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Asia's growing coal markets

By LEE KYUNGRO, UPI Outside View Commentator   |   Jan. 13, 2014 at 12:03 AM   |   Comments

SEOUL, Jan. 13 (UPI) -- In most countries, coal-fired power plants are the main source of electricity due to their safety, reliability and cheaper operating cost and my home country of South Korea is no exception.

One-third of South Korea's electricity is generated by coal-fired plants. And, a recent South Korean government study states, the capacity of South Korean coal plants is expected to double by 2027.

That means South Korea is going to need to find new, reliable suppliers of coal to meet the country's growing energy demands.

But it's not just South Korean where the demand for energy is growing. This increased global competition for coal means it's also imperative that appropriate steps are taken to enhance South Korean energy security. This means diversifying the places from which we import coal.

Currently, South Korean power companies, or Gencos, which include five coal-generating power companies including the Korea East West Power Co., are combining to import roughly 5 million tons of Powder River Basin coal from the Westshore Coal Terminal in Vancouver, British Columbia. This is roughly equivalent to 7 percent of South Korea's yearly demand for coal.

Due to a variety of forces, including fluctuating policies on exports by the countries providing the bulk of coal for South Korea, the Gencos are placing a renewed priority in the years ahead on establishing a more reliable supply chain through, in part, the diversification of the supplying countries. And the companies are very interested in additional coal from the Powder River Basin because, among other factors, it is considered to be among the cleanest burning coal in the world due to its low sulfur, nitrogen and homogeneity.

The environmental impacts of coal burning is something South Korean energy companies are truly concerned about, which is why every one of the state's power plants operates desulfurizers and DeNOx facilities and emit 70 percent lesser greenhouse gases than the national legal standard.

South Korean power plants are also making every effort to minimize any future affects associated with the increased burning of fossil fuels. For example, one of the facilities is operating the carbon capture technology in order to minimize the emission of greenhouse gas.

Given it is cleaner burning, demand for Powder River Basin coal the world over is expected to grow gradually in the near future. However, the current export volume through the existing terminals on the Canadian West Coast is insufficient to accommodate the expected future demand.

The major stumbling block to increasing the export of Powder River Basin coal to Asian markets is the lack of a suitable coal terminal on the West Coast of the United States. With the energy demand growing by the day in Asia, it makes plenty of sense that several proposals to build new coal export terminal are under review. These new export terminals will help certain Asian countries, including South Korea, whose power supply depends largely on coal fired power generation, to secure reliable coal suppliers and diverse their supply channels with economic benefits.

Considering there are enormous coal reserves in Power River Basin coupled with good quality and highly reliable mining operations, allowing new coal export terminals on the West Coast of the United States will benefit all parties. Coal-importing countries in Asia and throughout the Pacific will be able to diverse their supply channels while simultaneously helping U.S. coal mining companies find a breakthrough from competition with natural gas prices.

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(Lee Kyungro, is managing director of the Fuel and Resources Strategy Division for one of South Korea's power companies, the Korea East West Power Co. in Seoul.)

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(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)

© 2014 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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