation into Adani’s Australian subsidiaries: Corporate records indicate that companies associated with the proposed Galilee Basin coal projects and the Abbot Point coal terminal are owned not by Gautam Adani but his brother Vinod Shantilal Adani, who is being investigated by India’s Directorate of Revenue Intelligence. Adani has denied any wrongdoing. The Australian Greens have called on the federal government to investigate who actually owns the Australian companies. (Sydney Morning Herald, Sydney Morning Herald)

Thai court imposes extra conditions on mine: Thailand’s Supreme Administrative Court has directed that the Electricity Generating Authority of Thailand take additional measures to minimise pollution from its Mae Moh coal mine in Lampang province. However, instead of ruling in favour of residents who sought the cancellation of the operating permit for the mine, the court imposed additional dust control measures and requires EGAT to provide for relocation of the worst-affected residents but does not mandate any compensation be paid. (The Nation, Bangkok Post)

“I can’t see the sense in us putting a huge coal mine [Shenhua’s Watermark project in New South Wales] and destroying that land, or not even destroying it but endangering that land and the aquifers, to dig out coal, the price of which has fallen so much … I have great sympathy with people who don’t want that mine to go ahead,”

said Heather Ridout, a member of the board of the Reserve Bank of Australia and chair of AustralianSuper, a superannuation fund.

news

Australia: 70 per cent of Queenslanders reject US$351 million subsidy for Adani railway line.

Global: Slump in seaborne coal trade hits shipping firms and forces freight rates down.

Europe:  Coal plants account for just 12 per cent of new EU capacity and 3900 megawatts (MW) less than retirements.

Romania: Government resists IMF call for “massive and radical restructuring” of coal industry.

Malaysia: Fund drops $2.2 billion Islamic bond plan for 2000 MW plant.

US: Government demands US$7.8 million of CCS funds back from Two Elk power plant promoter.

companies + markets

Record production drop for Chinese coal miner: Falling coal demand and production cuts has resulted in China Shenhua Energy, a stock exchange-listed subsidiary of  state-owned Shenhua Group, reporting a 12.4 per cent drop in coal production in 2014 to 451 million tonnes. Shenhua Energy said that due to falling power demand and increasing renewable electricity supply its power sales fell 5.l per cent in 2014. (China Shenhua Energy Company, Reuters)

Norwegian wealth fund dumps more coal stocks: In its first report on responsible investing Norway’s Government Pension Fund Global has revealed that it dumped stocks in 14 coal-mining companies and a coal-based utility because of their high carbon emissions. It had also divested from a further 16 coal companies because of links to deforestation in Indonesia and India as well as two US coal companies involved in mountain-top removal. (Guardian)

Dramatic January fall in Chinese coal imports: Preliminary Chinese Government customs import data reveals that coal imports in January were 38 per cent lower than December and 53 per cent lower than January 2014. The drop is consistent with the late 2014 trend of slowing power demand, falling imports and increasing renewable energy production. (China Daily, Reuters)

Coal India to abandon Mozambique project:  Coal India is set to abandon two coal exploration projects in Tete province after discovering that, according to an anonymous company executive, “the substance that was found does not contain enough carbon to even qualify as coal.” Coal India spent approximately US$80 million on the two coal blocks it gained in 2009 in the expectation that the deposits contained at least 20 per cent metallurgical coal. (Economic Times, CoalSwarm)

resources

Sustainable Energy in America Factbook, Bloomberg New Energy Finance, February 2015. (Large pdf)This report contains a wealth of data on sustainable energy in the US and costs compared to fossil fuel power generation.
SaskPower’s Carbon Capture Project: What Risk? What Reward?, Canadian Center for Policy Alternatives, February 2015. (Pdf)This 24-page report takes a detailed look at the costs and risks associated with SaskPower’s Boundary Dam CCS project, which was commissioned in September 2014.