Possible US Energy Crisis Looming ? (oil, distillate inventories, oil company production, Exxon Mobil XOM)

    In 2012 57 coal generators representing 2.8% of America's coal fired energy capacity will be shut down with another 118 shutdowns slated for retirement in the years to come. In November 2011 coal's contribution to energy generation dipped below 40% for the first time since the 1970's. A big reason for the shutdowns is the costs associated with making them more eco-friendly (costly carbon emission credits in addition to new federal laws requiring that all be fitted with new emission reducing technology such as nitrogen scrubers). In California, coal utility plants face even more obstacles; Some of the newest energy laws in California literally make it impossible for utility companies to continue using coal to generate electricity by disallowing the renewing of contracts (Edison International is one of many victims).
Keep in mind that all this is happening despite the fact that the United States is home to 28% of the world's coal reserves and that China is building dozens of new plants each year.

Note: In the March 2012 quarter, US carbon emissions were at a 20-year low of 1.340 billion metric tonnes. Coal-sourced carbon emissions dipped below 400 million metric tons for the first time since the mid 1980's (387 Mt down -18%).

Petroleum - Oil - Natural Gas

On August 1, 2012 the US Energy Administration reported that oil stockpiles were down on the week by the largest margin in over half a year; US stockpiles of crude oil fell -6.5M barrels to 373.6M barrels (however vs this time last year crude oil stockpiles are up +18.6M barrels). More disturbing though is the long term downward trend in US stockpiles of distillate (usable gas for fuel); Distillate stockpiles are 28 million barrels lower than they were at this time last year (152.3M --> 124.3M) after declining by another million barrels last week (week to week, finishing at 124.3M barrels).

The US still imports almost 45% of the oil it consumes and its domestic reserves rank next to China's (19 billion vs 14 billion barrels) so maybe it's time American oil companies do what Chinese companies are already doing, which is acquire foreign assets ! (CNOOC takeover of Nexen, Talisman sells $1.5B worth of assets in the UK). Note: Nexen's proved oil reserves are similar to Anadarko's (2-2.5 billion boe).

According to the EIA on July 30, 2012 American gas pump prices were lowest in the Gulf Coast ($3.31 per gallon) and highest on the West Coast ($3.71 per gallon).
June 2012 breakdown of US gas price: taxes 12%, distribution and marketing 14%, refining 12%, crude oil 62%.
Regular gasoline average price: $3.54/gallon, diesel $3.76/gallon; US gas prices today are about 50c/gallon lower vs the 6-month high.

Oil Companies

Companies are looking for oil in new places: Anadarko Petroleum is beginning exploratory drilling in New Zealand in 2014. Corridor Resources wants to set up a deep water oil well in the Gulf of St Lawrence (being considered July 2012) but that project is facing a lot of opposition.

As shown in the graph, America's 3 biggest oil companies are producing less while the relatively smaller companies are the ones adding to output. Furthermore, Anadarko Petroleum, considered by many to be the fourth largest US-based oil company, is suffering from assets writedowns (could cause the company to devalue which would make it a takeover target, bad news considering US companies need to be more aggresive with regards to foreign takeovers).

Quarter ended June 2012

Of the six regions that Exxon operates in only the Canada/South America region showed an increase in oil liquids production (240 --> 243 th boe/d). Exxon gets 37.6% of its natural gas output from Asia (ahead of the USA at 33.4%).

Occidental Petroleum net income down -27%
El Paso Corp: avg realized sales price up +18.0% for oil/condensate ($86.27 --> $101.81) but down 28.6% for natural gas ($4.06 --> $2.90) and down -18.7% for ngl's ($50.37 --> $40.96).
Anadarko reported a -$380M loss on $978M in writedowns of its coalbed-methane natural gas assets. Anadarko has interests in some of America's biggest shale resource plays including Marcellus and Eagle Ford but the writedown concerns other properties in Wyoming's Powder River Basin.

Unstable Natural Gas Prices Lead Companies To Abandon Shale Projects --> US Reserves Of Shale Go Down

Research in Motion (RIMM) Down But Definitely Not Out (undervalued techstocks, competition, blackberry 10)

      Research In Motion sold 260,000 playbooks between March 3 and June 2 of 2012 which though down quarter to quarter, is still one of the best quarters for tablet sales since their launch one year ago (500,000 in 4q12, 150,000 in 3q12, 200,000 in 2q12 & don't forget that playbook now owns 15% of the Canadian tablet market up from 5% in early 2011); Also, keep in mind that the less popular 16 GB playbook is being discontinued. RIM has yet to unveil the rumoured 10 inch model meaning that the company literally had NOTHING NEW to offer last quarter but still did reasonably well on the sales front. Only recently has the company allowed blackberry messenger users to view facebook and twitter updates so the full impact of that on sales won't be realized until another quarter. Remeber also that earlier this year sales of BlackBerry phones rebounded strongly after one of the worst quarters in company history.
Signs pointing to a recovery in stock price: July 2, 2012 Hudson Square upgrades RIMM to buy from hold consequently establishing a price target of $10 or 33.9% higher than now (July 3 start of trading). Also note that Lazaridis, one of RIM's biggest shareholders with 30M shares or 5.6% of the company (last major purchase was for 3.1M shares back in February) has not been a seller, indicating his confidence in a recovery.  Oct 31 through Nov 4 share price up +14.5% to $8.71 giving it a market value of $4.56 billion (Nokia up +3.0% to $2.80).

September 2012 Update:  For the three months ended September 1, 2012 Research In Motion posted better than expected results.  Although the company's bottom line remains in the red at -$235 million or -$147 million adjusted (27c/share) the loss is 43% lower than the expected -47c/sh.  In the two quarters prior RIM lost $518m (-99c/sh) and -$125m (-24c/sh) respectively.  Despite not releasing any new products, RIM's quarterly revenue was up +2.10% from the previous quarter at US $2.873 billion.  Negatives : 2013 second quarter cash flow was only $432 million $278 million less than in the previous quarter.  Shipping volume for smartphones was 7.4 million down -5.1% from the previous quarter.  As of September 2012 BlackBerry subscriber base is 80 million (+2 million last three months).

Financials : The Good News
$2.2B in cash equivalents + short & long term investments = $100M more than it was at the end of the previous quarter. That means that in the short term, RIM does not have to part out portions of its business (like Nokia is doing with Microsoft) to survive (why I especially don't think the company will give up either of its two core units, hardware or services, afterall it didn't consider selling either six months ago when the stock was worth 60% more).
The adjusted earnings loss in this first quarter of 2013 is actually a first for RIM (-$192M or -37 cents a share). In the prior quarter adjusted net income was actually $418 million which isn't bad considering Nokia went through a number of quarterly losses before investors punished the stock.

Subscriber base up +1M to 78 million giving RIM's cash flow a stronger foundation.
The last two quarters provided a combined unadjusted net loss of $643M only about a third as much as Nokia ($2.01b) even though RIM launched NO new products but Nokia had its Lumia 900 (2 million units sold up from 1 million last year).
Research and Development spending was almost identical to the November quarter of 2011 ($368m) but down only slightly q2q from $386m (March 2012 quarter), not bad considering it had 33% less revenue to work with ($2.8b vs $4.2b). Services (bbm, etc) accounted for 36% of revenue up from 27% in the previous quarter.

Research In Motion is trimming its workforce by about 5000 but that includes job cuts through to the end of 2013 (the quarter BB10 is released) so the good news here is that this is rock bottom ! Job cuts will save the company one billion dollars a year.
BlackBerry Jam (began last month, May 2012) aims to improve blackberry app world by bringing together industry leading application developers in order to help them innovate and get their products to market faster (one of the attractions for app developers is the fact that the top 10% of vendors are making more money at BB app world than at Android or even Windows).

RIM vs Nokia
Including the half a billion dollar loss in this quarter, RIM profited +$556 million over the last 4 quarters, so operating losses are still relatively new (by contrast Nokia lost -2.437b in 52 wks ending March 2012).
RIM sold $1.6 billion worth of devices (7.8M/260th playbooks); Nokia sold $4.2 billion worth of devices (83M cellphones, 12M smartphones). Nokia avg selling price for devices: €51, RIM avg selling price: ~ $200.

RIM's enterprise server/security platform (playbook first to be approved by the US government) basically makes it a major player in the corporate market regardless of how well developed or freely accessible its app market is (BlackBerry used by 90% of fortune 500 companies, on June 26,2012 the UK government approved use of blackberry security software important since the blackberries now offer mobile voice solutions; this is just one of many such approvals the long term positive effects of which are enormous).
In the latest quarter RIM shipped 7.8 million smartphones which is only 3.1 million less than Nokia (by contrast at this point last year the difference was closer to 10 million). 7.8 million is low but not THAT bad considering sales weren't that much higher at 10.6 million in the quarter nine months ago (and recovered in the following quarter when sales improved to a near record high of 14 million). It made $1.652 billion from the sale of 7.8 million phones and 260,000 playbooks. Comparing that to the $3.066 billion it made in 2q12 from the sale of 10.6 million phones and 200,000 playbooks indicates that the average selling price of a BlackBerry went down since then. I'd put the average playbook price at about the same as the phone (remember, the company now sells playbooks at $199-$299 down from over $500 earlier last year). That comes out to around $206 per device or 29% lower than the average selling price of a blackberry 7 phone earlier in the year according to Abramsky. You have to think, how much profit can RIM make from the next generation phones ? especially considering the vast amounts of features they're going to have.

Refering to the BB10 phones CEO Thorsten Heins said that he's confident they'll provide "a ground-breaking next generation smartphone user experience". The delay in launch is due to the time consuming process of integrating key features which RIM has had success developing (main carriers of the BB are more than satisfied with the platform).

Financials : The Bad News

If you're an investor then be prepared for a wild ride over the entire fiscal 2013 period, and it's only the 2nd quarter ! Operating losses, though still new at RIM, won't end until after we witness the consumer markets response to BlackBerry 10 qnx phones. That's quite a risk to take considering you're going to have to support a company bleeding money for the next nine months and then you have to hope that BB10 (aka BBX) will be THE gamechanger (by that time a slew of new android phones will have already hit the market, each better than the last).
If it were me, I'd take the risk. You see, it was only last month that the US military committed to buying more blackberry devices, which instantly validates the company's security, platform and features. The military, among other DoD and enterprise customers, was particulary impressed with enhanced features on the newest model 7 phones (near field communication technology/voice activated search) and with mobile payments facing increasing scrutiny from government lawmakers, blackberry's devices are already government approved (security) and that could mean a lot in the future.

Sobeys (EMP.A) Did Well in 2012 Even Compared Loblaw Companies LTD (L), Metro Inc (MRU.A)

Empire Company Ltd (tsx:EMP.A) is the parent of Sobeys Stores Limited, the food retailing unit which contributes 99.0% of revenue to the Empire Group (up from 98.3% in 2011 due to the divestment of Wajax property business but that will change next year due to the inclusion of 236 more gas stations as part of operations). Empire Company is still looking like a solid investment (ebitda margin grew the most out of the three companies however it's still in 3rd place at 5.5%).

It upped its dividend payout to 24 cents a share from 22.5 cents which represents an impressive +6.7% jump (had been 20c for a number of quarters prior to that). That beats Loblaw companies LTD last quarterly dividend payout of 21 cents a share back on April 30, 2012 (no growth quarter on quarter) and 21.5c at Metro Inc (up 12.0% from 19.2c which is a nice return). Metro had no problem hiking dividends, with earnings per share up +12 cents (82-->94c) compared to +14 cents at Empire Company (121-->135c) and -13 cents cents at Loblaw Companies Ltd (58-->45c).

Same store sales: Metro 2Q12 (March 2012) +1.0%; Loblaw Companies (march 24, 2012) -0.7%, Empire Company (June 2012) +0.7%

Although sales were down slightly in the last quarter of 2012 (-1.8%), after accounting for the period length being 1 week shorter empire's total sales were actually up +3.0% or $474.9 million (fiscal 2012 only 52 weeks vs 53 weeks in fiscal 2011). Sales were also +3.0% higher for the year after accounting for 2011's extra week & the impact on sales resulting from acquisitions & divestments of convenience stores/gas stations (sales difference between 2011 and 2012 goes from $290m --> $474.9m). Empire Company's EBITDA (unadjusted) ended 2012 on a strong note, up +$14.4m over last year's quarter compared to only +$13.6m for the entire fiscal year (meaning it actually contracted over the previous three quarters). In 4q12 only $10m ($35.3m for the year) in profit came from investments and other operations up from $6.5m in 2011. In the thid quarter, Sobeys food business contributed $3.94 billion to revenue (out of Empire's $3.98b) while in the fourth quarter it was $4.02 billion (out of Empire's $4.07b) which is about 99.0%. In terms of profit, Sobeys was the source of only 89.54% of Emipre's over the last two quarters.
Ebitda margin for last quarter; Metro Inc still leads the industry at 6.9% (up from 6.7%), Loblaws is still in second place at 5.9% (down from 6.6%); Empire Company, though last went up more than the other two: 5.5% (up from 5.06%).


Business at Empire Theatres appears to be strong with revenue from Empire's non food business up +7.2% to $50.6m (from $47.2m); Most of the revenue in that category comes from cinema operations. For fiscal 2012, that revenue reached $204.5m up from $200.5m.
$10M in ebitda gains in fiscal 2012 are attributed to 'dilution gains' from a change in ownership level of Crombie Reit. Normally it's $74.8m (vs $69.4m) but that changes to $64.6m (vs $62.6m) after removing items not considered part of underlying business.
Funded debt fell -$21.6m to just over $1.1 billion (1.3xebitda). Funded debt/total capital fell -1.7 basis points to 25.0%.

Market Share
If we base the market share each has in Canada's food retailing industry on the food revenue of each company during the last two quarters, we can assume Sobeys is at 23% if we believe Galen Weston Sr (Loblaw Companies) when he puts his company's share at 40% (Sobeys sales last six months $7.9632 billion vs Loblaws $14.034 billion last two reported quarters ending March 24). It follows that Metro Inc has 15% of the market (all of its revenue comes from food).

More information about the grocery industry can be found at another website I launched recently at www.grocerynews.org

Empire Company LTD (EMP.A) Will Marc Poulin Be Able To Fill Bill McEwan's Shoes As President Of Sobeys ? (Loblaw Companies LTD (L), grocery market competition)

          The February 8, 2012 announcement from Empire Company Limited concerning the retirement of Sobeys CEO Bill McEwan came as no surprise to those already aware of his recent health problems, but that doesn't mean there won't be a difficult transition period. Bill McEwan was instramental in growing the company's business both in its size and market penetration (in just the last two years FreshCo was launched followed by full-service next generation IGA stores in Quebec and Ontario). He oversaw implementation of the company's development growth strategy which thus far has been a success. Sobeys went from being mostly just an Atlantic grocer to one with a Canada-wide reach (881 of its 1337 locations are in Ontario, Quebec and Alberta). It was just after he joined in 2000 that Sobeys parent, Empire Company purchased most of the interest it currenty has in Genstar Development Partnership (real estate, at present Empire owns 40% of Genstar only marginally higher than the 35.7% acquired in January of 2001; Genstar is now a bigger part of the company's real estate business since the divestment of Wajax last year).

Mr. McEwan was also instrumental in getting deals done with Target (will supply the chain with private label food products) and Shell (Sobeys not Empire Company made this deal; acquired 250 of Shell's 1,600 Canadian gas stations. That's in addition to the dozen or so Fast Fuel locations already run by Sobeys Atlantic). In fact even Sobeys private label (Compliments) was launched in the middle of his tenure; The brand now includes a portfolio of five distinct product lines; Balance, Organic, Sensations, Greencare in addition to Compliments, which is vital considering main competitor Loblaw Companies has seen demand for its own Green Leaf organic products surge.

     For a grocery chain that added more than +$200M to operating income, +$6B to sales and pushed parent company Empire's dividends past 80 cents a share, Bill McEwan's generous compensation ($1.9M cash bonus in 2010 in addition to a 3.8% raise) is easy to justify. Only two years prior to making him CEO, Sobeys completed the takover of IGA's parent company the Oshawa Group, in a mega deal that more than doubled sales; That added another dimension to his new job, tasking him with integrating the two companies, does he convert IGA into Sobeys stores or not ? what about Price Choppers? He left the brands intact except for Price Choppers, but that's a different story. Price Chopper locations are gradually being replaced by FreshCo which also markets itself as a discount retailer, meaning they will continue to attract the same type of customers. Sobeys is about half as big as Loblaws (sales) the same as it was back in 2000, but remaining the second largest in what has become an ultra-competitive industry is itself impressive.

His story is remarkable to say the least. He started out bagging groceries at a Ferraro supermarket as a teenager in British Columbia. At around 18, he entered university and began studying Arts before cutting his studies short two years later, opting instead to go back to work at the supermarket. His passion for the food business gave him unique insight as well as put him in contact with the right people and by the 1990's he was a vice-president at A&P in the United States.

Now onto Marc Poilin, who is he ? For starters, he has a masters degree in business (though Bill McEwan did more than alright without one), has 26 years experience in the food retailing business (started out with Provigo - now owned by Loblaws) and 1 year experience as president of a major grocer (IGA).

His job won't be easy; Food price inflation especially for meats (record high and going up) means Sobeys will eventually be forced to raise prices more than customers are accustomed to (2Q2011: Sobeys prices decline -1% even though cost of goods actually went up). Sobeys has not yet raised prices the way it would have liked and that's because of an unprecedented amount of promotional discounting also known as 'disinflation' attributable to intense competition. Not helping the situation is Wal-Mart which now carries more grocery food items than it did a year ago.

Bill McEwan has routinely been awarded top tier industry-level recognition. In 2005 he received the Global Pencil Award. In 2009 supermarketnews named him a top 75 food retailing executive and on April 10, 2012 the Retail Council of Canada gave him the lifetime achievement award (highest award in Canada). The leadership change will become become official on June 29, 2012.

Also of note:

- Empire Company's current president Paul Sobey took over the reigns of the company in 1998, only two years before Bill McEwan joined so it'll be interesting to see if his departure leads to any changes at Empire's board.

- On April 26, 2007 Sobeys and Empire Co officially become one company (Empire) after Sobeys agreed to be bought out for $1.06B (72.1% --> 100%). So until 2006 Sobeys annual report statements were made by itself not part of Empire Company reports.

To those of you who visit my site regularly looking for new posts I apologize for not writing as much lately. I've had a busy couple months and am getting ready to launch a couple new websites. One of them is grocerynews.org (already started but has a lot of work ahead) and the other one I'm working on will be located at techstocks.co (.co not .com). Thanks for visting and appreciate the comments !

Amec plc Is A Solid Company Built On Growth (LON:AMEC, Mactec, Urenco, BP, Clean Energy, Energy Investments, Earth & Environmental)

Here's a stock that should appeal to the pernickety investor, London-based engineering group Amec (LON:AMEC). The company is an important player in both the nonrenewable (oil & gas) and renewable (nuclear & other clean energies) sectors; It provides services ranging from oil rig maintenance to water supply management of municipal acquifers and conservation strategies to nuclear power plant decommissioning and other safety services.

What makes the company solid is the fact that the services it provides are so diverse. It operates in oil and gas but also the booming clean energy industry. There's also the minerals & metals and environment & infrastructure divisions. The group provides consulting, engineering and construction/project management primarily as designer-developer of strategic assets (also maintenance and decomissioning, in 2010 $2.45b of its $5.0b sales originated from the engineering design process). In the North Sea, it fabricates and designs oil rig platforms. It also services oil wells in Kuwait and aids oil safety efforts in the Gulf of Mexico where it designs and delivers components for the Marine Well Containment Company (MWCC). In Chile AMEC has a contract with Compañía Minera del Pacífico (EPCM) for work at the Cerro Negro Norte iron ore project.
After the nuclear meltdown in Japan, nuclear safety is also becoming a major issue. That's good for Amec because the company is experienced at nuclear cleanup and decommissioning problematic reactors. Amec's customers are diverse meaning the company appeals to a broad group of clients. Key clients include the US Navy, nuclear company URENCO, and oil and gas companies British Petroleum and ConocoPhillips.

Important points to consider
- Amec added 3500 new employees in 2011 bringing the total to just over 27,000.
- Amec runs AMEC academy which helps new employees develop skills.
- Amec added a number of new customers in 2011 among them GDF Suez (Cygnus gas field) and nuclear power company Urenco.
- World primary energy demand is forecast to increase by 40% between 2009 and 2035 (12.15M tones of oil equivalent --> 16.950Mtoe).
- According to the world's biggest company ExxonMobil (2012 Global 2000 list released in April) global population will increase by 25% between 2010 and 2040 with non-OECD nations contributing 90% of energy demand growth.
- The Clean Energy market which is integral to Amec's business mix, was the recipient of $260 billion in global investment in 2011 which is a record high for that market.

Key Financial Metrics to consider

In 2011 earnings per share (EPS) up +13% to 70.5 pence, grew faster than revenue/turnover (+11%). Amec also pays dividends ! 30.5 pence/share in 2011 which is +15% vs 2010 (26.5 pence). While we're talking about dividends keep this in mind, AMEC's dividends have gone up for four consecutive years. Dividends were 13.4p in 2007, 15.4p in 2008, 17.7p in 2009 and 26.5p in 2010. The company's operating cash flow was up +22% in 2011 to £267 million. Total pretax profit is up nearly 50% in just two years even though during that time revenue increased by only 28.4%.

In my opinion AMEC's products and services are invaluable to the energy industry. Though about 80% of revenue comes from Europe and North America, AMEC has offices in 40 countries worldwide. The company is also not afraid of making big acquisitions; Amec has a major growth strategy which is refers to as Vision 2015. It aims to make the company more multinational through acquisitions while also enhancing its capabilities in key sectors. Consistent with that goal, in 2011 Amec acquired Australian oil and gas consultancy group Zektingroup for AUS$48 million (gives it a presence on the East Coast of Australia, Zekting's workforce = 200) followed by Georgia-based Mactec on May 17, 2011 for US$280 million all in cash. The deal for Mactec was ingenious, although Mactec is already involved in the same kind of business its client base was a lot different (was more commercial and industrial). In its last year of being independent Mactec made $411M in revenue (compared to $5.0B for Amec in 2010).

Mactec
The Mactec deal added 2,600 employees to Amec and boosted its North American workforce up to about 14,000 (half of company total, NA operations account for roughly half of Amec's revenue). Mactec then became part of AMEC's Earth & Environmental division (environmental, water resources, infrastructure unit). Mactec gives Amec more business in the Western USA and Canada.

Other Strong Investments in the engineering industry (nyse: MTZ)
MasTec, Inc ! If you live in North America you probably make use MasTec built infrastructure on a regular basis. The company installs and maintains energy infrastructure most notaby that which is used in electrical utility transmission. For the first three months of 2012 calendar year MacTec revenue is up +25.87% quarter on quarter to $778.48 million. However, the bottom line didn't improve (in the quarter net income down -33% to $14M) because the cost of revenue was up +29.5% ($583.91m --> $684.66m). That may be an aberration owing to wildly fluctuating metal prices and other imput costs; The cost of revenue in the March 2012 quarter was at its lowest level in three quarters.

Coal: US, China take different position on coal, Israeli technology making waves in China

Thanks to increasingly hostile coal related US environmental regulation and an oversupply of coal in Asia as well as low natural gas prices, coal prices are near rock bottom. These factors have worked together to not only affect the price of coal but also demand from one of its main customers, utility plants; Traditionally over 45%, coal's share of power generation was at 39% in November 2011, the lowest level since March 1978. What's worrisome about that drop is this, the other main sources of popwer generation were all up (natural gas 22%-->26%, nuclear 20%-->22%, hydro 6%-->7%). What this also suggests is that the growth in renewables ARE NOT making any meaningful contribution to overall production (unsurprising given that their associated total costs of production exceed 20c per kWh, that compares to under 4c/kWh for coal) - not much incentive to shift over if you ask me.

Some are suggesting that it's the low price of natural gas that's causing companies to abandon coal but I say not so fast ! Even with the 49% drop in price (gas) between January and April 2012, per kWh gas there's still not much difference in cost when choosing it over coal. In Canada analysts expect natural gas prices to more than double over the next 1-2 years which would certainly take away any price incentive fueling the shift from coal to gas. (from $2.1/mmBTU April 22 --> $4.5 by 2014); Also keep in mind that while analysts almost unanimously agree that the price of natural gas will rise, the same can't be said of coal.
Natural gas averaged $4.00/mmBTU in 2011 but ended the year at only $2.75, it then fell further down to $1.40/mmBTU by April 19, 2012. Also to consider: The outlook for coal prices is not as good as it is for natural gas.

Greater access to cheap energy is something the United States should be striving for. Cheap energy has become the cornerstone to China's growth model. China's long term demand for coal is growing at around 5-8%/yr meaning that demand from that country will double within a decade (in 2010 China accounted for 48% of global thermal/metallurgical coal demand). Non-OECD Asian countries will account for 95% of the 55% global rise in coal demand by 2035. That trend is in stark contrast to the United States where demand for thermal coal is expected to drop by 5% to 884 million tons (lowest level in 17 years) and where 106 coal-fired plants have shut down in just the last two years directly translating into a 13% loss in terms of MW capacity). Thermal coal accounts for about 60% of US-China coal exports. The major drawback to China's reliance on cheap, nonrenwable energy sources? Well for starters, it is home to 16 of the world's 20 most polluted cities.
Though US coal exports were up +31.3% in 2011 to 107,258,561 tons total US coal production was up only +0.9% to 1,094,336,000 tons. Major contributors to that change were Latvia (142-->163 thousand tons), Japan (3164,098-->6911,539 tons) South Korea (5722,599-->10448,751 tons), India (2722,677-->4500,105 tons), Netherlands (7306,376-->10785,421 tons). Demand from Canada was down -40.0% to 6845,316 tons (in 2010 Canada lone demanded more than all of South America but because of changes in 2011, Brazil now demands about 1.8Mt more than Canada.

Israel and China

Although many renewable sources of energy require technology that's very expensive to build and with less desirable results, a new form of clean energy with relatively low operating costs (1c/kWh) is one that harnesses energy from naturally occurring sea waves. The production costs being only a quarter as much as it is for wind or solar, have attracted Chinese investors keen on bringing it to China. In 2010 the first of a number of Chinese sea wave plants was constructed in Guangzhou by Israeli company SDE. Though it has a capacity of only 1MW it ushers in the first of many such plants (Guangzhou alone will be home to 10000 MW capacity by the time the project is completed).

Facts

-Rock bottom shipping prices (freight) is making it easier for US coal producers to access Asian markets; In 2012 US coal exports to China are expected to double to 12M tonnes.
-Today, freight from the US Gulf of Mexico to China is around $50/tonnes, that compares to the bid price for coal of $102-104.