Resiliency of coal???

Chris Briem over at Nullspace pointed Dan Gross of Slate towards an interesting obscure economic indicator, the price of coal coming out of the Big Sandy River. This is the eastern US spot price of coal that fills the marginal demand that is not covered by long term power plant, coke and steel mill contracts. The spot prices reflect marginal demand, what buyers need or want beyond the amounts contracted for. And these prices have been spiking. This chart shows that Central Appalachian Coal Futures are up 59 percent this year—to $63 per ton—and that the price has doubled since July 2003..... Why is this obscure economic indicator rising, and what does its rise tell us? The recent rises seem to be more about growing demand than concerns about supplies. Ironically, the rise in spot prices for U.S.-produced coal has come at a time when the supply of the commodity seems to be growing coal is one of the few areas where rising global demand for power and electricity plays to the United States' advantage. America may largely be a helpless victim of the continuing global rise in demand for crude oil, but when it comes to coal, we're more like Saudi Arabia. In 2001, the United States, according to this chart, produced more than one-quarter of the world's bituminous coal supply. And America is a swing supplier of coal to the rest of the world, which means that when demand is greater than anticipated, extra cash flows into our coffers. U.S. coal exports rose 11.6 percent in 2003. The Wall Street Journal (via John Robb)notes that Chinese industrial and electrical demand is forcing a significant run up in coal prices as China is shifting from being a major coal exporter to a major coal importer: But in the first half of last year, it imported more than it exported for the first time....Chinese coal demand grew nearly 9% last year, raising its share to a quarter of the world's consumption. According to the China Electricity Council, China's power-generating capacity rose by 18% just from last July to December, most of it fueled by coal. How resilient is the coal production, distribution and consumption networks when compared to the similiar questions about petroleum networks that have been under systemic pressure for the past couple of years. I think the greatest area of difference between the two commodities is that the major coal producers, and especially the swing producer is much more politically stable and internally cohesive than Saudi Arabia and other OPEC members. Iraq right now is a significant fraction of the world's supply buffer and that buffer is miniscule in relationship to demand while a significant fraction of world's surplus supply of coal sits in Wyoming. Furthermore coal has fewer brittle and linear single points of failure. Rail lines are the dominant coal transportation systems, but there tends to be more near substitutes in river barges and trucking within the major supply regions. Pipelines are more fragile with less network density to cover the need to switch flows away from breaks caused by attack or accident. Furthermore, coal seems like it needs less processing for most uses (coking is an exception) so there are fewer intermediate steps in the value chain compared to the need to refine almost all crude oil into usable end products. However both still require massive central consumption facilities that distribute their intermediate and end products via the electrical grid, so this is a potential common point of failure. This is just speculation on my part, but the risk and resiliency of coal seems to be a little less than petroleum so a black carbon OPEC is far less likely to form than the probable and implict shadow OPEC. What do you think?