by Aaron Flint
(Quick editors note before you read further. If you missed the Big Sky Business Journal this week, you would have missed the headline that Cloud Peak energy pumps $57 million into the Billings economy.)
How’s this for a lump inside of this coal story that you are not likely to hear trumped by the mainstream media?
From the lead story in today’s New York Times:
At ports in Canada, Australia, Indonesia, Colombia and South Africa, ships are lining up to load coal for furnaces in China, which has evolved virtually overnight from a coal exporter to one of the world’s leading purchasers.
Although it has plentiful domestic supplies, China imports coal because much of its own is low grade and contains impurities. Coal from the Powder River Basin of Montana and Wyoming tends to be low in sulfur, for example, allowing power plants to burn more without exceeding local pollution limits.
Let me stress that again: China has its own domestic coal resources, yet it imports coal from Montana and Wyoming because it is cleaner burning. Someone needs to tell that to some of the regulators, media, and environmental groups here in Montana who passionately work to make sure that a coal-fired power plant won’t be built here.
Politico’s “Morning Energy” adds to a front page spread in the NY Times:
– The New York Times this morning has a front-page look at how the U.S. and other developed countries are increasingly shipping coal to China, even as the exporting countries are moving to limit construction of coal-fired power plants at home.
NYT: “As a result, not only are the pollutants that developed countries have tried to reduce finding their way into the atmosphere anyway, but ships chugging halfway around the globe are spewing still more. And the rush to feed this new Asian market has helped double the price of coal over the past five years, leading to a renaissance of mining and exploration in many parts of the world.” http://nyti.ms/awqLLY
BY THE NUMBERS – Last year was the first that China imported more coal than it sent abroad, but it is already on pace to import as much as 150 million tons this year. (The country also burns roughly half of the 6 billion tons of coal used globally each year.) The U.S. exported a little over 2,700 tons to China last year, but that figure ballooned to 2.9 million in the first half of 2010 alone.
So, here we have it- the environmental groups want to shut down access via the ports to be able to ship Montana’s cleaner coal to China.
If China, as the NY Times reports, has a lot of its own coal, and the enviros keep China from importing our cleaner coal- won’t they just burn their own dirtier coal in response?
Meanwhile, Bloomberg News highlights the commodity-fueled booming Great Plains economies to our neighbors to the East.
The agricultural Midwest — particularly North and South Dakota, Kansas and Nebraska — has been leading the U.S. economic recovery as its banks, businesses and households avoided the worst of the housing bubble’s collapse and the financial crisis that followed. Now the region is getting a further boost from record exports of commodities, driven by demand in China and Russia and a declining dollar. U.S. farm shipments next year may surpass the 2008 record of $115.3 billion, Joe Glauber, the U.S. Department of Agriculture’s chief economist, said last month.
Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The rise in commodities prices has been a very significant tailwind for the entire region,” as strong demand worldwide drives sales of products, including agricultural equipment, financial services and fertilizer.
“It goes beyond the farm itself,” Zandi said.