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KurtEng (32.82)

Why I'm long coal

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August 05, 2010 – Comments (3) | RELATED TICKERS: ACI , ICO.DL , BTU

Electric cars. With the advent of Tesla motors and future cars like the Chevy volt, electricity demand could greatly increase in the coming years.  Tesla chairman Elon Musk, says 'The overarching puprose of Tesla, and my reason for personally funding the company is to expedite the move from a mine-and-burn hydrocarbon economy towards a sustainable, solar electric company.' The truth of the matter, though, is that the electricity that charges electric cars is the same as what we use in our homes now, and that is nearly 50% generated by coal and another 21% generated by natural gas.

The 2007 makeup of electricity in America is shown below and the information from the DOE website. Making up 2.5% of electrical production, renewables have a long way to go before they are powering many electric cars. Using a smart grid can increase the percentage of energy from wind and nuclear power, but it will be a while before they significantly increase and the total wind potential probably won't be enough to power all electric cars ever.

 

 

 


 

3 Comments – Post Your Own

#1) On August 05, 2010 at 11:13 AM, Dobbes (< 20) wrote:

You are right, from an environmental standpoint battery production waste and electricity generation from hydrocarbons make electric cars a moot point. 

If you wanted to touch on national security, oil resources are concentrated in a number nations that are often hostile to the US.  Having a domestic alternative, means a secure economic infastructure.

There are many other reasons to be long coal than anticipating higher electricity demand from a growing electric demand.  I have a red thumb on Tesla, I don't see electric cars as happening.  The product has been tried over and over and it never catches. 

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#2) On August 05, 2010 at 11:46 AM, KurtEng (32.82) wrote:

I agree, coal producers are a good investment regardless, but the additional growth from electric cars has the potential for a very good investment. Lower foreign energy imports would be a good thing.

 

Tesla may not pan out, but I see electric cars becoming a solid niche market in the not-too-distant future. The real potential to me is in plug-in hybrids, which is what the Chevy volt will be. I also think natural gas vehicles just make good sense, as I wrote in an earlier blog entry. A natural gas plug-in hybrid could be the vehicle of the future.

 

 

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#3) On August 19, 2011 at 4:04 PM, JPAKolypse86 (< 20) wrote:

The buzz is that coal is in a supercycle, and PCX and BTU are just so cheap now. In regards to nat gas vehicles though, I wouldn't bet on them. I have a friend who works with a fleet of busses that run on natural gas. He tells me that their parts wear down at a much faster rate than the busses that run on deisel.

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