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I think cheap oversupply LNG will be the final dagger that kills coal.
falling demand killed coal.
that said, it could possibly make a comeback.
I think cheap oversupply LNG will be the final dagger that kills coal.
Agreed.
Sucks to be a coal producer.
Remember, Winehole23, that demand for these types of fuels is driven by power plants, which are long term 30+ year investments.
Do a bit of reading on the types of new power plants being built, versus what is being retired. coal is generally being retired, and LNG is generally what is replacing them, followed by renewables.
As both of this happens the cost of installed watt/hours for those types of power will drop, due to simple learning curves.
We are seeing the benefits of investments in technology in renewables as well. There just isn't much more you can squeeze out of old tech like coal.
Economist is finally calling it. Not "if" but "when".
http://www.economist.com/news/leader...ming-debt-bustChina’s financial system
The coming debt bust
CHINA was right to turn on the credit taps to prop up growth after the global financial crisis. It was wrong not to turn them off again. The country’s debt has increased just as quickly over the past two years as in the two years after the 2008 crunch. Its debt-to-GDP ratio has soared from 150% to nearly 260% over a decade, the kind of surge that is usually followed by a financial bust or an abrupt slowdown.
China will not be an exception to that rule. Problem loans have doubled in two years and, officially, are already 5.5% of banks’ total lending. The reality is grimmer. Roughly two-fifths of new debt is swallowed by interest on existing loans; in 2014, 16% of the 1,000 biggest Chinese firms owed more in interest than they earned before tax. China requires more and more credit to generate less and less growth: it now takes nearly four yuan of new borrowing to generate one yuan of additional GDP, up from just over one yuan of credit before the financial crisis. With the government’s connivance, debt levels can probably keep climbing for a while, perhaps even for a few more years. But not for ever.
When the debt cycle turns, both asset prices and the real economy will be in for a shock.
This will get ugly, and have global repercussions.
My wife and I need to start really catching up on retirement savings, but I am tempted at this point to opt instead in paying off debts. By the time this crash happens, our cash needs will be far less, and we should be able to snap up equities on the cheap.
Building LNG plants are hands down the most interesting projects I've ever been a part of.
Totally irrelevant to the conversation here but just wanted to Humblebrag a bit.
Did FERC Smash The Biggest Roadblock To Clean, Local Power For Electric Co-ops?
Because they only sell 11% of the country’s electricity and they largely overlap politically conservative areas, electric cooperatives are often the forgotten stepchild of the clean energy movement.
But with 7 of the top 10 dirtiest power systems (as measured by carbon intensity) and territory that overlaps some of the best renewable energy resources in the country, electric cooperatives are ripe for revolution.
With a recent ruling, the Federal Energy Regulatory Commission may have recently crashed one of the biggest gates to the cooperative clean energy party.
Local Power Supersedes Contract Obligations
Although FERC didn’t accept Delta-Montrose’s rationale, they did accept their conclusion.
In requiring electric utilities to purchase renewable power from “qualifying facilities,”* FERC said that the 1978 federal PURPA law supersedes the cooperative’s contract.
Delta Montrose must purchase power from small renewable energy facilities in their service territory, and pay at least their own “avoided cost” of energy, e.g. the cost of the energy purchases avoided by the purchase from the qualified PURPA facility.
This is a contested issue, with many utilities asserting that this is simply their wholesale cost to purchase a marginal kilowatt-hour of power. On the other hand, a FERC ruling in 2010 allowed that states could set avoided cost rates by technology, on the basis of the differing values of the renewable resources (see p. 34-36). FERC allowed that Delta Montrose could negotiate a power purchase rate.
The FERC ruling doesn’t allow Delta Montrose to develop more of its own clean energy resources outside its contractual limits, nor does it change where they get the balance of their energy supply from: Tri-State.
FERC noted two potential exceptions to the ruling that did not apply to this particular case.
Some distribution cooperatives have transferred their PURPA purchase obligation to their wholesale supplier. In that case the power generator would have to sell to the wholesale supplier (e.g. Tri-State).
Some utilities have received a waiver from their purchase obligation (see p. 61-62 of link) under PURPA, but only if there’s a compe ive marketplace available for the generator to sell into other than the utility (unlikely to apply to most cooperatives).
http://cleantechnica.com/2016/05/06/...eanTechnica%29
It isn't just AEP, People's Daily has sounded the alarm:
http://www.telegraph.co.uk/business/...debt-hits-lim/The 11,000 character text - citing an "authoritative person" - was given star-billing on the front page. It described leverage as the "original sin" from which all other risks emanate, with debt “growing like a tree in the air”.
It warned of a "systemic financial crisis" and demanded a halt to the "old methods" of reflexive stimulus every time growth falters. "It is neither possible nor necessary to force economic growing by levering up," it said.
It called for root-and-branch reform of the SOE's - the redoubts of vested interests and the patronage machines of party bosses - with an assault on "zombie companies". Local governments were ordered to abandon their illusions and accept the inevitable slide in tax revenues, and the equally inevitable rise in unemployment.
If China does not bite the bullet now, the costs will be "much higher" in the future. "China’s economic performance will not be U-shaped and definitely not V-shaped. It will be L-shaped," said the text. We have been warned.
Moody’s warned this month that China’s state-owned en ies (SOEs) have alone racked up debts of 115pc of GDP, and a fifth may require restructuring. The defaults are already spreading up the ladder from local SOE’s to the bigger state behemoths, once thought – wrongly – to have a sovereign guarantee…
The rot in the country’s $7.7 trillion bond markets is metastasizing. Bo Zhuang from Trusted Sources said more than 100 firms cancelled or delayed bond issues in April due to widening credit spreads…
Ten companies have defaulted this year, with the shipbuilder Evergreen, Nanjing Yurun Foods, and the solar group Yingli Green Energy all in trouble this month. But what has really spooked markets is the suspension of nine bonds issued by the AA+ rated China Railways Materials, the first of the big central SOE’s to signal default. “This has greatly weakened investors’ long-standing expectation of implicit government support,” he said.
http://www.bloomberg.com/news/articl...t-swap-trading“The launching of CDS trading shows the government may allow more bond defaults,” said Ivan Chung, head of Greater China credit research at Moody’s Investors Service in Hong Kong. “CDS will help investors mitigate the risk and alleviate market sentiment if investors face more defaults or suffer more losses after defaults.”
currency shock?
http://www.telegraph.co.uk/business/...reserve-shock/Three-month dollar LIBOR rates have jumped by a half to 0.89pc since June as liquidity is drained, raising the cost of borrowing for the world's dollarized financial system.
oh, hey, China hasn't imploded yet?
Huarong is an SOE belonging to the Department of Interior
BZZZT.
Wrong answer.
Wind will be what kills coal.
No not yet. I vastly underestimated the scale of the migration happening internally.
The demographics that I pointed out a few years ago are coming to a head sooner than many think.
The Party is sitting on the most current census because the picture it paints is bleak. Brain drain immigration will make it worse.
https://www.economist.com/china/2021...tion-shrinking
Couple that with continued building of empty apartment buildings and misallocation of capital, together with an isolated strongman who surrounds himself with yes men...
It is heading for that brick wall. The migration that drove real demand in the industrial cities has finished. With a shrinking working population the demand wave that absorbed all the bad building that was being done is breaking.
China will end up paying for its hubris at some point, and it will be scary to watch.
What did you end up doing? Paying debt, saving, neither?
Sorry.
You get zero details on my life. no confirmations, no denials.
I have determined you are about as dishonest an interlocuter as it gets, and your only motivation for asking for such is dishonest personal attacks.
The core of modern conservatism is dishonesty, and violence. I have come to the conclusion there is no real dealing with people that hew to that kind of ideology.
Neither
ten year.aniversary of this stupid thread
no confirmation, no denial.
confirmation bias.
Epistemology. Get some.
You should probably read the economist article I posted. How will China overtake the US with a shrinking, aging population?
The young generations they are producing are tops in the world as far as education and ambition and unlike the US the teachers unions don't run the schools. The US educational system is getting worse every year because the student raw material is getting worse every year. Throwing money at it won't solve the problem.
We've got our own issues in these regards. Our population is also aging, and growth is slowing.
Looks like the only thing ugly is your prognostication skillz, tbh
smh. Regurgitation of right-wing talking points. "teacher unions"
Chinese education drills memorization, it doesn't encourage critical thinking.
US educational system is still the envy of the world because it does.
This has been not really a secret, is fairly widely understood, and directly related/confirmed to me by numerous Chinese, including the gal in my office who was recently given her US citizenship.
Once Chinese travel outside of the party information bubble they often come to see it for what it was. Those talented people will then, like my co-worker, leave. This will make the wave of demographic collapse worsen.
Economic projections I have read about are that China will not overtake the US and have its long term growth severely hampered. I will see if I can find the link to that.
Last edited by RandomGuy; 05-04-2021 at 12:11 PM.
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