Archive for May 24, 2008

Coal Shortages Affect Power Production

BEIJING, May 24 — Coal shortages have forced 39 power plants in China to halt generation with 6.37 gigawatts of capacity affected, as fuel inventories further decline, the industry watchdog said.

Among the most affected provinces, Hebei only has 5.1 days worth of consumption and Hunan 3.4 days, the State Electricity Regulatory Commission said. Anhui has slightly recovered with 3.7 days of supply. The government’s warning level for coal inventories is seven days.

The situation has worsened from earlier this week when the SERC reported 32 power plants had been closed, affecting 4.82GW of capacity. China’s total installed power generating capacity was 713GW at the end of 2007, of which around three quarters were coal fired.

In quake-hit Sichuan Province, coal stockpiles at power plants averaged nine days of supply as of Wednesday. But one plant is running out of fuel and another eight are below the seven-day consumption line, the SERC said.

The shortfall comes after coal prices have surged over recent months.

Although higher coal prices are enough to trigger a state-mandated mechanism to hike power tariffs, industry observers don’t expect this to come any time soon as the government has to fight inflation, especially after the Sichuan quake.

As utility firms are squeezed between rising costs and capped tariffs, they are reported to be unwilling to stock up on the fuel.

China’s safety campaign to crack down on small and inefficient mines might also be playing a part in limiting coal supplies.

“The sharp decline of stockpiles means power shortfalls may come and fuel prices may continue to rise,” said Wang Shuang, a United Securities analyst.

The SERC did not point out how to tackle the shortages but said it was working on ensuring supplies throughout the earthquake-affected areas.

It called for more hydro power in Sichuan and said electricity was being diverted from other regions to supply the southwestern province.

(Source: Shanghai Daily)

There are several coal mines with miners trapped in them, condition unknown, from the earthquake:

A government official said Saturday that a rescue operation was under way for 24 coal miners believed trapped in three mines in the quake zone. The government said at least 176 coal miners were killed and 254 were missing in the 316 coal mines affected by quake.

From Reuters:

SHANGHAI, May 22 (Reuters) – China’s coal prices rose to a record high on Thursday due to higher international prices and rising demand for coal after last week’s devastating earthquake in southwest China, traders and analysts said.

The benchmark price for top grade 5,800 kcal/kg coal at Qinhuangdao, China’s top coal shipping port, rose 25 yuan from Wednesday to 745-755 yuan ($107-$108.50), up 62 percent from a year earlier, according to, a market information website operated by a domestic industry venture.

“With the fast rise in prices on the international market, people here expect that domestic prices will catch up,” said a Guangzhou-based trader, who asked not to be named.

Thermal coal prices at Australia’s Newcastle port, a benchmark for Asia, had risen to a three-month high near $135 a tonne by Monday, led by strong demand from Europeans looking for an alternative to expensive oil.

Traders and analysts noted that the high international prices provided a strong incentive for Chinese miners to export, which in turn put pressure on supplies on the domestic market.

In addition, the deadly earthquake that hit Sichuan province last week has shut several of the region’s hydropower stations and natural gas facilities, analysts said.

“Cuts in natural gas and hydropower production have led to surging demand for coal,” said Henry Liu, an analyst at Macquarie.

Coal prices are expected to continue to climb with the approach of summer, the peak electricity consumption season, but traders and analysts said the government might take steps to ensure coal supplies ahead of the Beijing Olympics in August. (Reporting by Rujun Shen; Editing by Edmund Klamann)

Even this ol’ rural Florida gal can see that energy sources are getting tighter, and the prices will continue to rise. Since it could take a decade or more for oil shale to be developed to be commercially feasible, I wonder what the hell the senate is thinking?

Oil Shale Hits Senate Roadblock

….The amendment failed on a 14-15 vote, but not before an emotion-packed debate that included Republican accusations that environmentalist concerns were preventing the country from reaching energy independence.

Tapping oil shale reserves has proven to be a tough proposition, both technologically and politically, for several decades now. Although Colorado’s reserves are estimated to be roughly twice the size of Saudi Arabia’s, it could take much of the next decade before significant supplies could be extracted out of the rock.

Still, “If we’re really serious about reducing pain at the pump, this is a vote that would make a difference in people’s lives,” Allard told the committee.

One of these days, somebody better explain to those public parasites that in energy, it is far better to be proactive than reactive.

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