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China's power plants running out of coal
Yahoo News ^ | 05.20.08, 3:06 PM ET | JOE McDONALD

Posted on 05/20/2008 8:11:40 PM PDT by Fred

Chinese power plants are running out of coal, with less than a three-day supply in some areas, the government said Tuesday, adding to China's logistical headaches following a devastating earthquake.

It is the second time in three months that Chinese power plants have run short of coal, an unintended effect of government-mandated price controls - a throwback to communist central planning - to shield the public from rising global energy costs.

Some 32 power plants have already shut down due to lack of fuel, the State Electricity Regulatory Commission said in a report. It said two were in Sichuan province, where last week's magnitude 7.9 quake damaged the power supply grid.

In February, freak snowstorms caught power plants without adequate coal supplies, causing blackouts and factory shutdowns in a country that relies on coal for 70 percent of its electricity.

Utility companies have let coal stocks dwindle and are buying less fuel after Beijing froze power prices last year, while allowing the market-set costs producers pay to rise.

The SERC gave no indication as to how Beijing might respond to new shortages. An employee who answered the phone in its press office referred questions to the Cabinet's National Development and Reform Commission. The NDRC did not respond to requests for comment.

The government created an agency this year to oversee energy policy, but it has yet to take any action.

Beijing has also frozen retail prices of gasoline and diesel. That helped farmers and the urban poor, but it has spurred sales of gas-guzzling luxury cars and propelled double-digit annual growth in fuel consumption.

Oil refiners say they are suffering heavy losses and some began cutting production last year, causing fuel shortages in parts of China's south.

Industry observers have pointed to especially strong demand for diesel, as some of the stricken areas in China now rely on generators for power.

Analysts use the price of heating oil futures to track the cost of diesel, which is chemically similar. This week, the cost of heating oil for June delivery surged to record highs, helping propel gasoline and possibly even oil futures higher, analysts say.

After rising all month, the price of heating oil rose another 14 cents per gallon to $3.6989 on the day after the quake.

"It's turning into a more defined demand for diesel fuel ahead of the Olympics," said Jim Ritterbusch, president of oil trading advisory firm Ritterbusch & Associates in Galena, Ill. "They appear to stockpiling."

Power plants in the eastern province of Anhui have less than a three-day supply of coal, while those in Beijing have about a week supply, the electricity agency said. The recommended minimum is 15 days; a seven-day supply is considered dangerously low.

In Sichuan province, where the May 12 quake killed tens of thousands of people, power plants have only a seven-day supply of coal, according to the agency. It said two plants have none.

The quake's effect on coal supply was not addressed in the report, but the NDRC says 200 coal mines in Sichuan were closed for inspection after the disaster.

China's power use is growing at double-digit annual rates, driven by a boom that saw the economy expand by 10.6 percent in the first quarter of this year.

On Tuesday, a U.S. official urged Beijing to join the International Energy Agency - a group of major oil consumers that includes the United States and European governments - and aid its efforts to keep petroleum markets stable in times of crisis.

"I believe it is important for China and other key economies in the world, such as India, to prepare to eventually join the IEA as full members," Daniel S. Sullivan, an assistant U.S. secretary of state, said at a business conference.

China's surging energy demand, and its potential impact on prices, has stirred unease abroad as state companies scour Africa, Central Asia and elsewhere for more.

The 27-nation IEA coordinates the release of petroleum from national stockpiles to stabilize prices if crises threaten to disrupt supplies, Sullivan said. He said that was last done in 2005 after Hurricane Katrina in the United States.

Sullivan, who is the U.S. envoy to the Paris-based IEA, said Beijing was invited to take part in an emergency response exercise next month. He urged the government to accept.

The Chinese Foreign Ministry referred questions about whether Beijing might join the IEA to the NDRC, which did not immediately respond to requests for comment.


TOPICS: Business/Economy; Politics/Elections
KEYWORDS: china; coal; energy
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1 posted on 05/20/2008 8:11:42 PM PDT by Fred
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To: Fred

We have lots of coal, don’t we?


2 posted on 05/20/2008 8:14:31 PM PDT by JPJones (Cry havoc and let loose the Freepers!)
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To: JPJones
Utility companies have let coal stocks dwindle and are buying less fuel after Beijing froze power prices last year, while allowing the market-set costs producers pay to rise. Sounds exactly like CA during the Davis era power crisis.
3 posted on 05/20/2008 8:18:48 PM PDT by C19fan
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To: Fred
Power plants in the eastern province of Anhui have less than a three-day supply of coal, while those in Beijing have about a week supply, the electricity agency said. The recommended minimum is 15 days; a seven-day supply is considered dangerously low.

For contrast, I believe American coal-fired power plants typically keep a 90-day supply.

4 posted on 05/20/2008 8:23:52 PM PDT by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: Fred

Get ready for more energy commodity spikes, which will, of course, be blamed by the RATS and an uninformed public, on those greedy “Big Oil” companies.


5 posted on 05/20/2008 8:23:58 PM PDT by BOBTHENAILER (One by one, in small groups or in whole armies, we don't care how we do it, but we're gonna getcha)
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To: Fred

Pelosi needs to read this.


6 posted on 05/20/2008 8:24:06 PM PDT by Retired Chemist
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To: JPJones
We have lots of coal, don’t we?

In Utah. Ask Slick Willie about that. And his friend James Riady.

7 posted on 05/20/2008 8:29:08 PM PDT by ChildOfThe60s (If you can remember the 60s........you weren't really there)
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To: JPJones
We have lots of coal, don’t we?

Plenty. But we're not allowed to extract it.

8 posted on 05/20/2008 8:34:27 PM PDT by null and void (The one word of Chinese our congress really understands is 'kowtow')
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To: Fred
What we should do here in the United States is go back to nuclear power in a big way. We use nuclear power to send our submarines and aircraft carriers hurtling through the oceans of the world. Why not have nuclear power plants here at home lighting up our cities and powering our economy?

Damn the no-nukes people with their scrubby beards, their stinky sandals and their Jackson Browne T-shirts. We should have 7,000 nuclear plants online by now and if we did, we wouldn't be worried too much about those smelly people over in the Middle East with their camels and women shrouded in black cloth.

And just what was the big deal with Three-Mile Island? A little leak and pretty much nobody died. How many people have died since in gasoline related explosions? A lot, I can tell you that.

There is no doubt that if we continue on our course with nuclear power, we would have made it safer and there wouldn't even be minor accidents like Three Mile Island.

We could be energy independent today if we continued to pursue nuclear power. But no! We had to give in to the radicals who threatened to stage more Jackson Browne rock concerts if we didn't pull the plug on nuclear energy now. Well, I would have gladly tolerated the shrill voice of Jackson Browne in exchange for more nuclear power plants and if we had done that, we wouldn't be "Running On Empty" today if you know what I mean.

9 posted on 05/20/2008 8:35:13 PM PDT by SamAdams76 (I am 4 days away from outliving Goose Tatum)
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To: Fred

In a perfect world we’d be trading coal for oil at bargain basement prices. But no, we’ll give it to them for practically nothing and still be screwed tomorrow.

Fear not. We’re from the government. We’re here to help.


10 posted on 05/20/2008 8:41:29 PM PDT by TheZMan (Bitter backwoods east Texan Christian gun clinger with the AC at 72 degrees.)
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To: SamAdams76

Good Post SamAdams! Pretty well sums it up.
_____________________________
What we should do here in the United States is go back to nuclear power in a big way. We use nuclear power to send our submarines and aircraft carriers hurtling through the oceans of the world. Why not have nuclear power plants here at home lighting up our cities and powering our economy?
Damn the no-nukes people with their scrubby beards, their stinky sandals and their Jackson Browne T-shirts. We should have 7,000 nuclear plants online by now and if we did, we wouldn’t be worried too much about those smelly people over in the Middle East with their camels and women shrouded in black cloth.

And just what was the big deal with Three-Mile Island? A little leak and pretty much nobody died. How many people have died since in gasoline related explosions? A lot, I can tell you that.

There is no doubt that if we continue on our course with nuclear power, we would have made it safer and there wouldn’t even be minor accidents like Three Mile Island.

We could be energy independent today if we continued to pursue nuclear power. But no! We had to give in to the radicals who threatened to stage more Jackson Browne rock concerts if we didn’t pull the plug on nuclear energy now. Well, I would have gladly tolerated the shrill voice of Jackson Browne in exchange for more nuclear power plants and if we had done that, we wouldn’t be “Running On Empty” today if you know what I mean.


11 posted on 05/20/2008 8:43:45 PM PDT by cowdog77 (Circle the Wagons)
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To: C19fan
Sounds exactly like CA during the Davis era power crisis.

Exactly the same.

Lather, rinse, repeat.
12 posted on 05/20/2008 8:46:53 PM PDT by SFConservative
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To: Fred

bookmark


13 posted on 05/20/2008 8:54:14 PM PDT by traviskicks (http://www.neoperspectives.com/Ron_Paul_2008.htm)
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To: JPJones

We have more coal than the Middle East has oil. But alas, we aren’t able to touch it.


14 posted on 05/20/2008 8:57:07 PM PDT by Extremely Extreme Extremist (Bipartisanship: Two wolves and the American people deciding what's for dinner)
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To: JPJones
We have lots of coal, don’t we?

That's what I first thought. We could wipe out our trade deficit with China almost overnight.
15 posted on 05/20/2008 8:59:50 PM PDT by rottndog (Globull Warming "Science" = garbage in, gospel out.)
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To: ChildOfThe60s

I dont think so


16 posted on 05/20/2008 9:00:33 PM PDT by Fvuk
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To: Fred; All

What became of the huge hydroelectric dam that China was building?


17 posted on 05/20/2008 9:08:38 PM PDT by Amendment10
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To: SamAdams76
... Three-Mile Island? A little leak and pretty much nobody died.

Nobody died. As the old saying goes, "In the USA, fewer people have died in nuclear power plant accidents than in Ted Kennedy's car."

You look at accidents in the coal and petroleum industries, and there is no doubt that nuclear is safer, even per unit energy produced.

Thank the China Syndrome movie and Chernobyl for irrational fear of nuclear power. The Chernobyl type reactor was an irresponsible design never used outside the Soviet bloc. We know how to design safe plants and protect their perimeter.

I once heard Edward Teller give a lecture on nuclear power safety. He said that a man standing at the perimeter of a nuclear plant gets only marginally higher radiation exposure from the plant than he gets from sleeping with a woman (due to the decay of the radioactive potassium naturally occurring in her body). He added that he would caution against sleeping with two women, however.

18 posted on 05/20/2008 9:08:58 PM PDT by SFConservative
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To: rottndog; JPJones
We have lots of coal, don’t we?

That's what I first thought. We could wipe out our trade deficit with China almost overnight.

What on earth would we want to do something that stupid for? I will point out to you that Not shipping fuel to China could wipe out our trade deficit with China almost overnight...much more cheaply.

19 posted on 05/20/2008 9:10:59 PM PDT by MrEdd (Heck? Geewhiz Cripes, thats the place where people who don't believe in Gosh think they aint going.)
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To: SFConservative
He added that he would caution against sleeping with two women, however.

I agree with that advice. Especially if the wrong woman wakes up first.

20 posted on 05/20/2008 9:12:58 PM PDT by SamAdams76 (I am 4 days away from outliving Goose Tatum)
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