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[quote user="eastside"][quote user="MichaelSol"] Regarding the coal industry, the individual power companies have begun utilizing recent very large rate increases by the railroads for their IRR calculations for new power plant construction. The size of many of the recent rate increases has taken the power generation industry by surprise, as the cost of transporting coal, in particular Powder River Basin coal, now exceeds the cost of the coal itself by 2-3x. The transportation cost of coal is becoming the single most important factor in evaluating the potential of new power plants and their locations, and even though most power rates are still cost-based, the sharp rise in transportation costs, coupled with rapid changes in transportation costs, have made it difficult at best to justify to investors and lenders a long term investment based upon unpredictable and rapid cost changes.[/quote]One of the ways to finesse transportation charges is to site the generating plant at the source of the coal.  The Navajo reservation in New Mexico has large reserves of coal.  Because they have sovereign status, and are thus immune from state laws, you’d think it would be easy for them to build a generating plant near the Four Corners.  However, they are facing intense opposition from other Navajos and environmental groups.<a href="http://www.nytimes.com/2007/07/27/us/27navajo.html?pagewanted=1&_r=1&hp">NY Times Story</a> [/quote]Eastside, you're not getting it.It's the combination of sharp increases in rail rates for coal, plus the political idiocy of demonizing carbon-based fuelstocks, that will kill the coal-fired generation sector.  Certainly, the railroads are explicity responsible for the former, and they share an implicit responsibility for the lack of support for those who are trying to expose the global warming fraudmongers for what they are.  The two industries that will suffer the most from global warming fraud, in addition to the coal folks, are the railroads and the auto industry.  Utilities will simply gravitate toward nuclear and natural gas, with token acceptance of so-called "renewables".  Remember, most utilities are regulated, with guaranteed 10% markups more or less, and they will simply take advantage of higher cost energy generation to increase their gross revenues (Hey, which is better - 10% markup of $28/Mwh power which results in $2.80 of profit per Mwh, or a 10% markup of $60/Mwh power which results in $6.00/Mwh of profit?  Memo to utilities - just keep quiet about global warming fraud and reap the benefits!)  Thus, it is incumbent among coal haulers and petroleum users to stand up and grow a spine in the face of this seemingly omnipotent scam.
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