New EPA coal regs = $180 billion

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Their existing approvals were all based on THEM offering an operational design life of 25 years. The approvals to operate would have been based on the information offered by the proponent...as would their tax write-offs and credit structure...once they go past that period, why shouldn't they be brought back to the table ?
 
Originally Posted By: Tempest
Someday there might an individual mandate for car owners to update their cars to the ever changing "clean air" regs and then the general populace will find out what "big energy" has had to deal with for decades.



Equating cars to capital plant equipment is kind of silly to me. Cars have a planned obsolescence, a known mean lifetime, and a known turnover rate. All this means that there is a natural refresh in the market because a car is not the same kind of a durable good that a major system like a power plant is.

Do you change your house as often as your car as often as your refrigerator as often as your computer as often as your toothbrush? If not, then why is it apples-to-apples arguments on cars to powerplants? For items that naturally refresh and replace themselves in time, a different kind of implementation strategy may be used than something that is put into service and can remain unchanged for a VERY long time...
 
Isn't it part of the free market?

When the requirement and specification of what the society needs improve, as a business you have to improve to catch the competition to provide it at a cost that make sense, or you go out of businesses.

Every time the market changes there will be companies going out of businesses and people lose their jobs. Most people other than collectors will not buy a 50s car for daily transport, they'll buy a 2012 new car instead. Why would a business sell 50s car in 2012?

Just because you are not living near the power plant that wouldn't meet the emission reg, doesn't mean there aren't people living near it or downwind from it. The lost generation capacity will be made up in the market with other power plants going online, and power plants run at different capacity based on the demand anyways. So to the market it is only going to replace dirtier with cleaner capacity at a higher cost. Yes, running an old dirty plant that is completely depreciated will be much cheaper to the owner of the plant even if it means lower efficiency or higher emission, but that doesn't mean he will charge the market less than market. The consumer will not always save money if it is stayed open instead of replaced by a natural gas plant.

People losing jobs? If the capacity was tight there will be new jobs in new power plants. If the capacity was sufficient then it is really the market force in play. I'd imagine most people are pro market here. If electricity cost change is minimal, it shouldn't affect general employment. I have a hard time seeing this is to be blamed for economy instead of Iran oil trade ban.
 
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Isn't it part of the free market?

There is no such thing as a free market in the power industry. I have a post on the last page that makes this clear.

The idea that government regulations are part of a free market is inherently contradictory.
 
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All this means that there is a natural refresh in the market because a car is not the same kind of a durable good that a major system like a power plant is.

There should be a natural turnover for power plants as well, but there can't be because every aspect of the industry is fully regulated. The "table" as Shannow puts it. It is government regulation that prevents turnover and new investment in new plants.

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Cars have a planned obsolescence, a known mean lifetime

According to Shannow, so do electric power plants.

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For items that naturally refresh and replace themselves in time, a different kind of implementation strategy may be used than something that is put into service and can remain unchanged for a VERY long time...

Why are the people at the EPA qualified to determine what long term power station implementation should be?
 
Originally Posted By: Shannow
Their existing approvals were all based on THEM offering an operational design life of 25 years. The approvals to operate would have been based on the information offered by the proponent...as would their tax write-offs and credit structure...once they go past that period, why shouldn't they be brought back to the table ?

Ex post facto??

My question is why should they be? Why should the government be engaged in activity that will cause energy prices to necessarily skyrocket?

Those 25 years have brought jobs and plenty of tax revenue into the area. Continuing operation will continue that trend. Dead power plants will bring neither, and drive up prices for consumers.
 
Originally Posted By: Tempest
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Cars have a planned obsolescence, a known mean lifetime

According to Shannow, so do electric power plants.


You obviously don't understand a thing that I've ever said, or you are being purposely obtuse.
 
It seems that Tempest is talking out of both sides of the mouth.

There should be a natural turnover, but then there shouldnt be because prices will skyrocket?

EPA isnt qualified to make decisions, OK, but it doesnt appear that the power companies are either.

Going nowhere fast...
 
Originally Posted By: Shannow
Originally Posted By: Tempest
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Cars have a planned obsolescence, a known mean lifetime

According to Shannow, so do electric power plants.


You obviously don't understand a thing that I've ever said, or you are being purposely obtuse.


Is this not from your post?
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an operational design life of 25 years
 
Originally Posted By: JHZR2
It seems that Tempest is talking out of both sides of the mouth.

There should be a natural turnover, but then there shouldnt be because prices will skyrocket?

EPA isnt qualified to make decisions, OK, but it doesnt appear that the power companies are either.

Going nowhere fast...

I clearly stated that there is no natural turnover because the government won't allow it, and that prices are skyrocketing due to intervention in the market.

Why does it appear that power companies are not qualified to make power company decisions?
 
The problem is the emissions and that can be fixed. But the EPA is on a vendetta to close all coal fired plants and shut down coal as a power source because it's too dirty.

It's an over-regulated industry already. Poor fellows, all they need is some stack scrubbers. We should all donate!
 
Originally Posted By: SteveSRT8
...the EPA is on a vendetta to close all coal fired plants and shut down coal as a power source because it's too dirty.

The EPA's agenda appears to be working...

Coal company stocks down after Patriot Coal bankruptcy

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(Reuters) - Coal mining shares fell on Tuesday, a day after Patriot Coal Corp PCXCQ.PK filed for bankruptcy and sparked fears that other companies might follow suit...

...the U.S. Environmental Protection Agency has proposed new rules that would make it nearly impossible to build coal-fired power plants.
 
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(Reuters) - Coal mining shares fell on Tuesday, a day after Patriot Coal Corp PCXCQ.PK filed for bankruptcy and sparked fears that other companies might follow suit...

Coal prices have plummeted this year as electricity producers have turned to cheaper natural gas


Fixed it for you from your own link...

Seriously !!!
 
The War Over Coal

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...banking and industry analysis firm Credit Suisse put expected and known closures for 2009-2012 at 111 plants, that's one-fifth of the nation's nearly 500 coal plants.

There are two main factors in the demise of those plants. First, the price of coal's competitor, natural gas, is decreasing. At the same time, a new rule from the Environmental Protection Agency is pushing the price of coal up.
 
Sometimes EPA rules go too far. Even the guy who appointed EPA's boss thinks so:

W. H. weakened EPA soot proposal, documents show

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The [censored political name] recently modified an Environmental Protection Agency proposal to limit soot emissions, according to documents obtained by The Washington Post, inviting public comment on a slightly weaker standard than the agency had originally sought...

Last year [censored political name] pulled an EPA proposal to impose stricter limits on smog-forming ozone on the grounds that it would be costly and the rules were up for review again starting in 2013.
 
Originally Posted By: LTVibe

The War Over Coal

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...banking and industry analysis firm Credit Suisse put expected and known closures for 2009-2012 at 111 plants, that's one-fifth of the nation's nearly 500 coal plants.

There are two main factors in the demise of those plants. First, the price of coal's competitor, natural gas, is decreasing. At the same time, a new rule from the Environmental Protection Agency is pushing the price of coal up.





Look just above. Coal prices going down. Seems like a stupid comment. is it the per ton or per million BTU cost of coal, or is it actually the cost of operating on coal that is going up??? I highly doubt the EPA is manipulating the spot price of coal.
 
From a few years ago, when coal was being pumped...

http://www.321energy.com/editorials/saville/saville021308.html

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Large vertical price rises are always bearish beyond the very short-term because they only ever happen towards the ends of rallies. The coal market will clearly reach some sort of top over the coming weeks, but there is no way of knowing whether it will be a short-term or an intermediate-term peak (it will almost certainly NOT be a long-term peak).

The performance of coal stocks relative to coal during 2004-2006 might be a reasonable indication of what's to come. To be specific, the weekly chart of the Dow Jones US Coal Index (DJUSCL) displayed below shows that coal-related equities continued to trend relentlessly upward for almost two years following the mid-2004 intermediate-term peak in the coal price


saville021308b.gif


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We continue to believe that the stocks of coal-producing companies should be accumulated on pullbacks. And as previously advised, we think Patriot Coal (NYSE: PCX), a US-based coal miner with annual production of around 24M tonnes, has an attractive risk/reward ratio


Throw in a GFC, which popped a LOT of bubbles...and you get

http://in.reuters.com/article/2012/07/16/patriot-bankruptcy-idINL2E8IDK9J20120716

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In its first year, strong coal prices and demand offset the higher costs of mining in the older coalfields of eastern Kentucky, West Virginia and Virginia. But the recession hit and coal demand fell, sending down prices along with Patriot's stock.

Patriot was able to acquire only one other asset -- a subsidiary of Arch Coal called Magnum.

DEVASTATING DEFAULTS

Then this year, demand sharply dropped when the mild winter depressed electricity use and some power companies switched from coal as natural gas prices made it a more economical fuel.

Patriot responded by cutting its workforce and production, lowering its 2012 sales target to 25 million to 27 million tons -- down from the 31 million it sold last year. Revenue in the first quarter of this year declined 13 percent to $502 million.

With less revenue, the company struggled to pay pensions and healthcare to workers and retirees, while debt repayments on $200 million in convertible notes due next year loomed


Borrow a bucket load of money to make a fortune in a bubble market, and lose your pants ???

Sounds like the EPA pulled that one off masterfully...and messed up retirement savings as far under their control as Europe and Australia.
 
Originally Posted By: JHZR2
I highly doubt the EPA is manipulating the spot price of coal.

Originally Posted By: Shannow
Sounds like the EPA pulled that one off masterfully...and messed up retirement savings as far under their control as Europe and Australia.

The EPA does not care about the price of anything. Nor do they care about any economic collateral damage caused by their regulations.


EPA's unintended environmental consequences: Ameircan coal exported to Europe

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...despite having the most ambitious carbon reduction regulations in the world, Europe is now heading in the opposite direction as they saw coal consumption increase by 3.3% compared to 2010.

Germany’s coal consumption increased by 1.2% compared to 2010, despite its renewable energy intentions, and large capacity of photovoltaic installations. Spain, who has also been investing heavily in renewable sources such as solar and wind, saw their coal consumption increase by more than 50%. Over all EU coal imports from the US increased by 49%.

The reason is purely financial. Coal imported from the US is very cheap...
 
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