GLG News by Northern Appalachian Coal Experts

    The recent plunge in SO2 allowance prices may affect the decisions of coal-fired power plant owners.

    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...

    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 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...

    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...

    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.

    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.

    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.

    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.

    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...