The Oregonian, December 13, 2013
By Rob Davis
Three years ago, coal was hot.
Stoked by insatiable coal-fired Chinese power plants, international demand boomed. Prices soared. Phones rang frequently at Oregon and Washington ports. On the other end? Eager investors hoping to snatch up land to build export terminals to quench Asian demand.
How things have changed.
Today, coal prices have slumped. Exports have shrunk. Three coal terminals proposed in the Pacific Northwest have been abandoned. And industry analysts say the three that remain look precarious.
Asia was supposed to be the next frontier for U.S. coal producers, a glimmer of hope for a sinking industry. But the market is shifting underfoot, calling the terminals’ profitability into question. For investors, they’ve become bets that markets will bounce back.
“Certainly, higher prices globally are supportive of these investments,” said Richard Morse, managing director at SuperCritical Capital, an energy finance consulting firm. “To the extent we don’t have higher prices, it’s harder to make these work. U.S. exporters will have a harder time competing with lower-cost international competitors.”