# U.S. exporting coal to China: good or bad? **URL:** \ **Category:** Great Debates\ **Created:** [December 30, 2010, 12:33am UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765 "2010-12-30T00:33:05Z")\ **Posts on this page:** 17\ **Page:** 2
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [January 2, 2011, 7:13pm UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/21 "2011-01-02T19:13:33Z")
> [@emacknight](#): > > Wait, the US is exporting to China? Where is \*\*Le Jacquelope \*\* to stop this? You do realize this means Americans are stealing Chinese jobs! Clearly China should put in tariffs to raise the price of coal, and then something happens, and then everyone’s wages go up. It’s perfect. Those higher wages will cause factories will move back to the US, and then all our wages will go up. > > Economics is fun. Actually, since you’ve been so thoroughly buggered by me that you had to bring my name up in a completely off-topic manner (which is clearly a violation of the no flaming people rule on here but I’m sure the moderators favor you so this won’t catch their attention), I will point out just how tragically uninformed you are. AGAIN. Exporting coal to China and taking Chinese jobs is what I’d call _payback_. My problem with it is 1) that it doesn’t go far enough to even the score; and 2) we’re only helping to poison the world’s skies, although the alternative, that being Chinese coal, is even worse. Frankly I’m surprised you didn’t take the approach that America is poorer because we’re engaging in coal mining and we should instead be hiring cheap foreign labor to mine coal while putting American miners in the unemployment line so they can be reallocated into the “knowledge economy”. You should be out there telling them that the more Americans we put out of work the cheaper the coal is that we export and the more the economy grows! Ain’t economics fun! :rolleyes: ---
**Author:** ![Una\_Persson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/una_persson/32/346_2.png) [@Una\_Persson](https://boards.straightdope.com/u/Una_Persson)\ **Post date:** [January 3, 2011, 3:57am UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/22 "2011-01-03T03:57:22Z")
> [@Try2B\_Comprehensive](#): > > Sounds like you’re just taking another swipe at unions here, **Una**. What the hell? No, really, what the hell? Anyone able to explain this statement to me? > [@](#): > > You are surely aware that Wyoming coal is dramatically cheaper than, say, Virginia coal, [see here](http://www.eia.doe.gov/cneaf/coal/page/acr/table28.html). This is an example of where Google is not your friend. Coal isn’t magically transported from Wyoming to the 99% of coal power plants which aren’t located in Wyoming. It’s shipped by rail, under a pseudo-monopoly situation where many power plants have only one, single rail line to supply them, meaning according to the old Surface Transportation Board, the railroad can charge “whatever the market will bear.” So the cost of coal at the mine may be significant, or may be relatively insignificant compared to the transportation cost. So PRB coal may be $8, $6, or even $4 per ton in some cases. Big deal - a plant in Nebraska might pay $10 per ton on top of that for transport, and one in Virginia $90 per ton on top of it. Plants located within sight of each other can pay a differential cost of $20 per ton due to whatever Satanic rail contract they may or may not have. I know a lot about this because I used to be used as the “hammer” to negotiate a better rail contract for a power plant. > [@](#): > > That aside, I think there was a discussion about exporting coking coal a while back ($200 per ton?). Are there special barriers to this practice? (eg: is it treated as something like a strategic resource?) China will surely be keen to acquire more of this from whatever source they can. I don’t understand what you mean. Special barriers? ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [January 3, 2011, 12:31pm UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/23 "2011-01-03T12:31:00Z")
[Another reason](http://gulfnews.com/business/markets/chinese-economy-to-be-fired-by-coal-to-chemicals-1.739968) China wants ever more coal: > [@](#): > > Coal to chemicals uses coal as raw material instead of crude oil, and requires new-generation technology to turn it into gas, liquids, solid fuels and other chemical products. > The latest developments in China have seen the production of coal-to-liquids, coal-to-dimethyl ether, coal-to-olefins and coal to SNG throughout 2010. > The Chinese coal chemical industry has a massive head-start. It is backed by intense government interest, laps up new generation technology from Western multinationals and promotes an entirely new usage pattern for coal. > The rising price of crude oil has rendered coal a favourite alternative to polyolefins, which is in short supply in China. FWIW. I read asking about “special barriers” as asking if coke for steel is handled by the US something like China handles rare earths or say how the US has handled certain high technology exports. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [January 3, 2011, 3:28pm UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/24 "2011-01-03T15:28:24Z")
> [@Una\_Persson](#): > > What the hell? No, really, what the hell? Anyone able to explain this statement to me? I don’t want to derail. Some of your other posts have suggested that you are no friend of unions, and negative comments about them seem to occur often in your writing. The relevance is that, for me anyway, the impression is a switch from ‘Just the facts **Una** ’ to ‘Get them unions **Una**.’ I’m not sure if you’re personal or professional when the topic turns to unions. Explained, let’s drop it. > [@](#): > > This is an example of where Google is not your friend. I supplement Google with the 'dope. Thanks for your answer. My take on exporting coal to China takes a different tack, and may ultimately boil down to an ignorant outsider’s view. Meh, education through debunking in that case. What is my point? Consider [from here](http://www.harpers.org/archive/2011/01/page/0013): > [@](#): > > Number of offshore oil and gas leases approved by the federal government since 2005: 4,603 > Number of offshore wind projects approved since then: 1 Coal isn’t the only resource the US has in abundance. Few if any countries can match our potential for wind power generation- if only the projects could be developed. If they gain the same acceptance as offshore oil and gas for instance, we could displace a very significant amount of coal for export. Yes, it might take new rails and I’m not sure how dirty is dirty when we’re talking about coal terminals. I do know there is a multi-billion dollar export market here. > [@](#): > > I don’t understand what you mean. Special barriers? What **DSseid** said. Or, is it just not available in export quantities? Or… some other reason we don’t export it which I can’t guess. ---
**Author:** ![Una\_Persson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/una_persson/32/346_2.png) [@Una\_Persson](https://boards.straightdope.com/u/Una_Persson)\ **Post date:** [January 3, 2011, 5:58pm UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/25 "2011-01-03T17:58:59Z")
> [@Try2B\_Comprehensive](#): > > I don’t want to derail. Some of your other posts have suggested that you are no friend of unions, and negative comments about them seem to occur often in your writing. The relevance is that, for me anyway, the impression is a switch from ‘Just the facts **Una** ’ to ‘Get them unions **Una**.’ I’m not sure if you’re personal or professional when the topic turns to unions. Explained, let’s drop it. The dispute in question was with local union mines. That’s a **fact.** It’s pertinent because they couldn’t just switch to another mine to get their coal, the union was organizing a protest which hit most of the large mines in the region. Thus necessitating looking for alternate sources of coal elsewhere. Saying they were “union” was exactly as pertinent to the discussion as saying they were “mines” which produced “coal,” as it was the “union” action which prevented cheap local access to “coal.” In that case I didn’t give a rat’s ass about the union; on the contrary, if they had not decided to take action against the company, I wouldn’t have got a juicy $100,000+ consulting project. > [@](#): > > What **DSseid** said. Or, is it just not available in export quantities? Or… some other reason we don’t export it which I can’t guess. IIRC much of the coking coal in the US is mined in Pennsylvania, West Virginia, and Virginia. Wyoming and Montana PRB coal, as well as Illinois, Interior, San Juan and Uinta Basin, High Plains and Gulf Lignite, etc. coal, is not generally suitable for coking. Thus most coking coal in quantity would have to be shipped across the continent before it could even be transloaded onto ship. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [January 3, 2011, 6:55pm UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/26 "2011-01-03T18:55:13Z")
> [@BrainGlutton](#): > > Then why do they want coal? Because coal is cheaper. The start up (and wind down) cost of cnuclear power is immense and the operating costs are similar to coal power, which has relatively cheap startup costs. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [January 3, 2011, 6:58pm UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/27 "2011-01-03T18:58:34Z")
> [@emacknight](#): > > Wait, the US is exporting to China? Where is \*\*Le Jacquelope \*\* to stop this? You do realize this means Americans are stealing Chinese jobs! Clearly China should put in tariffs to raise the price of coal, and then something happens, and then everyone’s wages go up. It’s perfect. Those higher wages will cause factories will move back to the US, and then all our wages will go up. > > Economics is fun. Exporting natural resources is not quite the same thing as as a manufacturing industry. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [January 3, 2011, 9:51pm UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/28 "2011-01-03T21:51:21Z")
> [@Una\_Persson](#): > > … IIRC much of the coking coal in the US is mined in Pennsylvania, West Virginia, and Virginia. Wyoming and Montana PRB coal, as well as Illinois, Interior, San Juan and Uinta Basin, High Plains and Gulf Lignite, etc. coal, is not generally suitable for coking. Thus most coking coal in quantity would have to be shipped across the continent before it could even be transloaded onto ship. And yet they may still [consider buying it](http://www.suite101.com/content/global-steelmakers-and-miners-race-for-coking-coal-reserves-a327283). > [@](#): > > China leads the world in coal consumption. Its coal usage soared 45% in the five years through 2009. The World Steel Association forecasts that steel demand in China will increase to 74 m tonnes in 2011, an 6.8% increase from 2010. Despite its large national reserves, an increasingly industrialized China has also seen growth in its coking coal imports as it aims to supply its steel industry demands. … > > … More than half of the global exports for hard coking coal is supplied by Australia. Australia’s coking coal transport logistic delays due to Queensland state’s flooding are anticipated to be costly to its export industry. By year’s end 2010, both Anglo American and Rio Tinto had declared force majeure clauses, joining a number of the other global coking coal miners operating out of Australia unable to deliver under mining contract requirements due to the torrential floods. Tropical cyclone threats off the Northwest coast of Australia also halted Australia’s offshore oil drilling production on 01/01/11. > > Canada and U.S.-based coking coal mining exporters may see increased demand as coking coal 2Q 2011 contract pricing is anticipated to increase on Australia’s mining productions. The stock of Canada-based Teck Resources – the world’s second largest coking coal exporter – and Grande Cache Coal saw significant stock increases on reports of the floods. > > Supported by increased Chinese demand, the U.S.'s 2010 mining industry climbed approximately 35%, according to Investor’s Business Daily writer Donald H. Gold (“China Relies On Coal, And Producers Thrive,” [Investor.com](http://Investor.com), 12/31/2010). In 2011, it is anticipated that U.S. miners will continue to see demand increases. Some of this [followed](http://www.businessweek.com/news/2010-03-23/china-coking-coal-imports-may-near-record-this-year-teck-says.html) after China “started closing mines in 2008 to improve the industry’s safety record after 3,770 workers were killed in 2007, making the mines the world’s deadliest.” ---
**Author:** ![Giles](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/giles/32/60_2.png) [@Giles](https://boards.straightdope.com/u/Giles)\ **Post date:** [January 3, 2011, 11:32pm UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/29 "2011-01-03T23:32:04Z")
Yes, the floods would have caused problems to the coal supply chain (mines, rail/road, and ports) in Queensland, but the largest coal-exporting port in the world – [Newcastle](http://www.flickr.com/photos/75905404@N00/317846755/) – would not have been affected. Note, however, that China is not the main market for Australian coal: Japan and South Korea are. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [January 4, 2011, 3:40am UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/30 "2011-01-04T03:40:01Z")
> [@Una\_Persson](#): > > it was the “union” action which prevented cheap local access to “coal.” Because the coal miners insisted on being paid. I get it :rolleyes: > [@](#): > > The dispute in question was with local union mines. That’s a **fact**. It’s pertinent because they couldn’t just switch to another mine to get their coal, the union was organizing a protest which hit most of the large mines in the region. Thus necessitating looking for alternate sources of coal elsewhere. Yes, that and the rest of your cites, but I thought I detected animus too. Maybe that is where I am wrong. Does the US government have an interest in retarding the development of China’s rail system? ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [January 4, 2011, 7:57am UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/31 "2011-01-04T07:57:41Z")
> [@Damuri\_Ajashi](#): > > Exporting natural resources is not quite the same thing as as a manufacturing industry. And that’s just one of several mistakes he made in that post. ---
**Author:** ![Una\_Persson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/una_persson/32/346_2.png) [@Una\_Persson](https://boards.straightdope.com/u/Una_Persson)\ **Post date:** [January 4, 2011, 6:05pm UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/32 "2011-01-04T18:05:39Z")
> [@Try2B\_Comprehensive](#): > > Because the coal miners insisted on being paid. I get it :rolleyes: Well that’s a strawman argument since no one, anywhere, said coal miners should work for free. I don’t know why you’re being a hammer, but I’m not anyone’s nail. My participation in this thread is over. ---
**Author:** ![Frank](https://avatars.discourse-cdn.com/v4/letter/f/3d9bf3/32.png) [@Frank](https://boards.straightdope.com/u/Frank)\ **Post date:** [January 4, 2011, 9:21pm UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/33 "2011-01-04T21:21:43Z")
> [@Una\_Persson](#): > > I…well, the best way to put it is, I have no citations or additional evidence to offer at this time, but I disagree. I’ve seen so many proposals for shipping PRB coal large-scale on the West coast fail that I just have a hard time seeing it ever happening. There’s only been limited success shipping via the eastern routes and the volume is highly limited. There is also a serious concern about the US EPA requiring covered coal cars “soon” (due to the high propensity of PRB coal to dust), which will slow down the absolutely astonishing turnaround rate in the PRB on the BNSF and UP lines right now. A covered car mandate could cut capacity down by anywhere from 10% to 25% (I suspect it’s much closer to 10%) and building new main rail lines to the west will be problematic due to environmental concerns. You make good points. My company has certainly looked at exporting to Asia before, and didn’t follow through because market conditions changed. Certainly regulatory and environmental issues need to be considered. I don’t believe that those points outweigh mine, though, which is that the demand for coal is growing by leaps and bounds worldwide, and will continue to do so for at least the next two or three decades. I believe that the price of coal is going to reach and hold at a level that makes export (even with increased transportation and mitigation costs) profitable. This time. 🙂 I could be wrong; we’ll see. ---
**Author:** ![Frank](https://avatars.discourse-cdn.com/v4/letter/f/3d9bf3/32.png) [@Frank](https://boards.straightdope.com/u/Frank)\ **Post date:** [January 4, 2011, 9:24pm UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/34 "2011-01-04T21:24:47Z")
> [@Try2B\_Comprehensive](#): > > I don’t want to derail. Then please don’t. I don’t see how **Una** ’s stance on unions, whatever it may be, is relevant to the subject of this thread. ETA: Too late, I see. Already derailed. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [January 5, 2011, 4:49am UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/35 "2011-01-05T04:49:37Z")
> [@Frank](#): > > Then please don’t. I don’t see how **Una** ’s stance on unions, whatever it may be, is relevant to the subject of this thread. > > ETA: Too late, I see. Already derailed. Sorry, **Frank**. Really. The main point is that unions are a major factor in why the death rate of coal miners in America is ~1% that of China, and hence a big part of why this opportunity exists at all. More explanation on the particular relevance would probably just make things worse. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [January 5, 2011, 4:57am UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/36 "2011-01-05T04:57:45Z")
> [@Una\_Persson](#): > > Well that’s a strawman argument since no one, anywhere, said coal miners should work for free. Not what I meant. > [@](#): > > I don’t know why you’re being a hammer, but I’m not anyone’s nail. My participation in this thread is over. Without a yes/no on the animus question? Dodgy. Not trying to piss you off FWIW. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [January 5, 2011, 5:04am UTC](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765/37 "2011-01-05T05:04:51Z")
> [@Giles](#): > > Yes, the floods would have caused problems to the coal supply chain (mines, rail/road, and ports) in Queensland, but the largest coal-exporting port in the world – [Newcastle](http://www.flickr.com/photos/75905404@N00/317846755/) – would not have been affected. Note, however, that China is not the main market for Australian coal: Japan and South Korea are. Still, it has its [effects.](http://www.theglobeandmail.com/report-on-business/coal-prices-expected-to-rise-on-australias-flood-waters/article1857762/) But maybe not China too bad. > [@](#): > > Rising coal prices are set to spike at least 20 per cent higher because of supply shortages due to severe flooding in Australia, adding cost pressures to the steel industry that could ripple widely through the economy. … Australia supplies about half of the metallurgical coal used in steel making. … In China, the world’s largest maker of steel, mills had comfortable inventory levels after building up supplies in November and December, according to local raw materials traders cited by Reuters. [Previous page](https://boards.straightdope.com/t/u-s-exporting-coal-to-china-good-or-bad/565765.md?page=1)