low rank coals moving up the ladder, page-7

Wow. There are a few BIG statements made (if you know what I mean), and I will try and deal with them indirectly.

In Australia, a lot of the discussion is regarding coal-seam gas, and its shallowness and getting into the water table. The fracing of shale gas in America can have those problems too, but they are deeper and more competent (hence the difference between the two). And the fact that we are even having this gas discussion goes to show how quickly that things change. Gas plants are actually cheaper than the equivalent coal-fired one. Historically, the rule in the past was that building gas plants was cheaper and coal-fired planst more expensive. But coal was cheaper, and gas more expensive. Another reason was coal fired power stations cannot be turned off and on - because they take a long time to get up to optimium temperature to burn efficiently, especially if burning lignite. Hence coal was always base load - and gas peak.

However, gas has clearly taken over in the US - and is now selling for a fifth of what it was only five years ago.

You are also right in that shale gas deposits have been found all over the world, but they have their own characteristics. And I would put it to you that the ast majority will be in no hurry to be developed. The great strength of the American (in particular the Barnett Shale), is its thickness, uniformity/heterogeneity, good porosity, gas content – and importantly, a large existing pipe-line infrastructure. Hence, the reason why it has been so easy to get good economics in the US for its rapid development – you just needed to hook it up. In fact because these shales are so wide spread in the US, fracing development is currently based on existing infrastructure rather than picking the best resource region. This is the reason why there is so much substitution of coal to gas – because much of the population already had the choice between electricity and previously idle gas plants – that the transition between the two was virtually seamless. Many people forget that it was only a number of years ago that it was generally thought that the US was going to run out of gas – with virtually all all the gas-fired stations were closed down.

Now in regards to another statment, yes, there are other shale gas regions globally, even in Australia, but they are unlikely to be developed for a variety of reasons. In Europe, most of the “prospective” shale gas regions are in Poland then run into the Black Sea, Scandinavia and off shore UK. In fact the Russians were so scared about their gas markets being completely wiped out, that several years ago, they signed some very long-dated big gas contracts at very cheap prices (including a sweet heart deal with Ukraine) to make this new gas potential largely economic. In hind-sight, they need not have worried – the porosity in Poland was so poor (a lot of it done by US mini-majors) that it is now off the books. China has also large potential gas shales, but as far as I know, they are largely deep, structurally complex, non planar (which makes them difficult to frac and extract). In Australia, they won’t be developed for a long, long-time because of the cost and the lack of existing infrastructure.

Now I don’t quite understand your link to nuclear power (a poltical bent)? So I won’t attempt that leap. Just to say, I don’t like polluting my breathing air either.

But I would make this point that given the latter UNX uranium results, grade and tonnages were not what the market was expecting. If this new guy (Exploration manager/MD) manages to get that exploration program back on track, and retain the IP within the company this time (it was wrong to contract it out – hence the under whelming results!!!!). Then this company may have something worthwhile radioactive wise. But that is a maybe!

The last time I invested into something renewable, because it was pontificatingly green, I lost >90% of my money (and still counting) – with the only winner, the highly paid MD with a salary package over $500k pa. The one thing that is indisputable about Matt Gauci, was he was never paid anywhere near that much… and got the company refocused - including coal (not mentioning prior UNX coal assets given away - and are now producing !!! - a point everyone ignores. Criminal)

I suspect I am wasting my time.