Digging for Black Gold

While Americans have been transfixed by the spectacular rise in oil and natural gas prices and the fat profits of the oil giants, coal has quietly risen to prices not seen for nearly three decades. For miners who weathered massive layoffs and coal companies that long sat on losses as large as their vast stockpiles of mined coal, this could mean a sustained industry boom. For everybody else, particularly electricity-hungry consumers, the rise in coal prices could mean even higher energy prices on the horizon.

The price of coal for "spot," or immediate use, has doubled since 2002. Long-term contract prices are also on the rise. That means big profits for companies such as Peabody Energy Corp., which reported a 141% increase in third-quarter earnings. But their costs are also on the rise as they have had to dig farther into veins and grapple with transportation shortfalls. "The easiest, most technologically available, and best-quality coal is gone," says Brenda Pierce, U.S. Geological Survey energy program coordinator.

(2005-12-22 23:15:43 SGT) [Energy] Permalink

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