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Arch Coal Inc. Message Board

  • jaydubauhawk jaydubauhawk Nov 11, 2013 6:23 PM Flag

    Help, getting nervous

    I am long ACI. Was talking to a power plant engineer for Kiewit yesterday who was moving to New Jersey temporarily to help build a new natural gas plant. I'm from Kansas. I thought, perfect opportunity to pick his brain. I asked him about coal, and he kind of laughed, saying they don't make coal plants anymore. We talked about the new natty gas export terminals, which he confirmed will be operating 2015-2017.
    I got kind of annoyed when he said they won't build coal power plants anymore because it is too expensive having to pay the carbon tax fee the EPA is putting into law. Does that mean no more coal plants will be built?
    I asked him what's going to happen to the coal then. He said we just won't need it.
    I thought to myself that's a bunch of crawp. Like we are going to let perfectly good coal sit in the ground. Bugs me that power plant engineers are now developing the mindset of just natty gas.
    At the same time, maybe this is good, if even the engineers are fooled, everyone will get caught off guard when coal comes back. Natty gas prices are going to sky rocket if all new plant use natural gas. This is an awesome scenario building up, can't wait till 2017!

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    • I am not nervous about ACI..I am eager to buy ACI shares and options when it hits $4 this week. I'd like to expand my shares held to 75,000 from the current 70,000 and buy more options to make the quick money.

    • Don't worry so much, there aren't enough natgas plants being built to make even a small dent in coal consumption in the next decade. It would cost billions upon billions to build them and it's not going to happen. It's just another Obama fantasy like Obamacare and Clean Energy, it all sounds good but when you juggle the real numbers they don't look so great. CHANGE is only good if it is feasible and makes dollars and sense in the REAL world.

      Sentiment: Strong Buy

      • 1 Reply to makemy2005
      • The thing that scares me is that Obama and current Government doesn't understand what works and what doesn't. They don't know how to read numbers and regardless if it loses money they will keep pushing it. They keep borrowing to push their agenda. The debt limit just gets in their way so now they want to get rid of it No one will vote them out either because America is changing. It's now becoming the don't work and get free hand outs Country. People need to wake up before our leaders just give it all away.

    • The Energy Information Administration (EIA) released its International Energy Outlook 2013 on July 25, reporting that global energy demand will grow by 56 percent between 2010 and 2040. According to EIA, most of this growth will come from the developing countries where strong economic growth is driving additional energy demand. EIA estimates that China and India will account for half of the world’s increase in energy consumption through 2040. China, for example, used 3.4 percent more energy than the United States in 2010, but is expected to double U.S. energy demand by 2040. Further, while nuclear and renewable energy are projected to be the fasting growing sources of supply, fossil fuels are still expected to supply almost 80 percent of that demand in 2040. As a result, based on current policies and regulations, energy-related carbon dioxide emissions are projected to increase by 46 percent between 2010 and 2040, with almost 70 percent of the increase coming from countries in developing Asia.

      Although coal demand in the United States is decreasing due to low natural gas prices from hydraulic fracturing and Obama administration regulatory policies against coal use, coal is still the second largest supplier of energy worldwide in the EIA forecasts. It is second only to petroleum. However, both petroleum liquids and coal lose some market share to natural gas, nuclear power and renewable energy between 2010 and 2040. Coal’s share declines slightly from 28 percent in 2010 to 27 percent in 2040. Petroleum liquids, including biofuels, capture 34 percent of the market in 2010, but its share declines to 28 percent in 2040. Natural gas increases its share by one percentage point as increasing supplies of tight gas, shale gas, and coalbed methane support growth in projected worldwide gas use.

    • Also check out the 8-K on 11/06/2013. It's an investor presentation and it addresses some of the coal plant retirements (slides 25 and 26).

    • They are building some coal to liquid plants.

    • I'm long both ACI for coal and the most undervalued sleeper in the NG space KWK. So either way I want to see prices increase. But there is no way NG will completely replace coal.

      Why not also develop clean coal scrubbers instead of just subsidizing solar and electric cars? Level playing field, but not until 2016.

    • The current ruling regime in the United States detests coal - hence, they will attempt to undermine and destroy it via any bureaucratic means (e.g., EPA) available to them. You need to take this into account when you consider any investment in coal.

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