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Peak Coal - Coming Soon?
Posted by Chris Vernon on April 5, 2007 - 1:15am in The Oil Drum: Europe
Topic: Supply/Production
Tags: china, coal, peak coal, teqs [list all tags]
The general consensus view on coal supplies has long been that we have hundreds of years of the stuff left, and that oil and gas depletion are the pressing concerns. However, dissenting voices are emerging. Canadian geologist David Hughes recently claimed that "peak coal looks like it's occurred in the Lower 48 (US states)", and the consensus position on coal is also called into serious question by the Coal: Resources and Future Production report soon to be released by the Energy Watch Group in Germany. I present a summary of its findings here.
[Update 04/04/07]
The final version of the Energy Watch Group report was published today and is available at:
http://www.energywatchgroup.org/files/Coalreport.pdf
In particular greater detail has been added regarding future US coal production, noting that the US has now switched from being a net exporter to a net importer of steam coal and arguing that total (volumetric) US coal production will peak between 2020 and 2030.
It is also noted that only 15% of coal produced globally is exported, the rest being consumed domestically, with Australia is responsible for almost 40% of global coal exports.
Finally, certain of the figures in the report have been revised, and so these have been revised (and marked as such with endnotes) in the below summary. These revisions do not change the overall trends.
Reserves
The report highlights that the "proved reserves at year end" published in the most recent BP Statistical Review of World Energy in June 2006 are stated as being for year end 2005, but are actually based on the latest World Energy Council (WEC) assessments, which contain data for the end of 2002.So our best figures on this are actually over four years old. And our worst figures? Well, some haven’t been updated in 15 years (China) and some in up to 40 years (Vietnam, Afghanistan).
But really the key message in the global data lies in the rate at which reserves estimates have been revised downwards. As Peak Oilers well know, conventional wisdom has it that reserves will increase as more exploration takes place and prices rise. Yet, in truth, estimates for global coal resources have been consistently revised down, and by 55% over the past 25 years, from 10 trillion tons hce (hard coal equivalent) in 1980 to around 4.5 trillion tons hce in 2005 [1]. Certain countries (including Germany and the UK) have been revised down by over 90% in this period. The UK reported proved recoverable reserves of 45bn tons in WEC 1980 [2], but these were continually revised downwards to reach only 0.22bn tons by the latest report. Cumulative UK production in this period amounted to only approx 1.8bn tons.
Even Poland, the biggest coal producer in the EU, reports reserves revised down by 50% over the last 10 years. Since production alone cannot explain such revisions, they are deemed likely to be due to improvements in data. The chief exceptions to this rule are India and Australia, both showing significant upward revisions, but as we have seen the global trend is firmly downward. Only South Africa shows continuously shrinking reserves roughly in line with cumulative production. Globally, the report concludes that data quality is very poor and that these downward revisions must be expected to continue.
China
So back to China, the world’s largest producer, with the fourth largest reported reserves globally. The 2006 Statistical Review of World Energy credits China with 55 years of remaining reserves at current production rates (depleting its reserves at almost 2% per annum). But as previously mentioned, the Statistical Review faithfully reproduces proved reserves figures which were last changed in 1992 (note that China’s cumulative production in the 15 years since comes to about 20% of those stated reserves), so we can knock 15 years off that number straight away, reducing the remaining total reserves to 40 years’ worth. The Energy Watch Group report gives projected production profiles showing that China is likely to experience peak coal production in the next 10-15 years, followed by a steep decline. It should also be noted that these production profiles do not take into account uncontrolled coal fires which – according to satellite based estimates – add around 5-10% [3] to regular consumption. Since China’s production dwarfs that of any other country (being almost double that of the second largest producer, the USA) the global coal production peak will be heavily influenced by China’s production profile.Types of Coal
Now, before I outline the situation in the USA, which comfortably holds the world’s largest reserves of coal, it may be instructive to distinguish the different types of coal. There are four basic types, starting with the most energy-rich – anthracite (about 30 MJ/kg), bituminous coal (18.8-29.3 MJ/kg), sub-bituminous coal (8.3-25 MJ/kg) and lignite (5.5-14.3 MJ/kg). Those towards the anthracite end of the scale are often termed ‘hard coal’, and those towards the lignite end of the scale as ‘soft coal’, although the exact definition of these terms varies. The softest coals are sometimes termed ‘brown coal’.USA
The USA, then, as we have all heard, has reported proven coal reserves that would allow continued production at current rates for more than 200 years. Three federal states (Wyoming, Montana, Illinois) hold about 60% [4] of US coal reserves, but the low production rates relative to reported reserves in Montana and Illinois cast some doubt on the reliability or suitability of those reported reserves. As many of these reserves are of low quality, with high sulphur content and/or other drawbacks, it may be considered doubtful that they will ever be produced. Measured in terms of produced tons per miner, US productivity steadily increased until 2000, but has declined since, which also implies that ‘easy coal’ is running short.The USA had passed peak production of anthracite (by far the rarest form) by 1950 and peaked in bituminous coal in 1990, but sub-bituminous coal more than made up for this decline in terms of tonnage. However, due to the lower energy content of softer coals, the total energy content of annual US coal production peaked in 1998.
Global Picture
So, having looked at the world’s biggest coal producer and the holder of the world’s biggest reserves, we may perhaps turn our attention to the global picture.Six countries (USA, Russia, India, China, Australia, South Africa) hold about 85% [5] of world coal reserves, when this is measured in terms of energy content. According to the latest assessment by the WEC, total world reserves at the end of 2002 stood at 479bn tons of anthracite and bituminous coal, 272bn tons of sub-bituminous coal and 158bn tons of lignite.
According to the Energy Watch Group, global coal production can increase for 10-15 years (mainly driven by China), but then production of anthracite and bituminous coal will peak around 2020 at a production rate around 30% higher than at present. Lignite production is predicted to peak somewhere between 2050 and 2060. However, as the quality of coal produced will be declining continuously the world coal energy peak is projected to come around 2025. It is also important to note that ‘peak coal exports’ should come even earlier, as lower-energy-density coals are not worth transporting long distances.
When we compare this with the scenarios (represented by the dashed and the solid line) from the IEA’s 2006 World Energy Outlook (WEO) we get the following graph:
Click to Enlarge
As we can see, according to this report the WEO reference scenario is unrealistic, and only the production in the WEO alternative policy scenario (which assumed political measures constraining coal due to fears over greenhouse gas emissions) is actually feasible. The Energy Watch Group’s report, however, is not considering potential policy constraints, and is describing only what production may be physically possible.
I must stress that one of the key findings of this report is that data quality is very poor globally, and so all of the findings should be taken with that caveat, but the trends do seem clear. Indeed, we sent a copy of this report to Richard Heinberg and he has revealed that a Dutch study-in-progress using different criteria has reached preliminary results confirming this report’s findings. And the poor data quality is itself hardly reassuring for an energy source which is becoming increasingly central to our global future.
This report clearly carries many serious implications, but for now I’ll just share the information and leave these to be discussed on TOD. Further analysis of the report has also recently been released in Heinberg’s March MuseLetter.
---
[1] Revised from 4.2 trillion tons in draft report to 4.5 trillion tons in final version.
[2] Revised from 145bn tonnes to 45bn tonnes. This was my error. WEC 1980 listed 145bn tonnes as the estimated additional resources for the UK. 45bn tonnes was the listed “proved reserves”.
[3] Revised from 10-20% in draft report to 5-10% in final version.
[4] Revised from “over 70%” in draft report to 60% in final version.
[5] Revised from 90% in draft report to 85% in final version.
Thanks for this Shaun.
I’d just like to add that these projections seem to be close to those made by Jean Laherrère. He expects Peak Coal by 2050 in terms of volume; that gives an energy peak not far from that presented here.
My thanks too Shaun - it's a very interesting perspective you've provided.
Three aspects in particular seem to me worth noting in response -
1st, the profiteers of the fossil fuel trade will, very likely,
be delighted to apply this info, along with that on Peaks in Oil & Gas supply,
as disinformation to further deride the dangers of Climate Destabilization. --- C'est la vie . . . .
2nd, we have to cap (intentionally peak) global GHG emissions within a decade
if we are to have an even chance of avoiding the GW feedback loops swamping the planet's carbon sinks -
[aka "the Runaway Greenhouse].
Thus the geological peak of coal production must be pre-empted by a binding legal peak.
3rd, the highly credible notion of Tradeable Energy Quotas, as a means of constraining energy usage within a country,
begs the seminal question of just how such quotas (aka declining emission entitlements)
are to be allocated swiftly and reliably across the nations ?
Plainly, in the absence of that international framework, nothing significant has happened
(or is likely to happen) at national level re cutting fossil fuel usage.
The only credible policy framework I've seen for allocating those national entitlements
is that of "Contraction & Convergence," as advanced by Global Commons Institute. [ www.gci.org.uk ]
If you can spare the time, I should be very interested to to read your views on the potentials of that policy framework.
Regards,
Backstop
There's something fishy about the graph "possible worldwide coal production."
The FSU looks to have dramatically higher future production than the US. Is it possible that the authors switched the headings for US & Russia? If so, that is a fairly major error, eh?
The FSU (Former Soviet Union) is more than just Russia, also including the Ukraine and Kazakhstan. When the full final report is released (Wednesday I believe) the details behind that graph will be made clear in detail.
Great post Shaun
There is much talk about "clean coal technology" that may come on stream in the next ten years or so. This will not be without cost and I suspect that a greater amount of coal will be needed to compensate for the energy input into whatever that technology is.
Does this report take this into account, or is it based on existing usage methods? If not and 120% (say) of current requirements are needed to clean up coal usage, then peak will occur 5-10 years earlier.
The Energy Watch Group report is discussing coal production only, not the uses it will be put to. As you say 'clean coal' has a substantial energy cost, which will only exacerbate any production limitations.
I'm actually preparing a report on 'clean coal' and Coal-to-Liquids technology that should be up on the soon-to-be-relaunched Lean Economy Connection website soon.
Backstop, I basically agree with everything you say! If you read our booklet on TEQs you'll see that the scheme is specifically designed to sit within an international framework like C+C (and yes, C+C is the most sensible international framework I have yet seen suggested).
I had a very productive conversation with Aubrey Meyer a few weeks back, who agrees that C+C will need capped tradable quotas like TEQs at a national level in order to guarantee meeting individual nations' targets under C+C. And as you point out, TEQs also needs C+C.
The third strand of the solution is of course at the individual and local level, where the actual emissions reductions take place, supported by the TEQs framework. In this regard, the rapidly-growing Transition Towns movement is a great example.
Interesting post. Have you looked at the fact that, at least in the US, these 'peaks' are really demand driven? Anthracite is used for steel production isn't it? It would make sense that we use less of it as steel production in the US declined. Hasn't natural gas, at least since the early 90's and wind power over the last few years been the primary sources of newly installed electricity production?
I will have to look at the ideas of these 'dissenting voices' more carefully, but I am very sceptical that any of this is true. Lets not get carried away with these 'peak' claims.
I agree that we should not get carried away with peak claims. They should be dismissed with comprehensive studies and not CERA type claims... Keithster100 are you volunteering to perform such a study? If not, then simply dimissing things out of hand is, say we say, disingenuous.
True, like I said, I would need to do more research.
As far as volunteering, how do you get to post the initial editorial rather than just be a comments-poster? If given a shot, I would love to write one about ethanol.
I think it's time for another major post about ethanol. I believe you would be on the pro ethanol side. Is that correct? I am especially interested in a recent study done by Colorado State University and the USDA concluding that major greenhouse reductions can occur with the use of corn ethanol and even more significant reductions with the use of the grasses.
Of course, if you are on the pro ethaonol side of the issue, you will get a great deal of interest on the rebuttal side, especially regarding the impact on corn prices, food prices in general, soybean production, and the push by farmers to use lands currently set aside for conservation. Frankly, I am still mystified by the allegation that not much concern should be placed on higher food prices, but am interested in hearing a good explanation of same.
Tangentially speaking, our farm policies and subsidy policies favor things like corn and soybeans to the exclusion of products like fresh vegetables. I think this policy just aids poor health, diabetes II, and overweight. As a vegetarian who really doesn't want to indirectly subsidize the beef, pork, and chicken industries, I feel discriminated against.
Anthracite production peaked decades ago. My father-in-law is a retired VP of CONOCO, having been a VP of CONSOL (Consolidated Coal) when they were acquired by CONOCO back in the early 1980s. (They later sold off CONOCO but they may be regretting that now.)
Anyway, he loved to point out that anthracite had peaked and no amount of economic incentives would change that. There just wasn't that much more of the stuff left. He's a mining engineer by training and spent many years working his way up through CONSOL's ranks.
And coal use is still high in the US. We use it as a large fraction of our electrical power generation, which has only increased steadily over time. The fraction used in steel production was tiny anyway by comparison.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Keithster thank you for making the Very Good Point here about the "above ground factors" like politics and economics constraining coal production - especially in the US.
I wonder what will happen to the politics (e.g. glOBaL warMiNg) and econonomics (eg. "use coal ?!?!- oil is cheap and plentifuyl right now") as Energy Desperation grows and we begin Fuel Twitching???
What happens to the PrOjECteD COAL supply, demand, production etc when the Hordes of industries and of consumers try to switch from oil and ngas-based energy to electric or coal gas or whatever???
Watch out for blind, angry Masses-O-Saps flailing about and gibbering madly, "Fuckin' BUSH!" , spittle flying to and fro... I imagine a Stephen King novel is about to come to life ;)
(PS. I'd love to see Keithster do a Ethanol column).
The US hasn't really peaked in coal production. There was a false peak in the late 90's that related in large part to the emphasis on building NG electric plants, decreasing coal demand. 2005 broke the previous coal production record, and 2006 topped the 2005 mark by another 2.5%. The demand just wasn't there until recently with the rise in NG costs.
http://www.commodities-now.com/content/market-news/market-news-200701094...
It should also be noted that in the U.S. the main reasons for downward revisions to coal reserves are 1) the clean air and water act and 2) the very low price coal had been fetching until recently. #2 has already changed stimulating greater production, and it's questionable how strong the U.S.'s resolved will be regarding #1 after oil peaks.
"As many of these reserves are of low quality, with high sulphur content and/or other drawbacks, it may be considered doubtful that they will ever be produced."
New mines are opening in Ohio for the first time in decades and several mines in Ohio have reopened after being closed for over 20 years bc/ with the higher coal prices, it is now economic to mine this coal and spend the money on special scrubbers to remove the sulfur. Certainly a lot of coal will never be economic due to the cost of and energy required for extraction, but the sulfur/ pollutant problems (save CO2) is not an insurmontable hurdle.
"it is now economic to mine this coal and spend the money on special scrubbers to remove the sulfur."
It's even easier with an inattentive CLEAN AIR ACT state/fed. admin. Sometimes, ex post facto, the special scrubbers are prompted by lawsuits from neighboring states
http://www.ct.gov/ag/cwp/view.asp?A=1778&Q=284042
The suggestion was that America had peaked in coal energy. with the more recently mined coal being of lower energy per tonne and even lower net energy tonne.
Exactly. That is the key.
Keithster100, the final version of the Energy Watch Group report will be released online next week, and will contain substantial discussion of the possible reasons for such US peaks. I was just providing a brief summary of their findings, so you should be able to take a more careful look very soon!
Like Keithster 100, I will venture an opinion without doing any research. Anthracite is not used for steel production because there isn't enough of it. The coke for the blast furnaces is produced from bituminous coal.
Phineas Gage and I commented on this story when Leanne cited the link to Heinberg's comment on it on the March 22 Drum Roll. I think that our comments bear repeating.
Jeff and Phineas are you talking of volume or energy? The article doesn't claim a US peak in terms of volume.
I was referring to volume. I can't find the original data referring to the energy peak from coal. Can anyone provide a link?
I am suspicious of claims that coal is near peak in the US bc/ we just really haven't been trying very hard lately. A new coal mine had not opened in Ohio in decades until just now. vtpeatnik notes below that illinois coal production dropped 50% due to high coal. Wyoming Coal is transported all the way to Ohio and WV despite high coal reserves here. The only reason, frankly, is sulfur (and sometimes mercury and other heavy metals). Although not much coal around here (Ohio/ WV) can be open pit mined anymore, it's not that it's too hard or expensive to get it out of the ground, it's the sulfur. As I've noted, it is now economic to mine the dirty coal and remove the sulfur. Coal will likely increase in price, making the exploitation of high sulfur appalachian coal even more enticing.
My fear is that people might get a false sense of security that if there really isn't that much coal after all, we need not worry about the environmental effects. I'll be the one breathing the SO2 and filtering the heavy metals out of my water. Coal resources will once again become important as world oil and US NG peak, and we need to be very judicious in using it.
The quote from my article above is:
"The USA had passed peak production of anthracite (by far the rarest form) by 1950 and peaked in bituminous coal in 1990, but sub-bituminous coal more than made up for this decline in terms of tonnage. However, due to the lower energy content of softer coals, the total energy content of annual US coal production peaked in 1998." (emphasis changed)
The original data will be in the final Energy Watch Group report when it is released next week (I will update my summary with a link to it when this happens). Apologies if my summary has got you keen to get into analysing data which isn't quite yet available, I was just whetting the appetite!
As I mentioned in another reply, the possible reasons behind the US figures will be discussed in more detail there.
And may I echo your fears about a false sense of security. With current practice, a scarcity of high-yield energy resources just means that dirtier lower-yield energy resources will be exploited.
Apparently Illinois coal production fell by 50% becasue it is higher in sulphur than Wyoming coal and difficult to scrub. The hope is that with coal gasification and IGCC, this will not be a problem and will in fact lead to industrial sulphur production.
- I thought that there is already a surplus of sulfur, and it is growing due to the refining of "sour" (high-sulfur) oil. I suppose one can get rid of excess sulfur somehow, but the methods are either environmentally destructive or cost energy. (Same for "scrubbing" and burying the CO2.) EROI anybody?
I'd have to look it up to be sure, but probably any additional sulfur production would be near worthless now. As manufacturing and chemical production is offshored, less and less sulfuric acid is needed.
Aren't there some new battery chemistries based on sulfur, with energy densities high enough to be interesting? High-temp sodium-sulfur for stationary applications, and aluminum-sulfur for portable apps? Seems like an area where one might expect the coal and oil companies to put some research bucks, in hopes of creating a market for that surplus sulfur.
The David Hughes analysis appears superficial. He notes that the US imports coal, but omits that this is a small, regional thing similar (in concept, though not in size) to the eastern canada oil import situation, and that the US exports much more than it imports.
How much do peak coal calculations depend on peoples willingness to let large stretches of countryside be turned into moon landscapes?
Excellent point. Mountain top removal is the ultimate fouling of the nest. Yet it is accelerating, because greed was declared to be good a while back. "Stockholders for the Southern Company or Peabody Energy aren't interested in underwriting efforts to maintain a stable climate [or in preserving the natural world]. They're interested in maximizing the return on their investment."
That is a quote, with my addition in brackets, from the fine book by Jeff Goodell, "Big Coal" (2006). He discusses coal reserves, indicating that the 250 year supply often claimed for the US may be inflated by about 200 years.
I've been doing a lot of focused research on the Chinese coal industry and have been coming to the same conclusion. The growth path they are expecting now (lower than recent growth rates, but not including the additional demand that CTLs would bring) will put them at the half-way point of extraction of their remaining recoverable reserves somewhere around 2017-2019. Though it may not be a production peak, certainly extraction costs will rise significantly. Less than half of China's remaining reserves are bituminous, so to deliver the same energy, production will need to rise even further as they exploit sub-bituminous and lignite reserves.
Chinese data assert remaining reserves in the hundreds of billions of tonnes, but the recovery factor is only about 30%, so must be discounted.
The problem is, China has few options to move away from coal to any degree. Their much-vaunted nuclear expansion to 40 GW will displace only about 100 million tonnes of coal, compared to the 2.3 billion tonnes they consumed in 2006. Natural gas is similarly constrained--to offset 250 million tonnes of coal for power generation, for example, they would need to import an additional 100 bcm of gas beyond the 100 bcm they will need to import by 2020. LNG and pipeline gas from Russia and Central Asia simply can't supply that amount in the next 15 years. So China is going to be in a bind different from the US, where our falling natural gas production is pushing us more to coal, while China is trying to find a way to move away from coal.
A reserve is by definition, Sparaxis, something that can be produced. China's 150 million tonnes of reserves are thus already calculated on the basis of the 30% recovery factor. Considering that the more technically advanced U.S. mining sector averages a 60% recovery factor it would be surprising if the Chinese did not improve this over the long term. Or they could just assess and measure more of their estimated 5 trillion tonne resource base to see how much is economic to mine.
Thanks for that Sparaxis - I've been following your well-informed and insightful posts on TOD for a while. I look forward to hearing your thoughts on the full Energy Watch Group report when it is released next week. One annex of the report deals exclusively with Chinese coal resources and production.
Obviously, there is a huge amount of genuine uncertainty in connection with even the basic issues regarding coal reserves; this is true also (albeit to a lesser extent) regarding natural gas. The contrast with oil is pretty stark here, as I think most who visit here on TOD would concur that the oil situation is by now pretty well understood.
Perhaps what this means is that TOD should consciously shift its focus toward natural gas and coal in the future, in the form of publicising and analyzing every scrap of publically available information so as to develop a systematic, detailed, and relatively certain picture - as has already been done for Peak Oil.
Just my two-cents worth - for what it's worth as a humble poster without any real expertise in any of these matters.
"Perhaps what this means is that TOD should consciously shift its focus toward natural gas and coal in the future,"
Chip in my two-cents worth too... especially on natural gas.
Maybe TOD can "out" two more Mass energy Delusions. Then we can wait to see how long it takes for the Dead Carp on Cablevision to inform the masses.
Predicting a peak of underexplored resource, long before it has experienced any kind of geological constraints is a fools game. Even Hubbert managed to predict US oil peak mere 10-15 years before it actually occured (in 1956 he predicted it for 1965-70) - using data with quality orders of magnitude higher than what we have for coal and even for oil (worldwide) today. And again he was not quite right - he underestimated reserve growth and only the fact that supply growth was higher than what he was expecting helped his prediction of the timing of PO in US to be about right.
The thing is that what we call "coal reserves" now has not been tested against extensive research and development. For all practical purposes coal is "enough" for everyone, and there is harldy an incentative for miners to even try to improve the quality of data. The bottom line is that we can not possibly know about impending coal peak at this point. I expect it will be like oil - we will start recieving signs for this 5 or 10 years prior to the event - only after everyone has been exploring for coal and "digging dry holes" for many years. Given such circumstances predictions for "peak coal", "peak uranium" or "peak whatever" I find highly speculative and, IMHO, absolutely irresponsible. As history shows crying wolf and being wrong over and over again is the best way to ruin your credibility and compromise the whole message at all.
But why is it not at least IN PRINCIPLE possible to obtain thorough and accurate data on this question, and to make reasonable predictions about Peak Coal based on being knowledgeable about what was required to extract it in the past under given conditions?
Well in principle it is possible, but like everything this costs money. And the additional explorations which will allow us to determine the ultimate size of the resource will cost huge money. At this point it is my understanding that coal is simply too cheap and abundant to be worth this effort.
Of course some areas like UK or Germany are relatively well explored but this is hardly the case for the most important coal producers - China, USA, Australia, Russia, South Africa etc. - and these account for over 90% of the world production.