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Sierra Daily

Apr 19, 2012

Fossil Fuels Are Cheap

NPR's All Things Considered had a cheery story the other day, "As Gasoline Goes Up, Natural Gas Cheaper Than Ever." The idea is that thanks to the miracle of fracking ("new ways of extracting natural gas out of the ground") gas prices are dropping, making possible cheaper cookies and lawnmowers and much, much more:

There are all kinds of possibilities - natural gas cars and trucks, or even more likely the U.S. maybe could become the Saudi Arabia of natural gas, exporting it around the world.

Sounds awesome! As long as you ignore the climate change part. And here's more rosy economic news via Reuters: "U.S. coal exports to China may double in 2012." The reason? Cheap freight rates and "a fall in domestic demand in the United States." (Take a bow, Beyond Coal!) 

"Exports to China could reach over 12 million tonnes this year based on the annualized numbers," [coal exporter Xcoal] Chief Executive Ernie Thrasher told Reuters in an interview on Wednesday. "I think there is enough demand in Asia to absorb enough U.S. cargoes to stem a decline in prices."

And why are coal prices declining?

Although still the largest single fuel for electricity generation, coal's share of monthly generation in the United States dropped below 40 percent in November and December 2011, a level not seen since 1978, data from the U.S. Energy Information Administration (EIA) showed.

The EIA forecasts coal demand by the power sector to fall by nearly five percent this year to 884 million short tons, the lowest level since 1995 as the fuel continues to be forced out by the flood of cheap gas following the shale gas boom.

Sounds awesome! As long as you ignore the climate change part. And finally, the Wall Street Journal reports that "Gas Futures Point to Pump Relief."

After a sizzling start to the year, gasoline futures prices are sliding, easing pressures on drivers and the U.S. economy and raising the prospect that prices at the pump could be headed lower still.

Gasoline futures, a key yardstick for wholesale prices, are down 6.3% from their high for the year reached on March 26, as the price of crude oil that gets refined into gasoline has dropped a similar amount amid easing tension over Iran, the world's fourth-largest oil producer.

Sounds awesome! As long as you ignore the climate change part. Which, conveniently, nearly everyone is happy to do. Without some kind of price on carbon, this is what you get.

HS_PaulRauberPAUL RAUBER is a senior editor at Sierra. He is the author, with Carl Pope, of the happily outdated Strategic Ignorance: Why the Bush Administration Is Recklessly Destroying a Century of Environmental Progress. Otherwise he is a cyclist, cook, and father of two. Follow him on Twitter @paulrauber.

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