“You can’t just turn on the spigot,” says Jim Grech, chief executive of Peabody Energy, America’s biggest coal miner. Customers in Japan, Korea and Taiwan are pleading with Peabody for additional shipments, Grech says, so they can avoid energy shortages by switching more power generation to coal instead of natural gas..

While he says he’d love to help all the power plant operators in Asia looking to replace missing cargoes of liquefied natural gas trapped behind the Strait of Hormuz, Peabody is already running its mines in New South Wales, Australia at full tilt. “You need more crews, more equipment digging,” he says. “There’s no quick upturn in production.” A multi-year expansion is already underway at Wilpinjong Mine where it’s doubling production to 10 million tons per year by 2030. Peabody also produces 3.5 million tons a year at the Wambo mine JV with Glencore, and is ramping up its Centurion metallurgical coal mine. (Nearly all the Aussie coal is sold to power plants in Japan, India, Philippines, Korea, Taiwan and Vietnam.)

Northeast Asia had been reducing reliance on coal in favor of shipments of cleaner burning natural gas in recent years. But suddenly they are in the market for millions of more tons per year. “The world, as they run into energy security problems, turns back to coal,” says Grech, 59, who was named chairman of President Trump’s National Coal Council, in January. “There’s no other options.” Japan is moving to relax restrictions on coal generation; Taiwan is set to restart its Hsinta coal plant; Korea lifted anti-pollution caps; and India has ordered coal plants to hurry up and finish spring maintenance so they can be ready for a heavy load when the gas runs out. Even Europe is considering resurrecting mothballed plants.

With Qatar warning it might take years to get its LNG exports back to normal, traders have bid up coal prices by 20% in the past month to $150 a ton for Australia’s benchmark Newcastle export grade. How high could it go? “If this conflict continues longer than May, the stars could align for $200 a ton coal,” says Tony Knutson, head of thermal........

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