Please stop pissing in my wheaties. Pretty please.
There’s already some big ol’ mule muffins in there, courtesy of the DNC jackass...
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Seriously, as a retired engineer, this alternative/green energy codswallop really, REALLY gets me wound up. These hippies, greenies and others who keep touting this stuff in such large scale that it becomes a national policy have no flippin’ clue what they’re talking about, the details involved, or anything. As your buddy Phil is putting it - The One is taking on the job as the whale of whales in energy spec.
In short, this energy stuff just ain’t as easy as it looks. And since I am living in one of perhaps only three or four states in the nation where wind power could, conceivably, pencil out... (WY), and I’m watching these silly windmills go up at a rate of one or two a week in these wind farms... and then we see them seldom, if ever, brought online (because our wind either blows like a fury... or not at all...), these ideas in DC are just so much blather and BS.
So my question to you is this: Let’s assume that The One wants to kill coal - because he has said so. From your reading of the coal market, how low can coal go? Not “how low can coal go and be profitable” — I mean, on the futures markets, how low could coal be pushed from what you see in the markets?
Next question: How long can natural gas stay below, oh, $4/MMbtu from what you see in the market data?
Because both of those have a great deal to do with the state economy of WY, and I’m not feelin’ real good about the future economic prospects if coal *and* NG go downhill for extended periods. This has always been a boom/bust state, like all mining states, and the last five years were boom-boom times. Now I fear that in addition to a mere commodity/business cycle, we’re going to see the added machinations of DC really shaft us.
If the Kenyan thinks that the citizenry will sit still quietly while he takes action that doubles or trebles retail electricity rates, he's smoking some serious weed.
BTW, while there is a coal futures mkt, it is very low volume and has not yet gained acceptance by the miners and utilities. Perhaps it will one day (maybe very soon, to counter the uncertainty caused by Chu, Browner, and the Zero). Your Q about natgas, though, can be answered reasonably well. Demand has nose-dived from last summer, and somehow it did not recover even over the well-colder-than-average winter. Not sure why that is.
Gas utilities are WAY behind the curve on pricing at retail. It took almost 3 years for the local company, Laclede Gas, to reset rates in line with $8-9-10 natgas. Doubtless it will take longer than that to lower them -- they must be cleaning up right this minute.
So, to answer your 2nd Q, figure than we must see a demand recovery, which implies that Americans will have to start to return to their former, non-thrifty ways regarding heating and cooling. Further, this change will have to occur principally in the Northeast and Atlantic Seaboard.
The NG strip is saying that we go to/over $6.00/MMBTU in 2010, and stay there. So my answer will be: we can't stay under $4.00 for more than 7 months, absolute tops, and that assumes no GOM hurricanes and a average to below-average CDD summer. Conceivablly, events pending, we could be above $4.50 for good by July...but that's rather a longshot.
Hope that answered your Q reasonably well. I don't know all the engineering business regarding solar/wind power, but I do know that proponents NEVER mention that one has to have a fossil-fuel backup system in place, for times when the sun isn't shining and the wind isn't blowing.
And I wasn't pissing in anyone's Wheaties. Just reporting what I thought was a good article from a VERY knowledgeable player in the energy biz.
;^)