News
5:11 pm
Thu August 29, 2013

Coal export terminals will not save U.S. coal producers, experts say


While coal producers look to international markets to make up for a soft coal market at home, experts advise that Asian coal demand will not be as strong as had been expected.

During a recent teleconference, researchers and environmentalists discussed the financial viability of building coal export terminals in the Northwest US to ship Powder River basin coal to Asia. Ross Macfarlane works for Climate Solutions, a clean-energy advocacy group. He said domestic producers didn’t account for the evolution of the coal market abroad.  

“There’s no question that U.S. companies need Asian markets for Powder River Basin coal. The key question is do those Asian markets need U.S. coal?” Macfarlane said.  

Clark Williams-Derry of the think-tank, Sightline Institute, said that when China entered the coal import market, coal producers saw the increased Asian demand as an opportunity. But since then prices have begun to fall, China upped its own coal production, it began importing coal from closer producers in the Pacific Rim, and China also increased its use of renewables.

“The Northwest coal export projects were all being cooked up and hatched during the go-go years, when prices were skyrocketing – that was sort of in 2009-2010. But they were actually launched after prices had already peaked,” said Williams-Derry.

Originally, there were six coal export terminals proposed in the Northwest. That number is down to three. He added that a recent report from Goldman Sachs said that the ports need to come online in the next couple of years in order to claim a spot in the international coal market, but it will much longer than that before the first of the Northwest ports can start shipping coal.