The next serious crisis for Americans could be a lack of coal to run the power plants that light up computer screens, heat microwave dinners and turn on the big-screen televisions, according to experts on the issue.
The situation is that hundreds of millions of people in nations like China are moving rapidly from the Stone Age to the 21st century as American dollars have flooded that part of the world, and officials have been struggling frantically to make enough power to run all of the gadgets the new lifestyle includes.
Similar circumstances also are developing in India and places like Indonesia, and the demand is sending the expense of coal through the ceiling, making relatively insignificant President Obama’s promise during his 2008 election campaign that he wanted to regulate those who build coal mines and coal-fired power plants until they were bankrupt.
Demand has surged to such levels that in some places, workers have been giving up their regular jobs to go and hand-dig coal from the ground and haul it to market in old bathtubs.
The experts suggest that Americans even could see power shortages because of the demand, and resulting price, of coal.
Bill Heid, chief of Solutions from Science, which provides answers for consumers concerned about the reliability and availability of energy, says some power producers, in fact, are being forced to pay prices for coal that are forcing them into a loss.
The China Coal Resource website confirms that prices of coal delivered to power plants have risen for 50 straight days, and as of last week rose nearly 3 percent in just seven days.
The impact on America is that there now are long lists of coal-fired plants needing fuel that didn’t exist just months or years ago, and the worldwide competition for the fuel is intensifying.
The Denver Post, which is not far from Wyoming’s Powder River Basin – one of America’s most significant sources of coal, reported just last month that prices have “doubled in 13 months.”
“Demand for coal abroad is rising, and production is falling in some U.S. coal basins. For Colorado, where almost 60 percent of the electricity is generated by burning coal, this isn’t good news,” the report said.
Heid suggested that multiplying that warning by 50 times, once for each state, probably would be appropriate.
“Here’s where it ends,” he told WND. “Power producers are in trouble to the point they’re buying coal and losing money at today’s coal prices.”
China, he said, is adding one new coal-fired power plant each week.
“All of this is creating heavy demand on coal.”
He cited another report, from Stansberry & Associates, which said the real problem is “China.”
“Trade and capitol flows are transferring most of the inflation the Fed is creating to the Chinese economy. U.S. politicians continue to stimulate consumption in the U.S., while most of the production to meet this demand comes from China. We borrow and spend. They produce and profit. Hopefully, you understand simply printing more money and buying government bonds won’t change this dynamic – it simply results in still more money being sent to China,” the report said.
Obama’s plan was for a cap-and-trade tax program that would set regulations and fees on energy production so high coal production and use wouldn’t be economically feasible. While that plan largely has dropped from Washington’s radar at this point, especially since the GOP takeover of the House in this month’s election, it appears the prices are skyrocketing even without Obama’s influence.
Obama said, “So if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.”
The Stansbery report continued, “What will China do with the flood of capital? Lots of things. But one thing it will certainly do is build more coal-fired power plants. Coal-fired plants produce 80 percent of the electricity in China and demand for electricity is growing roughly 99 percent a year. It’s hard to comprehend how fast demand for coal is growing in China…”
The report noted China today consumes three times the coal of the U.S., but has only half of the U.S. coal reserves.
“At current growth rates, China would exhaust its current reserves in only 16 years. Obviously that’s not going to happen – more mines will be dug. But just as obviously, it will take a long time to build the mines … In the meantime, China will need a lot of coal,” the report said.
That, analysts said, will force U.S. coal prices to rocket, and leave U.S. power generators, perhaps, without the supplies they need.
The Stansberry report also noted. “Don’t forget about India. Its installed power base exceeds 600 gigawatts and demand is growing at about the same pace as in China. India also relies on coal for most of its power.”
Stansberry confirmed that between those two countries, there are 600 million people “moving out of the Stone Age and into the modern world – a group 12 times bigger than the baby boomers.
“While it’s true these people will want to buy lots of things – from Cokes to Buicks – the thing they need most is electricity,” the report said. “Whether we realize it or not, we compete with other nations around the world for resources.”
The report continued. “The Chinese are so aware of the need, they are digging mines recklessly enough that lives are lost almost daily…”
Heid noted that the competition-generated price hikes will be hitting Americans at a time when their incomes have been mostly flat.
Worse yet, he warned, China has begun investing in energy resources inside the United States, which eventually could result in domestic consumers in a bidding war with a billion foreigners for the resources in their own back yard.
At Inside Energy, a report suggests that “from 2025 onwards worldwide coal scarcity is threatening.”
The report said only six coal exporting countries supply the current global coal market.
“The past five years, global reserves have been adjusted downwards 14 percent by the world Energy Council,” it said.
The price of the push to develop more coal sources also has included a gas explosion at a Chinese mine that killed 21, as well as another explosion at a New Zealand mine in recent days.
If you would like to sound off on this issue, participate in today’s WND Poll.