Coal’s Future in Doubt

Source - MuseLetter Special Update, May 10, 2007

MuseLetter #179 (March, 2007), “Burning the Furniture” http://globalpublicmedia.com/richard_heinbergs_museletter_179_burning_the_furniture consisted of a summary of the conclusions of a recent study by the Energy Watch Group (EWG) on future global coal supplies. That study, “Coal: Resources and Future Production,” www.energywatchgroup.org/files/Coalreport.pdf published on April 5, found that global coal production could peak in as few as 15 years. This astonishing conclusion was based on a careful analysis of recent reserves revisions for several nations.

The EWG report has enormous implications for climate change, global energy, and particularly for future electricity supply and steel production in the US and China.

“The Future of Coal,” a study by B. Kavalov and S. D. Peteves of the Institute for Energy (IFE), prepared for European Commission Joint Research Centre, is ready in final draft and will be published within days.

The three primary take-away conclusions from the new coal study are as follows:
- “World proven reserves (i.e. the reserves that are economically recoverable at current economic and operating conditions) of coal are decreasing fast….

- “The bulk of coal production and exports is getting concentrated within a few countries and market players, which creates the risk of market imperfections.  –

- “Coal production costs are steadily rising all over the world, due to the need to develop new fields, increasingly difficult geological conditions and additional infrastructure costs associated with the exploitation of new fields.”

In the course of their discussion, the authors highlight some of the same problems noted in the EWG study having to do with differing grades of coal and the likelihood of supply problems arising first with the highest-grade ores

TM2.0 Comment – One consequence will be that energy produced from coal will be increasingly expensive at the same as the twin peaks of supply and demand are pushing up the price of oil. Much of today’s massive investment in coal generation plants is therefore liable to be wasted, and the considerable extra money for expensive carbon sequestration will not be available.