Eastern Railroad Discussion > TVA may not move away from coal as quickly as expected

The Wall Street Journal has an article today about a surprising turn in the management of the Tennessee Valley Authority. The nation's largest public power provider has been closing coal plants and expanding the use of natural gas in its service area of Alabama, Tennessee and surrounding counties in other states. But now it appears that move may be slowed or reversed, with coal interests in the ascendancy.

Three commissioners who were viewed as favoring the switch toward natural gas have found their renominations for the board on hold. Observers believe their support of closing two coal fired plants angered Senator Jeff Sessions (R-AL), even as both Republican Senators from Tennessee praised the cleaner air in their service area.

Two more commissioners are up for renewal in May, giving the incoming administration an opportunity to appoint five of the nine commissioners.  So coal may have a breather in this struggle.  At one point, Southern Company proposed selling the clean coal experimental plant at Kemper MS to TVA, but the authority resisted that.

TVA burns a mix of local coal, Illinois coal, and Powder River coal in its plants.

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When is Senator Jeff Sessions (R-AL) no longer a Senator ?

A few days from now, assuming he can get approved.

But, the issue of coal jobs in Alabama is a sensitive one. There are a lot of closed mines and two closed electric plants to which (any) senator needs to be aware.

In capitalism this is referred to as "creative destruction"; simply put a new better item replaces the old.  Film cameras replaced by digital cameras.  Film makers lose.  Natural gas is cleaner and cheaper than coal.  If you are going to insist on substituting yesterdays technology for tomorrows you will ultimately lose..  This isn't good news for the mining industry or its workers. but it is the nature of the game.                        

Correct but... there is also no reason to close a coal fired plant that still has a useful life and provides electricity at an equitable rate.  Kind of like trading in the car you have fully paid with 50,000 mile on it for the new model.

YankeeDog Wrote:
-------------------------------------------------------
> In capitalism this is referred to as "creative
> destruction"; simply put a new better item
> replaces the old.  Film cameras replaced by
> digital cameras.  Film makers lose.  Natural gas
> is cleaner and cheaper than coal.  If you are
> going to insist on substituting yesterdays
> technology for tomorrows you will ultimately
> lose..  This isn't good news for the mining
> industry or its workers. but it is the nature of
> the game. 
>                       

Also true.  But coal-fired plants are a diminishing item.  I wonder if any new coal fired plants are planned anywhere un the US,  Here in California we have 1 nuclear plant and no coal fired plants.The local plant was oil fired back in the day but is natural gas fired now and the oil tanks are going to be removed for a development.

Merely being yesterday's technology does not make it bad or useless.  


YankeeDog Wrote:
-------------------------------------------------------
> In capitalism this is referred to as "creative
> destruction"; simply put a new better item
> replaces the old.  Film cameras replaced by
> digital cameras.  Film makers lose.  Natural gas
> is cleaner and cheaper than coal.  If you are
> going to insist on substituting yesterdays
> technology for tomorrows you will ultimately
> lose..  This isn't good news for the mining
> industry or its workers. but it is the nature of
> the game. 
>                       

Rathole Wrote:
-------------------------------------------------------
> Merely being yesterday's technology does not make
> it bad or useless.  
>
>
> YankeeDog Wrote:
> --------------------------------------------------
> -----
> > In capitalism this is referred to as "creative
> > destruction"; simply put a new better item
> > replaces the old.  Film cameras replaced by
> > digital cameras.  Film makers lose.  Natural
> gas
> > is cleaner and cheaper than coal.  If you are
> > going to insist on substituting yesterdays
> > technology for tomorrows you will ultimately
> > lose..  This isn't good news for the mining
> > industry or its workers. but it is the nature
> of
> > the game. 
> >                       

Rathole is correct.  You would think that fans of a 19th Century technology would
appreciate that point.

This is also true but it becomes increasingly non-competitive.  The infrastructure that supports it becomes under utilized.  UP and BNSF spent a wad of money increasing capacity in the Power River fields that are nn where used as much as they were 15 years ago. If the present trends continue once these coal-fired plants reach the end of their economic life they probably will be replaced with gas fired unless there is a unforeseen change.in technology or market forces.

Even with changes in accounting rules somebody is paying more for electricity than they need to.

When AEP made an offer to keep Big Sandy open, businesses and residents of KY said NO

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Closng the plants has nothing to do with Capitalism. The rules making Coal cost prohibitive may be well intended but are wreaking havoc on any market direction. There are still gross polluters across the Globe that are looking for clean sources of useable energy. Preventing US coal and scrubbers from being exported does nothing to reduce the overall problem. Building a clean energy source by candlelight doesn't seem too promising either.

In related news, those wacko environmentalists who run the People's Republic of China have announced the cancellation of plans for roughly 100 new coal fired power plants.  This, in a country that is practically made out of coal, and where the electrical grid is so underdeveloped that it shakes the imagination of people visiting for the first time.

And fracking hasn't come to China.  Yet.  There are very prospective looking black shales in the dry parts of central and western China, but the lack of technology, water scarcity, and pipeline infrastructure have made widespread natural gas development unattractive.

Capitalism might say there's one hundred American made Scrubbers not built.

march_hare Wrote:
-------------------------------------------------------
> In related news, those wacko environmentalists who
> run the People's Republic of China have announced
> the cancellation of plans for roughly 100 new coal
> fired power plants.  This, in a country that is
> practically made out of coal, and where the
> electrical grid is so underdeveloped that it
> shakes the imagination of people visiting for the
> first time.

The problem in China is a simple one.  They still use too much high sulphur coal primarily because it is mined relatively close to the population centers, making it cheap.  It also keeps people employed no matter how dangeous the mines are.  This is why they continute to have serious air pollution issues.

They have large deposits of low sulphur coal but they are farther away from the large population centers.

China stated publicly last year that they had planned on building at least some of the new coal fired power plants just to keep people employed, not because they really needed them.  They apparently came to their senses.  Maybe the economy is getting better over there...


Allen



Edited 1 time(s). Last edit at 01/18/17 19:19 by bradleymckay.

The vaunted great leap forward on solar power is also running aground on their filthy skies. With heavy smog and smoke cover, much less sunlight reaches the solar panels, reducing the amount of electricity generated that way.  So they need to burn more coal...


 

TCnR Wrote:
-------------------------------------------------------
> Closng the plants has nothing to do with Capitalism. The rules making Coal cost prohibitive may be well intended but are wreaking havoc on any market direction. There are still gross polluters across the Globe that are looking for clean sources of useable energy. Preventing US coal and scrubbers from being exported does nothing to reduce the overall problem. Building a clean energy source by candlelight doesn't seem too promising either.

You know how bad natural gas is kicking coal pricing right now?  You could eliminate ALL the pollution rules and STILL coal is more expensive.

There are lots of gas wells in the Marcellus region that are simply turned off because it isn't worth selling the gas at the curent price.

Brian

The Marcellus is changing how northeastern and middle Atlantic generating companies look at natural gas, which in turn changes how they look at coal. Two pipes to New England, one pipe into the Carolinas, and a reversed Transco (Tennessee?) pipe are already beginning to see changes in pricing patterns. In the 2017-2018 winter, we'll see even more.

If NY ever unlocks its side of the border for mapping and drilling, the whole game could change again.

Longwall coal mining in the future will require mountain top / side excavation, and I don't think there's any real appetite for that in much of the eastern US.

Lackawanna484 Wrote:
-------------------------------------------------------
> The Marcellus is changing how northeastern and middle Atlantic generating companies look at natural gas, which in turn changes how they look at coal. Two pipes to New England, one pipe into the Carolinas, and a reversed Transco (Tennessee?)  pipe are already beginning to see changes in  pricing patterns. In the 2017-2018 winter, we'll see even more.
>
> If NY ever unlocks its side of the border for mapping and drilling, the whole game could change again.
>
> Longwall coal mining in the future will require mountain top / side excavation, and I don't think there's any real appetite for that in much of the  eastern US.

Yup. And there is the Utica shale formation under the Marcellus shale that looks just as good if not better.

Brian

> where the electrical grid is so underdeveloped that it
> shakes the imagination of people visiting for the first time.

Actually there are very interesting developments with high voltage DC transmission in China's grid, which is better than India's among others.

YankeeDog Wrote:
-------------------------------------------------------
> In capitalism this is referred to as "creative
> destruction"; simply put a new better item
> replaces the old.  Film cameras replaced by
> digital cameras.  Film makers lose.  Natural gas
> is cleaner and cheaper than coal.  If you are

Cleaner is a capitalist value how?  How does a utility recoup "cleaner"?

And is natural gas actually cheaper absent recent government regulations on coal use/CO2 emissions?  How is it "cheaper" to build new billion dollar gas fired power plants and gas transmission pipelines when the coal plants and rail transport infrastructure already existed and were paid for and with coal selling for a lower price than natural gas on a BTU basis?  It can only be cheaper if the investment can be paid back in a timely manner by actual fuel/operating cost savings since no new revenue is involved in the switch, or if government regulations make coal use cost prohibitive.  The latter is hardly "capitalism" as traditionally understood.

> going to insist on substituting yesterdays
> technology for tomorrows you will ultimately
> lose..  This isn't good news for the mining
> industry or its workers. but it is the nature of
> the game. 

TVA is a government sponsored monopoly.

Capitalism?  Hahahaha!