THE REAL CAUSE OF INFLATION
Senator Joe Manchin boasts the ‘coal market has never been hotter’
Graig GraziosiTue., November 16, 2021
Democratic Senator Joe Manchin boasted about the price of coal in West Virginia during a hearing on energy prices Tuesday.
"I can tell you, the coal market in West Virginia has never been hotter," Mr Manchin said.
Mr Manchin's wealth is built on coal companies. He owns holdings valued between $1m and $5m in Enersystems, Inc, a coal brokerage firm that he founded. Last year he made $491,000 from his holdings at the company, which doubles his annual Senate salary.
Social media users were predictably unimpressed by the senator's boasting, pointing out his closeness to the industry and the fact that outside of supply chain issues causing a natural gas shortage as winter approaches, the world is still battling to get a handle on the climate crisis, which is only worsened by coal burning
Coal prices have leapt to their highest levels in 12 years as power suppliers opt for the pollution-heavy fossil fuel instead of natural gas, which has doubled in cost due to supply chain disruptions. Though coal has seen a momentary revival, it is likely to be temporary.
Along with Senator Kyrsten Sinema, Mr Manchin has faced waves of criticism for constantly undermining Democratic policy goals, particularly in the case of federal spending or reforming the filibuster to advance President Joe Biden’s agenda.
Craig Holman, a lobbyist for left-leaning watchdog group Public Citizen, told CNN that Mr Manchin is a "walking conflict of interest”.
"And what makes it all the more troubling is that he's the 50th Democratic senator, which gives him enormous sway over climate change policy," he said.
Mr Manchin has already vowed that he will not support any bills that threaten the oil and natural gas industries, which puts him at odds with Mr Biden's promise during the Glasgow climate summit to cut methane emissions by 30 per cent over the next nine years.
Mr Biden hopes to achieve the cut by raising taxes on methane, but Mr Manchin could thwart the plan, which experts warn could undermine Mr Biden's credibility as a climate leader in the eyes of other heads of state.
“Allies are wondering about America’s global leadership when presidents make promises but aren’t able to carry them out. It casts doubts on US governance and the ability to deliver on pledges,” Darrell West, vice president of governance studies at the Brookings Institution, told The Hill.
Mr Manchin has maintained that he has “been in full compliance with Senate ethics and financial disclosure rules,” and that he will continue “to work to find a path forward on important climate legislation that maintains American leadership in energy innovation and critical energy reliability.”
Bloomberg News | November 15, 2021 |
Stock image.
U.S. coal prices surged to the highest in more than 12 years, threatening to bloat America’s already soaring electricity bills and signaling the dirty fuel isn’t get phased out anytime soon.
Prices for coal from Central Appalachia climbed more than $10 last week to $89.75 a ton on the spot market, according to figures released Monday from S&P Global Market Intelligence. That’s the highest since 2009, when a spike in exports boosted domestic prices for the power-plant fuel. Prices in other U.S. regions are lower but have also climbed in recent months.
Higher prices for coal — which comes as natural gas gets costlier, too — means U.S. consumers will almost certainly pay more for energy this winter. Companies including Duke Energy Corp. and Xcel Energy Inc. have been warning customers that winter bills may increase by about $11 a month during heating season. That added expense comes on top of already soaring costs for food, housing and cars in the U.S., driving consumer-price inflation to the fastest annual pace since 1990 and stretching households’ budgets increasingly thin.
The surging coal prices come as a global power crisis drives up demand for the dirtiest fossil fuel that some had prematurely assumed was on a rapid glide-path to extinction in the U.S. With energy demand surging, efforts to reach a deal to completely quit coal’s use failed at the COP26 international climate conference that just ended. Delegates instead pledged to “phase down” rather than “phase out” coal power.
Coal generates more than one-third of the world’s electricity, and countries including China and India depend on it for cheap, reliable power.
The economic recovery from the coronavirus pandemic has driven up demand for electricity around the world, leading to fuel shortfalls. While there’s widespread agreement among climate negotiators that eliminating coal from the global power mix is critical to avert climate disaster, the immediate need to keep factories humming shows that short-term demands are taking precedence over long-term goals.
U.S. miners are struggling to ramp up coal production as American utilities burn more, leading to dwindling stockpiles and rising prices. U.S. miners say demand is going to remain strong through next year, and some already have contracts to sell almost all of their expected output for 2022.
“The reason spot prices are so high in the U.S. is because there’s no supply, no availability,” said Andrew Cosgrove, a mining analyst for Bloomberg Intelligence.
Prices will probably come down over the next few months but won’t return to where they were at the start of the year, Cosgrove said, noting that he expects utilities to sign long-term contracts for the next few years that are about 30% higher than in recent years. Natural gas prices will stay high and so will demand for coal, but miners have limited ability to expand production and none are expected to invest in new capacity.
“There are no extra tons,” he said.
(By Will Wade)
U.S. coal prices surged to the highest in more than 12 years, threatening to bloat America’s already soaring electricity bills and signaling the dirty fuel isn’t get phased out anytime soon.
Prices for coal from Central Appalachia climbed more than $10 last week to $89.75 a ton on the spot market, according to figures released Monday from S&P Global Market Intelligence. That’s the highest since 2009, when a spike in exports boosted domestic prices for the power-plant fuel. Prices in other U.S. regions are lower but have also climbed in recent months.
Higher prices for coal — which comes as natural gas gets costlier, too — means U.S. consumers will almost certainly pay more for energy this winter. Companies including Duke Energy Corp. and Xcel Energy Inc. have been warning customers that winter bills may increase by about $11 a month during heating season. That added expense comes on top of already soaring costs for food, housing and cars in the U.S., driving consumer-price inflation to the fastest annual pace since 1990 and stretching households’ budgets increasingly thin.
The surging coal prices come as a global power crisis drives up demand for the dirtiest fossil fuel that some had prematurely assumed was on a rapid glide-path to extinction in the U.S. With energy demand surging, efforts to reach a deal to completely quit coal’s use failed at the COP26 international climate conference that just ended. Delegates instead pledged to “phase down” rather than “phase out” coal power.
Coal generates more than one-third of the world’s electricity, and countries including China and India depend on it for cheap, reliable power.
The economic recovery from the coronavirus pandemic has driven up demand for electricity around the world, leading to fuel shortfalls. While there’s widespread agreement among climate negotiators that eliminating coal from the global power mix is critical to avert climate disaster, the immediate need to keep factories humming shows that short-term demands are taking precedence over long-term goals.
U.S. miners are struggling to ramp up coal production as American utilities burn more, leading to dwindling stockpiles and rising prices. U.S. miners say demand is going to remain strong through next year, and some already have contracts to sell almost all of their expected output for 2022.
“The reason spot prices are so high in the U.S. is because there’s no supply, no availability,” said Andrew Cosgrove, a mining analyst for Bloomberg Intelligence.
Prices will probably come down over the next few months but won’t return to where they were at the start of the year, Cosgrove said, noting that he expects utilities to sign long-term contracts for the next few years that are about 30% higher than in recent years. Natural gas prices will stay high and so will demand for coal, but miners have limited ability to expand production and none are expected to invest in new capacity.
“There are no extra tons,” he said.
(By Will Wade)
Net-zero pledges, improved metrics to put pressure on coal power, say investors
Ross Kerber and Richa Naidu
Tue, November 16, 2021,
BOSTON / CHICAGO Nov 16 (Reuters) - Ambitions to wind down the world's coal use are likely to be accelerated by corporate net-zero pledges and better ways of measuring where factories in the global supply chain get their power, investors said.
The use of coal-fired electricity, especially in Asia, remains a major issue for top western manufacturers and retailers, putting them under pressure to shift to cleaner sources of supply in line with a deal at U.N. climate talks https://www.reuters.com/business/cop/un-climate-negotiators-go-into-overtime-save-15-celsius-goal-2021-11-13 over the weekend targeting fossil fuel use.
Sophie Dejonckheere, Director of Sustainable Finance at TD Securities, who attended the U.N.'s conference in Glasgow, Scotland, said within a year or two investors will have access to enough details to press companies about what type of power was used in the production of their goods, both from regulatory disclosures and public sources like satellite imagery.
A growing number of pledges by corporates to cut their emissions will also give investors leverage to see that executives follow through, said Dejonckheere and several other investors.
They pointed to announcements at the U.N. summit, like an effort by banks and financial companies with over $130 trillion of capital to invest toward net-zero goals. Companies including Amazon.com Inc and Apple Inc also pledged to use their purchasing and supply chains to develop clean energy.
"All of a sudden the coal-fired power plants supplying the energy for these products might get some engagement," Dejonckheere said.
Elizabeth Levy, portfolio manager at Trillium Asset Management, said she expects more companies will start buying power from renewable sources in developing nations.
"Companies that were talking about their net-zero commitments need to be thinking about ways to fulfill them," Levy said.
Coal accounted for 36.7% of the world's power mix in 2019, according to watchdog, the International Energy Agency, and about 64% of the total energy supply in China.
RENEWABLE PUSH
Electricity generation has been on the radar of sustainability-minded investors for years, especially in the case of big retailers like Walmart Inc and Target Corp , which draw heavily on Asian suppliers.
James Katz, CEO of sustainable investor Humankind Investments, said Walmart is underweighted in his firm's Humankind U.S. Stock ETF, partly due to the energy sources in its supply chain.
That could change if manufacturers for the world's biggest retailer switched to more sustainable electricity, he said.
The U.N. focus on reducing coal use "should translate into more demand from investors for these sorts of changes," Katz said.
Walmart declined to comment, citing a quiet period before earnings. Last year Walmart began a renewable energy program with France's Schneider Electric SE to give U.S.-based suppliers more access to solar and wind power.
"A lot of organizations that we work with don't necessarily know how to get into buying renewable energy," said Zach Freeze, Walmart's senior director of sustainability, in a recent interview.
A Target representative declined to comment.
'HAPPENING FASTER'
Some investors said they were skeptical investor pressure would lead to fast changes, especially in developing markets with less public disclosure, or for fossil fuel assets owned by hedge funds or government entities.
"Things not sourced out of the U.S. or Europe will be harder to track," said John Bartlett, co-portfolio manager of the Reaves Utility Income Fund.
Still his fund's top U.S. holdings include companies that are moving away from coal like Nextera Energy Inc., whose Florida Power & Light unit shut down its last coal plant at the end of 2020.
Lisa Edwards, president of ESG and compliance software consulting firm Diligent, said the U.N. conference's embrace of global standards for climate reporting should also make it easier to evaluate global supply chains.
Client demand for information on supply issues is soaring, she said, citing the example of an electronics parts supplier looking to evaluate the carbon footprint of every one of its products made in Asia.
"The change is happening faster than any other reporting I can remember," Edwards said.
(Reporting by Ross Kerber in Boston and by Richa Naidu in Chicago; editing by Richard Pullin)
Ross Kerber and Richa Naidu
Tue, November 16, 2021,
BOSTON / CHICAGO Nov 16 (Reuters) - Ambitions to wind down the world's coal use are likely to be accelerated by corporate net-zero pledges and better ways of measuring where factories in the global supply chain get their power, investors said.
The use of coal-fired electricity, especially in Asia, remains a major issue for top western manufacturers and retailers, putting them under pressure to shift to cleaner sources of supply in line with a deal at U.N. climate talks https://www.reuters.com/business/cop/un-climate-negotiators-go-into-overtime-save-15-celsius-goal-2021-11-13 over the weekend targeting fossil fuel use.
Sophie Dejonckheere, Director of Sustainable Finance at TD Securities, who attended the U.N.'s conference in Glasgow, Scotland, said within a year or two investors will have access to enough details to press companies about what type of power was used in the production of their goods, both from regulatory disclosures and public sources like satellite imagery.
A growing number of pledges by corporates to cut their emissions will also give investors leverage to see that executives follow through, said Dejonckheere and several other investors.
They pointed to announcements at the U.N. summit, like an effort by banks and financial companies with over $130 trillion of capital to invest toward net-zero goals. Companies including Amazon.com Inc and Apple Inc also pledged to use their purchasing and supply chains to develop clean energy.
"All of a sudden the coal-fired power plants supplying the energy for these products might get some engagement," Dejonckheere said.
Elizabeth Levy, portfolio manager at Trillium Asset Management, said she expects more companies will start buying power from renewable sources in developing nations.
"Companies that were talking about their net-zero commitments need to be thinking about ways to fulfill them," Levy said.
Coal accounted for 36.7% of the world's power mix in 2019, according to watchdog, the International Energy Agency, and about 64% of the total energy supply in China.
RENEWABLE PUSH
Electricity generation has been on the radar of sustainability-minded investors for years, especially in the case of big retailers like Walmart Inc and Target Corp , which draw heavily on Asian suppliers.
James Katz, CEO of sustainable investor Humankind Investments, said Walmart is underweighted in his firm's Humankind U.S. Stock ETF, partly due to the energy sources in its supply chain.
That could change if manufacturers for the world's biggest retailer switched to more sustainable electricity, he said.
The U.N. focus on reducing coal use "should translate into more demand from investors for these sorts of changes," Katz said.
Walmart declined to comment, citing a quiet period before earnings. Last year Walmart began a renewable energy program with France's Schneider Electric SE to give U.S.-based suppliers more access to solar and wind power.
"A lot of organizations that we work with don't necessarily know how to get into buying renewable energy," said Zach Freeze, Walmart's senior director of sustainability, in a recent interview.
A Target representative declined to comment.
'HAPPENING FASTER'
Some investors said they were skeptical investor pressure would lead to fast changes, especially in developing markets with less public disclosure, or for fossil fuel assets owned by hedge funds or government entities.
"Things not sourced out of the U.S. or Europe will be harder to track," said John Bartlett, co-portfolio manager of the Reaves Utility Income Fund.
Still his fund's top U.S. holdings include companies that are moving away from coal like Nextera Energy Inc., whose Florida Power & Light unit shut down its last coal plant at the end of 2020.
Lisa Edwards, president of ESG and compliance software consulting firm Diligent, said the U.N. conference's embrace of global standards for climate reporting should also make it easier to evaluate global supply chains.
Client demand for information on supply issues is soaring, she said, citing the example of an electronics parts supplier looking to evaluate the carbon footprint of every one of its products made in Asia.
"The change is happening faster than any other reporting I can remember," Edwards said.
(Reporting by Ross Kerber in Boston and by Richa Naidu in Chicago; editing by Richard Pullin)
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