On the Blogs: The BLM Is Selling Publically Owned Coal for a Song

first_img FacebookTwitterLinkedInEmailPrint分享Clark Williams-Derry for Sightlines.org:If you’ve been following the news, you probably know that coal is down in the dumps. And as a growing body of academic research and real-world practice shows, owning the rights to coal reserves can give coal companies the ability to profit from price increases, without obligating them to incur losses if mine development looks unprofitable. As it turns out, the right to earn a profit without risking a loss can be worth quite a bit. There’s an entire field of financial economics known as “real options theory,” devoted to estimating the value of speculative projects such as coal mines. We’ve run the numbers, and estimate that even in today’s dismal export market, owning the right to profit from future price increases in export markets could be worth more than $9 per ton.Even in today’s down market, coal leases are worth much more than the federal government has sold them for. Just as importantly, the high prices and wild price swings in export markets can make exports more valuable than domestic sales.Which is all the more reason for BLM to look at the economics of coal exports when deciding the price it will accept for federal coal.Full item: Coal Exports and the Hidden Value of Federal Coal On the Blogs: The BLM Is Selling Publically Owned Coal for a Songlast_img

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