WHY COAL INSTEAD OF OIL… because coal is so damn cheap…coal is 98% cheaper than crude oil for the same amount of heat generated. In other words crude oil is 45 TIMES more expensive than coal to produce the same amount of energy as measured by BTUs. Specifically, the production cost of Exxon's oil is about $3.16 per million British thermal units (BTU). Compare this to the cheap price of energy produced by Peabody Coal, which costs just 7 cents per million BTU. That's barely more than 2% of the value of oil for an equivalent number of BTUs! Therefore, it is an understatement to say COAL is grossly more economical compared with competing fuels like oil or natural gas, the latter's price per thermal unit similar to that of crude oil.
Furthermore, many US industries can use either oil or coal to provide the energy necessary to drive their machines. The vast Electrical Utilities industry is a perfect example. Consequently, when the rapidly rising price of oil makes it too expensive to economically fuel many industries, they switch over to CHEAP COAL…thus dramatically increasing the demand for coal. Correspondingly, the share price of coal miners, like PATRIOT COAL (PCX)…one of the largest coal producers in the US rapidly increases in value. Here's a perfect example: (more)
No comments:
Post a Comment