Coal Exporters Banking On Asian Market Upswing
Despite a spate of bad news recently, companies trying to export coal to Asia remain bullish on the future. Backers of all the proposed West Coast coal terminals were at the Wyoming Infrastructure Authority's summer meeting.
The projects were originally proposed in 2011 and 2012, when Asian coal prices were well above $100, but they’ve fallen by almost half since then.
“Today you’d be challenged to make a dollar if we were exporting from the US West Coast,” said Michael Mewing, a consultant for Lighthouse Resources, which is attempting to build coal ports in Oregon and Washington. “But we’d be in the same position as 65, 70 percent of Australian producers and Indonesian producers. Something [in the market] has to break.”
Lighthouse is counting on increasing demand in Korea, Japan and Taiwan, but in a sign of changing times, Mewing said the company is not banking on selling coal to China, which has pledged to peak its coal use by 2020 in order to address climate change.
Despite China’s pledge, Mewing argued that coal demand in Asia is going to rise in coming years, whether Wyoming exports coal or not, and with it, greenhouse gases. He says if Wyoming coal were exported to Asia, it would be competitive with coal from Indonesia and Australia.
“The Powder River basin has freakish geology, freakish mining conditions. There’s nothing else like it in the world,” he said.
The Infrastructure Authority has commissioned a lifecycle analysis of greenhouse gas emissions from coal exports to determine their overall carbon contributions. The State of Washington is also doing its own analysis, which it will use to help decide whether to permit the proposed terminals.