Destroying Coal In America

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By: Wayne Brown

 

Coal is one of the last frontiers of affordable energy in the world.  It has been a rather plentiful resource thus that has kept the price reasonable.  For many years, it was the product of just a bunch of good old boys digging it out of the seams buried beneath the ground.  It also became the basis of a lot of deaths in underground mining and a virtual playground for OSHA in terms of work guidelines and safety.  Sadly, many men perished and continue to die in these mines as evidenced by the recent cave-in in South America which trapped miners for weeks.

 

So what could be good about the EPA coming down hard on Soros’ favorite coal-mining operation, Arch Coal in Virginia?  If anything, one might think that Soros’ connection with Obama would allow him to call the dogs off at EPA so his company could get on with life.  Not so fast, QuickDraw, maybe that is the in the best interest of Mr. Soros and his investments.

 

Arch Coal long ago saw the hand-writing on the wall for coal mining in Appalachia.  Their activities are and have been on the decline in that region for several years and mining as a whole has declined there by roughly 20% in the last few years.  This recent set of events set the precedence that Arch, nor any other coal company for that matter, will be allowed to get at the coal in those mountains through the use of open pit mines.  The alternative is to continue with underground mining and deal with the expense and safety issues associated with it.  Those issues make the process expensive and that expensive quickly undermines the profitability of the business at coal market prices.  Thus, what Arch has just done is to make sure that open-pit mountain top coal mining is dead in that region…a concept which hopefully the EPA and activists will spread to other areas of America.

 

 

 

 

What does this mean for George Soros?  Plenty, the way I see it.  First, when something is plentiful, it is difficult to make a profit on it.  But what if it was not so plentiful and demand was high?  Well, that changes the story a bit for us and I am afraid that is just the case here with coal and the future of coal.  Soros recognizes the situation and plans to capitalize on it.  Unfortunately, the result will be yet again a setback to America which can only bring a smile to Soros’ face…more so than even making money can.

 

80% of all electricity produced in China is done by coal-fired means.  China has coal in its natural resources but the countries mining system is basically unsafe and in disarray.  As industrialization grows and expands on the frontier of China, the demand for more electricity grows with it.  Eventually, China’s coal mining industry will not be able to keep up with the demand.  This will send China into the international market for coal supply and the same scenario which has played out with crude oil will play out with coal.

 

Meanwhile, Soros and company have set precedence and created scenarios that make it more and more difficult to pull coal out of the ground in America.  More and more companies are throwing in the towel and walking away.   Arch Coal just coincidentally bought heavily into a west coast export facility for coal….hmmm.  Interesting huh?  Obviously Soros believes the export market for coal will soon be on the rise.

 

As China’s need for coal rises, the price rises.  As the supply of coal, due in great part to the difficulties associated with mining, diminishes, the price rises yet again and America finds itself competing for a portion of what was once a plentiful energy resource.  The EPA is happy because they have brought things in compliance with their Clean Water Act. The environmentalists are happy because they have helped to eliminate that evil coal from the its level of use in the USA and cleaned the air a bit more.  China is happy because they can continue to fire their coal plants and make electricity.  George Soros is happy because he has dealt the USA another economic blow and made money while doing it.  President Obama is happy because George Soros is happy.

 

Coal production from mining peaked around 1990 then struggled to regain footing only to eventually slip even lower after 2000.  By 2010, production was back to 1983 levels with forecasts for the future which indicate that production will drop by almost one-half again in the coming years.  It is doubtful that China will be getting off of coal for its electricity production anytime in the near future.  Their best alternative is hydro-power which likely will not be capable of replacing the current situation with coal or nuclear which is far too expensive to employ in terms of setup.  With that forecast use and the continue use by the USA and Europe, the demand for and the price of coal on the world markets can only climb to heights never seen before.

 

The USA and Russia have the largest deposits of coal in the entire world.  China and other Asian area countries follow behind with less than half the potential.  Other countries are below the levels of Asia.  Based on current consumption models, the World Coal Association estimates that there is enough resource production to supply the world with coal for the next 119 years.  This is compared to gas and oil which is less than half that forecast number.  On that basis, one can see the rationale of why China would stick with coal as their electricity producing fuel.  At present, most of the coal produced in a given country is consumed there.  The latest figures indicated that only 16% of hard coal resources end up in export movements.  China currently produces more coal than the USA at a rate 3 to 1.  India is the next largest producer to the USA and China out produces it almost 6 to 1.  China produces just over 3 billion metric tons of coal in recent years annually from their own resources.  Based on coal reserves in China and the annual production rates, it is now estimated that China will exhaust its resources within 48 years, the same point at which petroleum energy is projected to become very scarce.  Obviously, the coal reserves of both the USA and Russia will become very valuable in that light.

 

Currently, approximately 67% of the coal production in America is done from open-pit mining. These mines are fairing better environmentally in the western USA and Arch Coal has staked its ground in that holding.  With the steps taken in Appalachia, open-pit mining will continue on the decline and the demand for coal from the western mining operations will increase.  Eventually, the expense associated with underground mining of coal in Appalachia may well drive those in that sector of the industry out of the market unless they are mining a resource which has particular characteristics not found in the coal achieved from open-pit mines.

 

At any rate, if your home is currently heated by a coal-fired furnace, your days of cheap heat may be a thing of the past and you may find yourself soon competing with the Chinese for a ton of coal.  Energy will continue to be a battleground for the world, a source of greed, and a lightning rod for the environmentalists of the world.  Nothing could make a man like George Soros any happier.  In the interim, one can only wonder what will happen to Appalachia.

 

 

 

 

© Copyright WBrown2011.  All Rights Reserved.

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Comments 21 comments

Pamela N Red profile image

Pamela N Red 5 years ago from Oklahoma

Interesting story. It's a dangerous way to make a living that is for sure.


Wayne Brown profile image

Wayne Brown 5 years ago from Texas Author

@Pamela N Red...Thank you...It sure is a dangerous business but I am sure Mr. Soros will fix all that when he controls most of the coal. WB


dahoglund profile image

dahoglund 5 years ago from Wisconsin Rapids

I have often thought of open pit mining as probably safer.I come from Minnesota where there was much open pit mining of iron at wone time. My observation is that the earth readjusts to these things and there are hill and sometimes lakes where mines used to be. Also I lived near Coal valley, Illinois where it looks much the same. I don't know the science of it but there are places where I would think open pit mining would be appropriate.

As far as soro's is concerned he seems to be a greedy capitalist and a liberal too. I don't know where that fits into the equation.


Wayne Brown profile image

Wayne Brown 5 years ago from Texas Author

@dahoglund...Soros will make sure the EPA stops the open pit practice in the east and even tightens it up a bit in the west. This will drive small producers out of the business and leave more for the big guys who have export on their minds...China will take America...resource by resource because we have greedy people willing to sell it to them. The Trail of Tears is not something that just lives in the past...it lies in our future. Thanks for the good comments DA. WB


William R. Wilson profile image

William R. Wilson 5 years ago from Knoxville, TN

Wayne - if you lived out east and saw what Mountain Top Removal coal mining was doing to the land and water you might not be so flippant about it. MTR is an abomination.


Wayne Brown profile image

Wayne Brown 5 years ago from Texas Author

@William R. Wilson....William, please go back and read the piece again as you seemed to have missed the whole point of the article. This is not a commentary on MTR at all. I take no position on the process other than to point out that the EPA is shutting down this type of mining in Virginia. At the same time, I find it rather ironic that George Soros would be investing his money in the company which the EPA is coming down on. I think there is more to the story as it relates to Soros and the coal industry...that's the point. I am sure such a process does reek havoc and I have no beef with the EPA coming down on it...but I think there is more there as it relates to Soros. WB


drbj profile image

drbj 5 years ago from south Florida

Isn't it interesting, Wayne, how we seldom know the real facts behind the news that we read? And we probably never will. What we can be sure of is that the price of coal will continue to rise just as gasoline has.


OpinionDuck profile image

OpinionDuck 5 years ago

Wayne, this is a great hub except for one thing, I never thought about this aspect of coal and China.

Maybe we can pay down our trillions of dollars in debt with China from the coal we have in this country but we are not allowed to use it here.

Thanks


Micky Dee profile image

Micky Dee 5 years ago

Some of the mining lately has been quite an eyesore and the ruining of an entire mountain and more. It's a hazardous job with a short life expectancy. This is all over the world. We need alternatives for our energies and needs. Great write.


breakfastpop profile image

breakfastpop 5 years ago

Well done Wayne. I agree there is way more to this story than meets the eye. There always is.


Wayne Brown profile image

Wayne Brown 5 years ago from Texas Author

@drbj...I agree with you totally and Soros will get richer while America gets poorer. WB

@OpinionDuck...With China producing 80% of its electrical needs with coal, you can see where demand is headed...well beyond their resource level. WB

@Micky Dee...I don't disagree Micky. I think Soros intends to run a lot of people out of the business and the EPA will help and then he corners the coal export market with China. WB

@breakfastpop...Perhaps Scotty can enlighten us in the future on the is situation! WB


sam3m profile image

sam3m 5 years ago from New York

wayne, it's interesting that your caution is about what soros will do as opposed to what the koch brothers are doing. nothing like objectivity to color your views.


Wayne Brown profile image

Wayne Brown 5 years ago from Texas Author

@sam3m...Sam, I'm sorry but I have not heard any statements out of the Koch organizations attacking capitalism and vowing to do everything to destroy democracy. When we talk of colored objectivity perhaps you are referring to the Koch Brothers support of Liberaterian and Conservative movements within the political structure of the USA including the Tea Party. Maybe that does not set well with you, I don't know but until I see a more sinister basis for their direction, I do not view them as "already doing" what George Soros intends. In fact, I see something which leans entirely in the other direction and Thank God there is someone around who has the financial means to counter Soros' nasty little deals. I appreciate the read and your comments. Thanks much. WB


Harvey Stelman profile image

Harvey Stelman 5 years ago from Illinois

Wayne, I hate Soros, but he man knows how to make $. This was an excellenty researched article. H


Wayne Brown profile image

Wayne Brown 5 years ago from Texas Author

@Harvey Stelman...I share your feelings Harvey. I think his dollar making in based on insider trading and forehand knowledge...something a fool could do given the opportunity. Coal has been tossed aside as a forgotten energy in America yet it is relatively cheap. That will not last long and when it is burned, it won't be in American furnaces...Soros will see to that. WB


AskAshlie3433 profile image

AskAshlie3433 5 years ago from WEST VIRGINIA

Hey there Wayne. Great hub. You put up a great presentation. That is what a lot of people do not understand. The people in the background pulling the strings. They don't understand that coal keeps our power bills very low, compared to others. If we loose coal, enjoy the high heating bill. I appreciate this hub. I am from West Virginia and my husband worked for Arch Coal at a site in Madison/Danville West Virginia. This is the largest surface mine in the state. They laid him off years back, when Obama came in and ruled a cleaner coal act. Or whatever. EPA took all the permits. This was one of the safest mines and they had hundreds of acres built back from mining. This offers a job for thousands in WV. One of the most highest paid jobs. A coal miner risks his life everyday, to provide for his family. Coal is cheap, very cheap compared to other sources of energy. We are looking for cleaner ways and we are doing them now. When we didn't get the permit for Logan Spruce Mine, we lost thousands of job. Coal is a vital source for the economy. We ship it out to other countries. Wayne, this is a great hub and thank you. They can cay what they want about mountain top removal. For those, let them stay in the dark. See how long they last. Plants, water, trees, and animal life are put back on old mining spots. We have mountains protected. They don't say nothing when they destroy the mountains for a highway or a shopping center do they. Of course they don't. It benefits them. Great hub.


Wayne Brown profile image

Wayne Brown 5 years ago from Texas Author

@AskAshlie3433....Thank you. I have been watching George Soros lately as well as our President. I find it such a coincidence that they move the the same cirles and have the sames ideas. I appreciate the great comments. WB


AJReissig profile image

AJReissig 5 years ago from New Richmond, Ohio

Great article. As a person who lives in coal country, I have see the huge numbers of jobs that the coal mines provide, as well as the jobs lost due to the decline of the mine. I would love to see the EPA go away. The regulation of business is best done at the state level. Let's let West Virginia decide what is best for West Virginia; Texas can decide what is best for Texas, and Ohio can decide what is best for Ohio. Let each state be its own master; that is the principal that this country was founded on.


Wayne Brown profile image

Wayne Brown 5 years ago from Texas Author

@AJReissig...I think you make a solid point. The EPA should simply be the watchdog which sets the standards for the states. The states should be charged with the regulation and oversight of the industry. As long as a state was meeting the standards set forth for emissions, etc. then they would be in good stead with the EPA. Instead we have a federal organization coming like whiskey still raiders...federal cowboys and totally out of control on the license that if it is good for the environment, screw everything else. Thanks for the read and your great comments. WB


David Warren profile image

David Warren 5 years ago from Nevada

Well written and informative. Thanks for sharing it. Voted up


Wayne Brown profile image

Wayne Brown 5 years ago from Texas Author

@David Warren...Thank you for your comments and praise! Manipulation is alive and well in all areas of our lives. WB

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