Here is update about Coal Stockpiles at 5 yr lows & below article on expectations of 1/3 coal fired power plants being shutdown to avoid expensive regulated emissions investments:
Various studies are predicting that the utilities will shut down 20-30,000 MW of coal power plants over next 4-5 years instead of spending the money to make these plants comply with new EPA rules. I would think that this would actually increase petcoke consumption – the plants that will get shut down because they don’t have scrubbers would not have been consuming petcoke anyway, so as electricity prices rise because generating supply is tight, the better equipped coal plants will operate more.
Washington Post article on the subject: http://www.washingtonpost.com/blogs/ezra-klein/post/getting-ready-for-a-wave-of-coal-plant-shutdowns/2011/08/19/gIQAzkZ0PJ_blog.html
Both these items will make Coal (& petcoke) price negotiations 4Q11-2Q12 interesting and would add to powers negotiating position – especially if any power producers had some NG peakers to swap out with coal base units not going with scrubbers. I think utility guys might make switches NG early to send message to 2012 price negotating tables (especially since coal producers are looking for some payback & prices are firming up as EIA article shows).
Back to contact refered point on Coal non-scrubbers S/D – I’m not sure where we are US with +20 new coal scrubbers coming online by 2014-16. And wheter power market still believe that power producers are going to opt for more produced power & throughput instead of decreased cost via using petcoke ……. which is what they did in lasw 20 scrubbers they added over / +20 years ago?
All east coast problems with high diesel/new EPA specs fuel oil/big cold storms and these issues are going put lot opposing forces in hands of very hardheaded/forcefull negotiating postures going into this thing……really glad to be on sidelines this one about solid fuel – coal & petcoke supply to domestic power US!
Early signs for cold winter in US (remember annual temps dont vary much and we got 60+ days of 100f+ temps across several states to average down) and ski areas have shortest non snow season on record (few open ski in July & first heavy snow came in Mid October!)
Also lot refineries are down turnaround or just down rates (@ below 83% utilizations) which has already tightened up Diesel prices (along with East Coast weather blow) and combination of Rail moves and Obama support Keystone (offset by all environmental staged picketing) seems be working on WTI vs Brent differential that alll 3Q earnings reports are bragging about & few midcontinent refinery acquisitions were driven by. And although lot of new Refinery & Coker capacity is coming alive 3Q11-2Q12 – the downtime bringing it on will offset new capaicty levels until get full year run time in 2013…….going be lot hits coming by then on all fronts.