By Michael Riordan
from Crosscut.com

If you listen carefully, you might hear the sound of the “coal export bubble” popping. Coal prices are plummeting globally, and the bottom seems nowhere in sight. Early this month the price of benchmark Australian thermal coal fell below $77 per metric ton, down 46 percent from its 2011 peak.

In the heady days of two or three years ago, this benchmark price soared to nearly $142. U.S. companies trotted out ambitious proposals for six Northwest export terminals to ship Powder River Basin coal from Montana and Wyoming to Asia, where it could fetch these bloated prices. But as prices fell back to more realistic levels this past year, three of the projects were abandoned.

Similar coal mining and terminal plans are being shelved in Australia, where companies are slashing output and jobs. Ditto for Indonesia, which also depends on the Asian market for its coal exports.

Unfortunately for the coal industry, these plans assumed that coal prices would keep rising as they had until 2011, that China would continue to need more coal for its power plants than it could produce itself, and that its demand for imports would keep prices high for years.

(To read the full article, go to crosscut.com/2013/08/26/michael-riordan-coal-bubble-bursting)

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