Posted on 08/01/2006 6:53:46 AM PDT by thackney
Coal is in the running to overtake oil as the best-performing energy investment.
That, at least, is the emerging consensus from a range of speculators, investors and giant corporations including Wilbur Ross, the billionaire bankruptcy specialist; BHP Billiton, the world's largest mining company; and Merrill Lynch, the U.S. securities firm.
Because "coal is the cheapest, most abundant energy source" from North America to China, the surge in oil prices "has encouraged people to plan new coal-fueled power plants and to start using conversion technologies such as coal-to-diesel," said Richard Price, an investment banker at Westminster Securities in St. Louis, Missouri.
Coal is poised to top its recent highs because of record oil and natural-gas prices, said Francisco Blanch, the chief commodity analyst at Merrill Lynch in London.
In Europe, coal was at $62.55 a ton last week after reaching a 10-month high of $66.83 in March, according to ICAP, the interdealer brokerage.
Prices paid by U.S. utilities will climb 5 percent in the next year and double by 2021, said Price, a former vice president at Peabody Energy, the largest U.S. coal producer.
Converting coal into liquid fuel or natural gas becomes economical when oil remains at more than $40 a barrel, said Stephen Leer, chief executive officer of Arch Coal, a U.S. producer.
The cost of oil has more than doubled since January 2004, reaching a record $78.40 a barrel in July and averaging $68 in New York this year. It has not traded at less than $40 since June 2004 and will fall 19 percent next year to $60, according to the median forecast of 19 analysts who were surveyed.
Ross, 68, chairman of International Coal Group, is convinced that the search for a cheaper alternative to oil and natural gas will enable coal to outperform oil.
(Excerpt) Read more at iht.com ...
Known coal reserves in America could last 525 years!
That is why I am so big on coal gasification.
Any old timers remember how long a ton of coal could heat the typical house?
Fantastic. The US has been called 'the Saudi Arabia of coal' - without the burqas of course.
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