GLG News by Mr. Thomas Shewski, Owner
GLG News is now G+ Insights
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G+ is a community for professionals, academics and entrepreneurs to connect through online discussions and in-person meetings. You will continue to see G+ Insights (formerly GLG News) here as well as on the G+ website, where you can share and discuss the G+ Insights you read.
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Court’s Ruling Against Clean Air Interstate Rule and Affect on Emissions Control Spending
July 14, 2008
Clean Air Rules Are Overturned by Court | www2.journalnow.com
The decision by the U.S. Court of Appeals for the District of Columbia Circuit striking down the Clean Air Interstate Rule (CAIR) will affect emissions control spending in the immediate term.
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Potential Future Actions by Congress and EPA on Emissions and Resulting Opportunity
July 14, 2008
Court Rejects EPA Rule | www.greentechmedia.com
The U.S. Court of Appeals for the District of Columbia Circuit struck down the EPA’s Clean Air Interstate Rule (CAIR) to reduce NOx and SO2 in 28 Eastern United States. This follows a court decision striking down EPA’s Clean Air Mercury Rule (CAMR). These court decisions will eventually cause actions and opportunities in the emissions control space.
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The Value of Fuel Surcharges in Rail Transportation Agreements for Coal
July 14, 2008
Railroads: The Calm After the Storm | investerms.com
Railroads, unlike airlines and trucking firms, are able to pass along the high cost of fuel in transportation agreements. Below discusses this and the value to the railroads for coal transportation.
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No Guarantee Rising Fuel Costs May Be Passed On By Regulated Utilities to Customers
June 23, 2008
Rapid-Rising Fuel Costs Force Power Price Increase | www.chipleypaper.com
The input costs for utilities to generate electricity are up. These costs include coal, transportation, natural gas, and power purchases. There are no guarantees, however, that a regulated utility may pass along these costs as discussed in the commentary section.
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Failure to Renew Production Tax Credits Could Dwindle New U.S. Wind Projects
June 23, 2008
Wind Power Backers Lament Tax Credit Limbo; Say Investments at Risk | milwaukee.bizjournals.com
Wind power qualifies for production tax credits. These production tax credits are set to expire on December 31, 2008 without renewal by Congress and the President.
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Run-Up in Coal Prices Benefit Those Utilities with Coal Assets
June 23, 2008
Utility Consumers Face Souring Costs | www.tradingmarkets.com
Bituminous coal prices have soared over 100% in the last year. This is obviously bad news to electric consumers dependent upon utilities with a large exposure to coal-fired generation. The run-up in coal prices could be a benefit to some utilities.
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It Is Not Just Capital Costs that Hinder Coal Plants
June 23, 2008
: Rising Costs Hinder New Power Plant Builds | db.riskwaters.com
As the article correctly points out, capital costs to build a new power plant have risen considerably since 2000; coal plants included. It is not just the up-front capital costs that have affected decisions to build new coal plants as discussed in the commentary section.
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Potential Consequences from Recent Drop in SO2 Allowance Prices
May 19, 2008
Alliant Investing $85 Million to Meet Clean Air Rules | www.redorbit.com
The recent plunge in SO2 allowance prices may affect the decisions of coal-fired power plant owners.
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Activated Carbon Injection for Mercury Control at Coal Plants
May 19, 2008
Controlling Mercury Emissions | pubs.acs.org
The D.C. Circuit Court of Appeals ruling on February 8, 2009 in favor of the plaintiffs that coal plants could not be removed from the list of mercury sources subject to a Maximum Available Control Technology (MACT) standard and the subsequent movements to require EPA to set a mercury MACT standard for coal-fired power plants provides an opportunity in the mercury control space, including activated carbon.
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Power Companies’ Generation Mix May Determine Their Financial Outcome Under CO2 Allowance Allocation
May 6, 2008
Power Companies Vie for Advantage Under Climate Plan | seattle.bizjournals.com
All of the various regulations being discussed in the U.S. Congress to slow, stabilize, and then reduce CO2 emissions nationally include some type of cap and trade system. Each of these programs have a portion of the CO2 emissions allowances being allocated for free to the U.S. electric generators. The allocation methodology and the power companies’ generation mix could determine companies’ financial outcome under the program.
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New Coal Plants and Required Coal Railcars
May 6, 2008
Q1 2008 FreightCar America Earnings Conference Call | www.freightcaramerica.com
The biggest driver for orders of coal railcars will be the new coal plants coming on line the next few years. The commentary section below discusses the number of new coal plants presented by FreightCar America on its Q1 2008 conference call versus an updated analysis by this author.
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BNSF Fuel Surcharge on Coal Transportation – By the Numbers
April 14, 2008
Railroad Fuel Surcharges Make Shippers Cry Foul | www.desmoinesregister.com
The BNSF and other railroads charge in new coal transportation tariffs and contracts a fuel surcharge to recover the cost of fuel. Other freight moves also come under fuel surcharges. The commentary that follows discusses by the numbers the BNSF’s fuel surcharge on coal transportation.
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Court Case Against EPA’s Clean Air Interstate Rule Offers Sulfur Allowance Opportunity
April 14, 2008
EPA Announces Results of the Sixteenth Annual Sulfur Dioxide Auction | yosemite.epa.gov
The EPA is currently being challenged in the courts by both the states and industry over various aspects of the Clean Air Interstate Rule (CAIR). The outcome of the case could provide an opportunity for those trading SO2 allowances.
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Current Price of SO2 Allowances Lower Generating Costs and Lower Coal Suppliers’ Realized Prices
April 14, 2008
EPA Auctions SO2 Allowances for $65.8 Million | uk.reuters.com
SO2 allowances are traded daily in the broker and private party markets. The value of these credits are down, affecting both the cost to generate electricity on coal and the realized sales price received by coal suppliers.
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Dispatch Costs on Coal to Rise in 2009 Due to CAIR NOx Rules
April 14, 2008
The Green Exchange Reports Robust First Week Trading Volume in Carbon, US Emissions Contracts | sev.prnewswire.com
The Clean Air Interstate Rule (CAIR) requires a further reduction in NOx from coal-fired power plants starting in 2009. This reduction in NOx will add to the dispatch cost from coal-fired generation.
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Coal Lease Acquisition Costs Increasing in Powder River Basin
March 24, 2008
Bid on Coal Tract Nearly Doubles | www.gillettenewsrecord.com
Coal lease rates in the PRB are climbing and will cut in coal companies’ margins as exhibited by Foundations recent successful lease bid and Rio Tinto’s higher, but unsuccessful bid. Also, the upfront payments are due often before the coal is even mined.
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March 20, 2008
Burlington Northern's Freight Demand Slows on Dollar | www.bloomberg.com
Railroads impose fuel surcharges in transportation agreements such as for coal transport, but the recovery mechanism timing follows the railroads’ purchase of the fuel causing an earnings lag. Also, legacy coal transportation agreements do not have fuel surcharge mechanisms squeezing margins on these hauls.
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March 19, 2008
Doyle Endorses Reduction in Mercury Emissions | www.madison.com
New Jersey vs. EPA was filed by several states and environmentalists against the EPA’s removal of power plants from the list of mercury sources subject to a Maximum Achievable Control Technology (MACT) standard and that mercury cannot be regulated by a cap and trade system under the Clean Air Mercury Rule (CAMR). The D.C. Circuit Court of Appeals ruled on February 8, 2008 in favor of the plaintiffs that coal plants could not be removed from the list of mercury sources subject to a MACT standard and did not rule on whether emissions can be regulated by a cap and trade system. This ruling opens up opportunities on new and existing coal plants to control mercury.
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Coal Supply and Demand Affect on Prices and Volumes
March 17, 2008
Citigroup: Perfect Storm or Perfect Swoon for Coal? | www.mineweb.com
The Citigroup reports states U.S. coal supply is ample and coal plant inventory levels are adequate such that the higher coal prices of the last several weeks will not hold. The discussion in the commentary section addresses U.S. coal supply and coal plant inventory and takes a different view than Citigroup.
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Number of PRB Tons in 2008 in 2009 to Backfill Eastern Coal Exports and for New Coal Plants
February 19, 2008
Sector Snap: Coal Falls After Downgrades | www.chron.com
The anticipated export of Eastern U.S. coal in 2008 and 2009 will need to be sourced in great extent from the Powder River Basin (PRB). This is in addition to the new coal plants coming on in 2008 and 2009 using PRB coal. The discussion below provides a forecast on these quantities from the PRB.
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