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As oil prices rise, it usually causes other commodities such as
natural gas and coal to rise as well, generally at a lesser rate than
oil. Coal typically rises at a rate of 40% of that of oil, making it
the cheapest and most abundant alternative to oil, which would explain
why the EIA projects its use to climb over the next two decades and
does not expect nuclear or renewable energy to reduce coal's market
share during this time. There are solutions to the increasing
demand for energy, and include several which use coal as its feed
stock. Suggestions are most welcomed Coal-to-liquids, is one in which coal is broken down to form a
fuel oil. While potentially much cheaper per barrel than oil, it is
capital intensive and requires that oil prices stay high to motivate
investors to risk this capital. Coal gasification plants are another
technology we have seen in the limelight in our industry. These are
power facilities that clean the impurities from coal before it is
burned and sent out the smokestack, or in most recent developments
(mimicking a DOE project from the 70’s), creating pipeline quality
natural gas (PQNG).
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