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Tue May 28, 2013
Report says coal exports may not be the solution for waning domestic market.
As demand for coal has dropped domestically, producers have turned to exports abroad as a way to make up for market losses at home. 2012 was a record year for coal exports out of the US.
The demand for coal in China and other Asian markets, has raised hopes for coal producers in the Powder River Basin. They’ve helped develop plans for expanded port facilities in the Northwestern US and some coal companies, including Arch Coal, have invested money in the proposed ports.
But a recent report by Goldman Sachs predicts that China’s demand for foreign coal will decline in the coming years. The report says that China is producing more of its own coal and building the necessary infrastructure to transport it. The country is also trying to improve its energy efficiency and to diversify its energy production to include other sources.
Some investors have already pulled their support for the port expansion, due to uncertainty in the market. There’s been steady environmental opposition to the ports in the states that would host them, Washington and Oregon.