The Long Good-bye to Coal

This is an interesting article from Guy Chazan of the Financial Times (May 24, 2012) - - Shale gas boom leads to sharp drop in US carbon emission:

"The shale gas boom in the US has led to a big drop in the country's carbon emissions, as power generators switch from coal to cheap gas.

According to the International Energy Agency, US energy-related emissions of carbon dioxide, the main greenhouse gas, fell by 450m tonnes over the past five years - the largest drop among the countries surveyed.

Faith Birol, IEA chief economist, attributed the fall to improvements in fuel efficiency for transport and a "major shift" from coal to gas in power supply."

If you could "short" a state, your might think about shorting West Virginia.  Or maybe go "long" - - the article also pointed out that West Virginia supply still has a potential international demand:

"China's CO2 output increased 9.3 per cent last year, or by more than 700m tonnes.  India overtook Russia to become the world's fourth-largest CO2 producer, after China, the US and the EU."

The bottom line for coal and coal producing regions - - natural gas is fast becoming the fuel of choice for US energy in the past 12 months; coal-fired generation has slumped 19% while gas-fired usage has increased 38%, according to the US Department of Energy.  A gas-fired plant produces half the CO2 emissions of a coal-fired on.

A key issue to watch - - Royal Dutch Shell expects US natural gas prices to double by 2015, rebounding strongly from the current 10-year lows.  Look for LNG infrastructure to become a big deal - - with the US becoming a sizable exporter of LNG.

The Age of Coal has hit the twin walls of climate change concerns and the shale revolution.  The long-bye to coal has started.  We will be better off.