Might Coal Trigger More Energy Woes?

If you think coal is the answer to all our energy woes, you might want to think again.

According to the Wall Street Journal, energy officials think the U.S. might not be able to access as much coal as once thought.

“We really can’t say we’re the Saudi Arabia of coal anymore,” says Brenda Pierce, head of the U.S. Geological Survey team.

It’s not that we’ve used more than anticipated – it’s that most of the reserves can't be extrated at a profit.

As a result, we may have to adjust the way we think about supply.

According to the Journal, "David Rutledge, an electrical-engineering professor at the California Institute of Technology who has studied global coal production, figures the U.S. has about half as much recoverable reserves as the government says, which would work out to about 120 years' worth."

What’s the problem?

Mining companies report they have to dig deeper and move more earth to extract coal from aging mines, driving up costs. That forces some serious recalculating and number crunching.

What does it all mean?

As you know industry is heavily dependant on coal for power; two thirds of our steel production is dependant upon it. Also coal is used by power plants to generate 40 percent of the world’s electricity.

Sounds bad, but it's not all gloom and doom. It’s not clear just how overstated supply may be and the Journal says "no one is forecasting a shortage."

In fact, Peabody Energy CEO Gregory Boyce tells Fast Money, don’t put the cart before the horse.

“We still have an excess of a century’s worth of coal left in the ground,” Boyce says. “I don’t think there is anything in this Wall Street Journal article that anyone should be alarmed about.”

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