More Coal Production Cuts Could Be Coming, Despite Slightly Higher Gas Prices
Rising natural gas prices could mean good news for the country's coal industry...but there are still likely cuts to come in Central Appalachia. That's the gist of an articlefrom SNL Finanacial.Earlier this year, gas was at less than $3 per MMBtu, which some call the "sweet spot" for coal to gas switching. Any higher than $3, and it's not as cut and dry a decision to switch to natural gas. But now, gas futures for November are trading at slightly higher than that: at $3.459 per MMBtu.Another factor in coal's favor: a hotter-than-usual summer (where everyone cranked the AC and burned lots of coal). The stockpiles of coal at power plants are getting back down to normal levels, which means some companies could start ordering more production.But the articlequotes an analyst who says, unfortunately for Central Appalachian coal producers (which includes eastern Kentucky), those factors aren't enough to jumpstart production immediately.