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Arch Coal Inc. Message Board

  • benstevens75 benstevens75 Jan 22, 2014 2:32 PM Flag

    If cost matters why buy CAPP and NAPP thermal?

     

    At one time in the US every coal basin was needed to produce enough coal for the US and exports. Since Obama has been in office so many coal fire plants have been torn down. At last count there were over 212 just on the east coast.

    Now why would you want to buy high price CAPP and NAPP when you can buy PRB or ILB coal? Let`s say NG gets to $5. Most old coal plants in the US were sit up for high sulfur coal and then because of EPA levels they started using low sulfur coal. Most of those old plants are a thing of the past. Those around today have scrubbers and most are close to the ILB . Yes you can get PRB coal but what is the cost to move it to the east coast? All these factors must be looked at and if cost is the driver in NG to coal switching then ILB will win out .
    Cost of coal is by BTU`s. Anthracite is about 15,000 BTU`s . Most is found in Pennsylvania where there are 7.3 billion tons. Bituminous coal is 10,500 to 15,500 BTU`s . Sub bituminous is 8300 to 13,000 and Lignite is 4000 to 8300 BTUs.

    CAPP is $64.52 a ton. NAPP is $68.50 a ton. ILB is $46.40 a ton and PRB is $12.07. Now if my coal plant has scrubbers and is the same distance from the ILB or a mine in the CAPP or NAPP why would I use their coal? You would use ILB coal because it has sulfur . It burns hotter and requires half as much coal as does CAPP and NAPP low sulfur coal. High sulfur coals which are bad for coke get up in that 15,500 range. On top of that there is a market for this sulfur and you also get synthetic Gypsum from the scrubbers which 40 percent of the sheetrock in the US comes from.

    Now if you are in the mid west closer to the PRB there is no way you are going to use high cost CAPP and NAPP coal when you can use PRB or ILB coal . Throw in cost from rail and Capp coal would be in the $80 range while PRB and ILB would be cheaper but if you have scrubbers that ILB coal is giving you 2 tons vs 1 ton of CAPP coal in value.

    ACI has most of it`s reserves in these Basins .

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    • I didn't know that about the sheetrock from the scrubbers. Very interesting.

    • Most of the power plants that have shut or will be shut down do not have scrubbers installed, they are very old units & of small megwatt output ... their owners can't justify the high cost to install scrubbers on a very old unit of limited capacity, it takes several megwatts to run the scrubber.

      Here is the problem ... the EPA is making it almost impossible to build clean modern power plants with extreme unnecessary regulations ... these old plants would have been replaced with new larger clean coal plants ... Nat Gas isn't the answer ... not enough pipe lines to get the gas to the work site & when Nat Gas load goes up, so will the price, making it to costly to burn.

 
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