The new president’s inaugural address had the attention of both renewable energy supporters and the coal industry as he addressed topic of climate change. The Obama administration is expected to usher in a new age of greener politics and that has many in the coal industry nervous.
Supply and demand of coal is expected to be a bit more important in 2009, with the almost irrational movement along with crude oil turning out to be less of an influence.
On Tuesday, Indonesia’s parliament passed a much anticipated coal and mining law intended to raise government revenues and provide easier access for foreign investment. However, many feel the regulations outlined in the new law will only deter investment.
Along with most in the commodity sector, the coal industry will likely take a hit in 2009, but many analysts are confident that coal demand along with prices will rebound in 2010. As energy demand from developing countries like China and India recovers, we’ll once again see upward movement in the coal price.
The metallurgical coal industry is set to face significant declines in price, according to analyst’s forecasts. Bloomberg conducted a survey of a nine-analyst panel whose median forecast placed the price of coking coal at $200 a tonne by April 2009. The individual forecasts ranged from $140 to $305 a tonne.
Coal is the best commodity to get into right now. The recent global economic downturn has led to a slump in coal demand and production cuts, however serious investors are not shying away from what they see as a most opportune time.
The International Energy Agency has released its World Energy Outlook report. In reaction to steadily rising demand, the agency is confident that coal will continue its role as the main source of power for much of the world at least until 2030 and will outshine all other energy sources.
Obama stated: "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."
Despite the global financial crisis, several major coal producers reported increased profits this week, including Gloucester Coal, Console Energy, Alliance Resource Partners, Arch Coal, Walter Industries, and Alpha Natural Resources.
As election day nears and the fate of each candidate rests on electorally important states such as Pennsylvania, Colorado, and Ohio—all of which are major coal producers—the campaigns are ramping up their rhetoric by focusing on clean coal energy production.
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