Will Low NG Prices Force Anthracite Prices to Begin Falling?

What is the situation like with respect to the availability of NG in the heartland of anthracite mining country?

Increased fuel switching by major users, increased co-firing of NG with other fuels for power generation and a SHARP ramp up in east coast exports to europe will quickly bring the price of NG backup to historic highs (within 8 years). Enjoy this cheap NG while you can, it won't last.

prices falling I just opened a notice from blaschak there is a 10.00 per ton increase 11- 7 -11 doesen't that just bite the flippen bag

lsayre wrote:What is the situation like with respect to the availability of NG in the heartland of anthracite mining country?

Within the Wyoming Valley it's very accessible, this area had some of the earliest infrastructure like gas and electric in the US. Scranton's nickname is the "Electric City".

I started in the electricity generation industry about ten years ago. I worked at a coal plant in western PA that was one on the cheapest generators and thus ran all the time. Government regulation has all but closed that place. It's borderline on profitability. In fact, it's life is limited to maybe a couple more years.

I now work in a newer nat gas plant also in PA. This plant was built with the latest in emission controls. When it went commercial bit coal was around $30/ton and this gas plant was nearly closed and mothballed even before it got started. Now the tables have turned and the gas plant thrives on the cheaper gas.

Here's my point.

Don't look any further than your government to find the main reasons for the cost of energy. Bit coal sky rockets due to increased regulation (that buys votes) as well as sweetened international trade deals (many polititiojs are luckily heavily invested just before the deals are inked). China is willing to pay $100 + per ton at the dock for the same coal under contract for $35/ton.

Gasoline - how many of you know what regional blends are? You don't just truck fuel from New England down into the Mid-Atlantic to balance local markets. Govt regulation stops that. "people will die if you truck gasoline drom region to region" How about taxes? Anyone know how much tax is paid in your state to the govt coffers? How are the roads in PA? All that gas tax is supposed to go toward road repair right?

Anth coal... Any one in the business that can shed some light on the cost of coal? Who's making the money? What are profit margins? What percentage of he $160/ton is directly attributed to govt regulation. MSHA? OSHA? DEP? EPA? How many mine owners are living on a yacht in the mediteranian? How many mine owners are in the 1% we've been hearing about lately?

Nat Gas: the last couple of winters, gas companies have burned off millions of MCF of gas because there was nowhere to put it. The underground salt caverns were full of gas and usage was less than production. How many politicians are heavily invested in PA gas fields? Our former governor bought tens of thousands of acres of worthless land just before the gas drilling broke wide open. Hmmmmmmm...... So now, the rigs are running wide open twenty-four-seven and the investors (many politicians) are moving their stacks of $100 bills with wheel barrows and fork lifts. Soon, votes will be worth more then the gas income (besides, the money will already have been made) and government regulation will come in once again and drive the price up. As well, politicians are looking for ways to ship nat gas overseas. Just look where they are investing right now and guaranteed that sector will bust wide open with limitless profits near into the future.

This stuff moves around because big money isn't made from stability.

Tom

It's sad to hear that our elected government officials are merely in the energy game to get rich and buy votes. Thanks for posting that!

What we can count on is higher taxes on NG by the nobama team. Gas is taxed $.184/ gallon in the USA. States vary with CT in the lead around $.49/gallon.
You can look up your state here

http://www.commonsensejunction.com/notes/gas-tax-rate.html

The natural or manufactured gas rate is the same as the public utility tax rate for some states and some states rate is currently .03852. The city rates vary depending on the location.

I guess I should be happy that NY isn't on top, which is what I thought it would be. NOT--good post my friend---depressing,but good

So, can natural gas be bottled and delivered to my house the way propane is now delivered? And would it be significantly cheaper than propane?

The gas would be CNG, compressed natural gas. It is stored at 3000-4000 PSI. Many cities have equipment to pressurize vehicle tanks for local use (NYC has about 25% of it's garbage fleet converted to CNG).

rberq wrote:So, can natural gas be bottled and delivered to my house the way propane is now delivered? And would it be significantly cheaper than propane?

NO, Not in this lifetime.
If you were the country of China, then the answer would be yes.

The infrastructure to compress and load NG into ocean going tankers that will leave from our U.S. Ports is being built as I type this.

Remember...every commodity, is to a large extent, part of the "Global Economy" Just because we have an abundance of something on our continent does not mean it will relatively inexpensive for us...it's more about the "Global Market" that dictates pricing.

OldAA130 wrote:I started in the electricity generation industry about ten years ago. I worked at a coal plant in western PA that was one on the cheapest generators and thus ran all the time. Government regulation has all but closed that place. It's borderline on profitability. In fact, it's life is limited to maybe a couple more years.

I now work in a newer nat gas plant also in PA. This plant was built with the latest in emission controls. When it went commercial bit coal was around $30/ton and this gas plant was nearly closed and mothballed even before it got started. Now the tables have turned and the gas plant thrives on the cheaper gas.

Here's my point.

Don't look any further than your government to find the main reasons for the cost of energy. Bit coal sky rockets due to increased regulation (that buys votes) as well as sweetened international trade deals (many polititiojs are luckily heavily invested just before the deals are inked). China is willing to pay $100 + per ton at the dock for the same coal under contract for $35/ton.

Gasoline - how many of you know what regional blends are? You don't just truck fuel from New England down into the Mid-Atlantic to balance local markets. Govt regulation stops that. "people will die if you truck gasoline drom region to region" How about taxes? Anyone know how much tax is paid in your state to the govt coffers? How are the roads in PA? All that gas tax is supposed to go toward road repair right?

Anth coal... Any one in the business that can shed some light on the cost of coal? Who's making the money? What are profit margins? What percentage of he $160/ton is directly attributed to govt regulation. MSHA? OSHA? DEP? EPA? How many mine owners are living on a yacht in the mediteranian? How many mine owners are in the 1% we've been hearing about lately?

Nat Gas: the last couple of winters, gas companies have burned off millions of MCF of gas because there was nowhere to put it. The underground salt caverns were full of gas and usage was less than production. How many politicians are heavily invested in PA gas fields? Our former governor bought tens of thousands of acres of worthless land just before the gas drilling broke wide open. Hmmmmmmm...... So now, the rigs are running wide open twenty-four-seven and the investors (many politicians) are moving their stacks of $100 bills with wheel barrows and fork lifts. Soon, votes will be worth more then the gas income (besides, the money will already have been made) and government regulation will come in once again and drive the price up. As well, politicians are looking for ways to ship nat gas overseas. Just look where they are investing right now and guaranteed that sector will bust wide open with limitless profits near into the future.

This stuff moves around because big money isn't made from stability.

Tom

I think it safe to say at least 50% of the cost is directly attributed to govt regulations. As is the price of any good in any business. Most people in the anthracite business are just happy to get a paycheck at the end of the week. Very few people are mining the coal due to these Regulations and that number is dwindling fast!!!! Be prepared for a shortage. It's already starting.

I read my earlier post and want to clarify something. I didn't mean to imply that mine owners are getting rich. I meant to suggest that they are not getting rich at $160/ton like other tycoons are. (don't know how to do a link on a phone so plug the web address into your browser if this doesn't work)
http://www.dailymail.co.uk/news/article-2043282/N ... olar-plant.

In the Harmony office, there are photos of miners with their black and dirty faces. I appreciate these men and women and their hard work. My home is warm right now because of them. I appreciate the mine owner for taking the risk and providing me inexpensive fuel.

The price of natural gas will not be low forever.

Tom

I was just emphasizing what you stated in your post about anthracite coal. You hit the nail on the head. I agree with what you are saying. The anthracite industry is FREAKIN' hard work with little payback. Thanks for recognizing that.

McGiever wrote:...every commodity, is to a large extent, part of the "Global Economy" Just because we have an abundance of something on our continent does not mean it will relatively inexpensive for us...it's more about the "Global Market" that dictates pricing.

Good point. Which is why those who condone destroying Alaska or our coastal fisheries resources, for a few extra barrels of oil, would benefit mainly the owners and producers of the oil and not the American public.