“Total domestic coal distribution was an estimated 199.6 million short tons (mmst) in the 2nd Quarter 2012. This value is 24.5 mmst (i.e. 10.9 percent) lower than the 1st Quarter of 2012 and 31.7 mmst (i.e. 13.7 percent) lower than the 2nd Quarter of 2011 estimates.” ISA expects the third quarter number to be lower. Most importantly, the large majority is a baseline shift toward natural gas. EIA
U.S. coal industry would face decline even without Obama’s policies: “Between 59 and 77 gigawatts worth of coal capacity is set to retire by 2016 — between one-fifth and one-quarter of the country’s coal-fired plants. That’s even larger than earlier forecasts. But, the Brattle report notes, the recent uptick in retirements has largely been driven by market forces.” U.S. coal industry would face decline even without Obama’s policies at the Washington Post.
Potential Coal Plant Retirements: 2012 Update by Brattle.
Natural gas prices headed higher this winter at Financial Post.
US producers need $4-$5/MMBtu to trigger dry gas drilling: execs at Platts.
In short, the Marcellus is taking market share from everybody, including other dry gas basins and coal. This will continue. Analysis: Waking giant-Marcellus Shale bullies U.S. gas market at Reuters.
“Faced with 7 Bcf/d of new Marcellus production over the past couple of years and possibly another 10 Bcf/d of production growth coming from the Northeast region between now and 2017, the interstate pipeline companies that traditionally delivered natural gas to the Northeast from outside the region have found it necessary to completely o reconfigure their assets.” RBN Energy
Barclays: LNG seeing very slow growth so far in 2012 at the Oil & Gas Journal.
“Asia’s natural gas market is heading for an overhaul that threatens to upset long-held pricing systems and potentially lower prices in the region…Rising demand and more competition between suppliers has led to a jump in the number of deals being done on short- or medium-term contracts based on different pricing benchmarks rather than the 20-25 year fixed-price contracts based on oil prices that have been used for decades.” WSJ
FWIW, I initiated a UPL position yesterday. If the price moves lower I’ll be out and retry later; if the price moves higher I’ll add.
A complete spec natural gas name is GMX Resources (GMXR). Oil and Gas 360
As a reminder JJ Butler and family will be enjoying a kid friendly state park starting Thursday. Perhaps I’ll fit in a nice cigar too.