Is King Coal on Life Support? – by Bob Kohut (The Bull.com – May 2, 2016)

http://www.thebull.com.au/

On 27 April a story appearing here on thebull.com reported the sad tale of the “last train to leave Leigh Creek.” The train carried coal from a now-shuttered mine in the town formerly operated by electricity retailer Alinta Energy for the South Australian state government.

At its peak the mine produced about 2.5 million tonnes of coal per year to fire two power generating stations that supplied 40% of South Australia’s electricity. Coal mining at Leigh Creek dates back to 1888.

Since the advent of electricity, coal has been viewed as the “king” of commodities. But even with the most highly valued commodities, technology can issue a death sentence. More than a century ago the world had a seemingly insatiable demand for whale oil to light the night. The onset of kerosene sent whale oil demand plummeting, leaving only its use in soap and vegetable and certain machine oils. The last whaling ship in the once mighty US whaling fleet left the Port of New Bedford Massachusetts in 1921.

The future of coal is a hotly debated topic. There are those who firmly believe thermal coal used to generate electricity will join whale oil as an obsolescent commodity as natural gas and renewable energies become dominant. Like or not, coal is a “dirty” fuel, pouring carbon into the atmosphere.

Metallurgical or coking coal used in the production of steel appears to have a better long term outlook, but even here steel is losing ground to lighter materials in many sectors, most notably automotive and aviation. In addition new technologies such as high-powered electric arc furnaces (EAF) are already used in lieu of coking coal in both the US and Europe.

Others scoff at the notion that King Coal is on its deathbed, believing the abundance of coal and its supposed price advantage over other forms of energy will keep coal afloat for decades to come.

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