DirtSimple

Coal vs. Natural Gas: Which ETF Will Win the Battle?

All fuels produce CO2, NOx, CO, SO2 (if sulfur is in fuel), H2O and other compounds when burned. Chemical composition of the fuel determines what the products of combustion will be when the fuel is oxidized. Combustion is the release of energy when the fuel is combined with oxygen in the oxidation process. The primary components of the fuel, typically C & H, combine with O to form CO2 and H2O, the major constituents in exhaust gas, along with the nitrogen that was in the combustion air.. This happens whether it's a gas turbine or a coal boiler. Both simple and combined cycle gas turbines use advanced combustors and post combustion catalytic clean-up to control NOx and CO just as the coal plants do. Coal has more C in the fuel and thus has higher CO2 emission than gas fuel. Gas turbine exhaust is always cleaner than a coal plant exhaust. Coal is cheaper, but it normally has many other trace elements in it such as mercury and lead that are problematic. Gas turbine combined cycles are roughly twice as efficient as coal fired steam plants, so when you combine that with the fact that gas fuel has lower carbon content than coal, the overall environmental impact from the gas turbine plant is always lower than that of a coal plant.

Re VOC's = Volatile Organic Compounds, These are usually understood to be higher order hydrocarbons, and are usually specified as being non-methane and non-ethane compounds. Methane and ethane are the two primary components in natural gas. Higher order complex hydrocarbons that survive the combustion process (C & H molecules that did not oxidize in the combustion process) are exhausted with the other combustion products. This happens in both coal boilers and in gas turbine combustion processes. (Trane250 - It has nothing to do with lube oil. If lube oil is burning off of the bearing surfaces, there is a big equipment problem, and the unit either is about to, or already has, tripped off-line.)

So, after all that ,,,, what is it, coal or gas???

IMHO - 50+% of our generating base using coal isn't going to disappear overnight. Gas fired simple and combined cycle is the only current available solution to meet short term load growth needs, especially if/when the economy picks up. Alternatives will continue to develop, but when the price of alternatives and CAP & TAX are in full swing, the consumer will start to wake up to what's happening when he gets the bill. (BTW - did you know that every MW of wind or any intermittent renewable generation requires a dispatchable back up source for reliability, usually gas fired GT these days?) I don't expect coal to drop long term, and it should see support in the export market as well, if not at home. The opportunity I'm watching for is signs of recovery, then go long gas. And, if GE ever dumps its financial arm, I'm all over that one! Even more if it dumps NBC too.

Disclosure - no positions in either coal or gas at the moment, Retired GE.