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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Dennis Roth who wrote (124445)	9/30/2009 9:16:51 AM
From: Ed Ajootian	2 Recommendations Read Replies (1) of 206181

This CS piece has a great discussion of the btu-equivalent prices of coal vs. natty. As shown there, the breakeven price for natty vs. coal is just under $4.20/mcf for all areas other than central Appalachia. With the near-month natty futures contract trading significantly higher than that price ($4.74 as we speak), it raises the question of how much of a big deal it might be for the power generators to switch those coal plants back on. Does anybody have a feel for this? My hunch would say that they would want to make damn sure that they were going to keep the coal plant going for awhile before turning it back on. According to CS the switching from coal to natty has accounted for 2-3 BCFD of natty demand.

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