U.S. coal is so cheap at about $47 a ton that European utilities will pay $50 to ship it across the Atlantic, according to Galbraith's Ltd., a 263-year-old London shipbroker. Although oil and coal cost the same as recently as 1998, West Texas Intermediate crude is five times more expensive after marching toward $100 a barrel this past week.
U.S. coal prices are equal to $1.98 for each million British thermal units of energy, compared with $12.51 for fuel oil and $6.91 for natural gas, data compiled by Bloomberg show. A million British thermal units is the equivalent of eight gallons of gasoline.
Peabody Energy Corp., Consol Energy Inc. and Arch Coal Inc., the three biggest U.S. coal companies, forecast the largest increase in exports in 20 years, degrading the call for a moratorium on coal plants by the former vice president and this year's Nobel Peace Prize winner. Coal use worldwide has grown 27 percent since 2002, three times faster than crude, said BP Plc. The price of U.S. East Coast coal has risen 71 percent in that time, while oil tripled on the New York Mercantile Exchange.
''Coal is by far the cheapest fuel because there's no price [at this point] on how much damage it causes,'' said John Holdren, a Harvard University professor of environmental science and director of the Woods Hole Research Center in Falmouth, Mass.
''There is a huge advantage with coal, and this will continue indefinitely,'' said Gianfilippo Mancini, the head of fuel purchasing for Enel SpA, Italy's largest power company, which is spending $5.8 billion to convert oil-fed plants to run on coal.
Gore said five months ago that the U.S. should adopt a ''complete moratorium'' on new coal-fed power plants unless all of the carbon dioxide from them can be buried underground. Government efforts to subsidize coal as an alternative to oil would be a ''serious mistake,'' he said in a recent interview.
U.S. coal exports to Europe for the first nine months of this year were 11.4 million tons, up 15 percent from the same period in 2006, according to the U.S. Energy Department. Coal generates 41 percent of the world's man-made carbon dioxide emissions, blamed by many (but not all) scientists for the warming of the Earth's climate, Gulf of Mexico hurricanes and rising sea levels.
More than 1,000 coal-fed power plants will be built in the next five years, mostly in China and India, according to the U.S. Department of Energy. China, the world's biggest coal producer, became a net importer for the first time this year, taking supplies from Indonesia, Australia and South Africa and reducing the amount available for Europe.
''If those 1,000 plants get built without any controls on carbon emissions, we will careen into unmanageable changes in our climate,'' the 63-year-old Holdren said in an interview. ''We need to motivate carbon capture and storage through policy. We will still be using coal, but in much smarter ways. It doesn't have to be an economy buster.''
To be sure, proposed U.S. coal plants may not be completed because of regulatory and environmental opposition. Kansas regulators last month rejected a permit for a coal-fueled plant because its carbon emissions were deemed a health hazard.
Coal producers in the U.S. say sales in emerging markets are rising.
''I didn't know how to get coal to Romania a month ago but I do now,'' said Michael McQuillen, chief executive officer of Alpha Natural Resources Inc., the coal miner in Virginia formed by First Reserve Corp., the largest private-equity firm focused on energy assets. Russia, Ukraine and Romania are all looking to buy from the U.S., he said.
U.S. coal exports have increased 37 percent this year and will continue to climb because of record global demand and a weaker dollar, analysts and executives say.
