Changing for the betterPublished 9:56am Wednesday, December 18, 2013
At a recent Mines and Money conference in London, the sentiment towards coal was changing – for the better.
Two issues were responsible for the positive tone in conversations with investors:
• The price of thermal coal remains low
• The energy equation is fast morphing into a crisis due to the massive tax support for “green” energy that is starting to hurt consumers and industry, worldwide Europe’s green nightmare is coming to life. Due to its low costs and strong supply, coal finds itself sitting in a dominant position, even though the government prefers green energy no matter what the cost.
There is a point when industrial energy consumers will snap as they risk bankruptcy because of high power bills. Green taxes, used to encourage investment in wind and solar energy, are destroying the businesses.
Governments across Europe thought they could raise taxes to all consumers to subsidize green power. They hope one day to become a major source of energy by becoming cheaper as availability increases. They assumed that by throwing enough money at green power the day would magically come when it could replace coal, nuclear and gas.
Households will join industry to force government to see the monumental mistake in going down the green power route.
In Britain and Europe an inevitability of what is happening all comes down to the winner in any business battle, the most cost-efficient supplier.
The cost advantage of coal has been distorted by government subsidies of green alternatives. However, as the game unfolds, consumers will demand a switch back to coal on the grounds of price and reliability.
The current administration in the U.S. needs to take off the rose-colored glasses and observe what is happening across the pond. It is easy to see that the current administration inhaled.
Joseph P. Smith is the owner of Pyro-Chem Corporation in South Point and has worked in the energy industry for more than three decades. He can be reached by email at firstname.lastname@example.org