Exports of coal and fuels on track to set record
(AP) - U.S. exports of coal and fuels such as gasoline and diesel continue to soar. Both categories are on track to set new annual records, according to government data.
Coal shipments are rising because U.S. demand for coal is falling as electric utilities burn more natural gas, which has plummeted in price, instead of coal. At the same time, demand for coal is rising in developing countries such as China and India as those countries work to bring electricity to millions who don't have it.
On Thursday Kentucky Gov. Steve Beshear announced a 25-year, $7 billion agreement between India's Abhijeet Group and Kentucky-based Booth Energy Group and River Trading Co. that could send 9 million tons of coal a year to India from West Virginia and Kentucky. That would represent 8 percent of last year's record 107 million tons.
Exports of gasoline, diesel and other fuels are rising because U.S. refiners are able to make the fuels cheaper than almost anywhere in the world. That's because they have been able to access some of the cheapest crude oil. North American crude supplies are rising thanks to booming oil production in Canada, North Dakota, Texas and elsewhere. Also refiners that burn natural gas to help cook the crude into gasoline, diesel, jet fuel and heating oil are enjoying some of the cheapest natural gas prices in the world.
Exports of petroleum products, which set an annual record last year and were the single biggest export by value, are up 11 percent compared with a year ago. Much of the fuels that are exported are made with imported oil, and the U.S. remains the world's biggest oil importer.
The Census Bureau reported last week that coal shipments set a record in June of 12.8 million tons. Through the first half of the year, shipments are 24 percent higher than a year ago. The share of U.S. electricity that comes from coal is lower than it has been since the government began collecting data in 1949. That's because electric utilities are instead burning natural gas, which earlier this year fell to a 10-year low as increasing domestic production and a historically warm winter led to a supply glut.
Coal companies were forced to close or idle mines and lay off workers, but have vowed to look abroad for new markets. The U.S. has the world's largest reserves of coal.
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Source : money.msn.com