Peak Coal: Coal Production Projected to Decline

The 50% of U.S. ratepayers whose electricity is generated by coal had best plan for steeply higher electricity prices not far down the road, and they as well as the rest of us need to be thinking of how we will cope when the fuels we depend upon for 63%-coal and gas- of our power are in steep depletion.

Recent reports indicate that coal may not be so plentiful as originally thought, and that not only to we not have a "200-year" supply, but that coal production may go into terminal decline within a few years.

This may seem improbable to a lot of people. The United States is the second-largest coal producer in the world, and 48% of the electricity in this country is generated by coal. Moreover, this has been the cheapest way to generate power to date, even though it carries environmental hazards and costs that we now know we can no longer bear. Coal is surely the dirtiest method of power production ever, and the cost of building a coal plant with necessary pollution controls equals or exceeds the cost of building a conventional nuclear plant with the same generating capacity.

While consumption of all fuels in this country have dropped slightly due to the current steep economic contraction, global consumption of coal is increasing rapidly, with China and India being the largest consumers. The demand for electricity by these two most populous countries in the world will only increase as they continue to industrialize and more of their citizens aspire to Western lifestyles.

According to Richard Heinberg at The Energy Bulletin:

"future scenarios for global coal consumption are cast into doubt by two recent European studies on world coal supplies. The first, Coal: Resources and Future Production (PDF 630KB), published on April 5 by the Energy Watch Group, which reports to the German Parliament, 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 report's authors (Werner Zittel and Jörg Schindler) note that, with regard to global coal reserves, "the data quality is very unreliable", especially for China, South Asia, and the Former Soviet Union countries. Some nations (such as Vietnam) have not updated their proved reserves for decades, in some instances not since the 1960s. China's last update was in 1992; since then, 20 per cent of its reserves have been consumed, though this is not revealed in official figures.

However, since 1986 all nations with significant coal resources (except India and Australia) that have made the effort to update their reserves estimates have reported substantial downward revisions. Some countries - including Botswana, Germany, and the UK - have downgraded their reserves by more than 90 per cent. Poland's reserves are now 50 per cent smaller than was the case 20 years ago.

These downgrades cannot be explained by volumes produced during this period. The best explanation, say the EWG report's authors, is that nations now have better data from more thorough surveys. If that is the case, then future downward revisions are likely from countries that still rely on decades-old reserves estimates. Altogether, the world's reserves of coal have dwindled from 10 trillion tons of hard coal equivalent to 4.2 trillion tons in 2005 - a 60 per cent downward revision in 25 years.

China (the world's primary consumer) and the US (the nation with the largest reserves) are keys to the future of coal. China reports 55 years of coal reserves at current consumption rates. Subtracting quantities consumed since 1992, the last year reserves figures were updated, this declines to 40 to 45 years. However, the calculation assumes constant rates of usage, which is unrealistic since consumption is increasing rapidly. Already China has shifted from being a minor coal exporter to being a net coal importer. Moreover, we must factor in the peaking phenomenon common to the extraction of all non-renewable resources (the peak of production typically occurs long before the resource is exhausted).

The EWG report's authors, taking these factors into account, state: "it is likely that China will experience peak production within the next 5-15 years, followed by a steep decline." Only if China's reported coal reserves are in reality much larger than reported will Chinese coal production rates not peak "very soon" and fall rapidly.

The United States is the world's second-largest producer, surpassing the two next important producer states (India and Australia) by nearly a factor of three. Its reserves are so large that America has been called "the Saudi Arabia of coal". The US has already passed its peak of production for high-quality coal (from the Appalachian Mountains and the Illinois basin) and has seen production of bituminous coal decline since 1990. However, growing extraction of sub-bituminous coal in Wyoming has more than compensated for this.

Taking reserves into account, the EWG concludes that growth in total volumes can continue for 10 to 15 years. However, in terms of energy content US coal production peaked in 1998 at 598 million tons of oil equivalents (Mtoe); by 2005 this had fallen to 576 Mtoe."

Here we have it: all fossil fuels are in decline or soon will be, and as they deplete, prices will trend sharply upward, and everything we do, make, use, and buy will become more expensive. Much more expensive.

While the fossil fuels that we're so heavily dependent upon deplete, our demand for electricity will most likely increase, especially if we electrify a substantial part of our transportation- and we will most likely have to do exactly that if most of the population is to have access to motorized transportation in the decades ahead as oil supplies become more unreliable and expensive.

Fortunately, there is nuclear, and here in Illinois we can be grateful that 50% of our power is generated by it. Generation 3 cold water reactors incorporate great improvements in safety and are now extremely safe, and can be built much more cheaply than the early essays in the craft, because of increasing standardization of design and mass production of parts. Additionally, newer nuclear technologies have the potential to extend the fuel cycle many hundreds of years beyond the horizons of our limited supplies of U235, while making use of spent nuclear fuel and thus reducing or altogether eliminating nuclear waste.

However, the future of nuclear in Illinois is very uncertain, thanks to the ill-considered moratorium on the construction of nuclear power facilities until the permanent storage of nuclear "waste" (more on that later) is "solved and the current emphasis is on coal-fired generation. A 600-megawatt "clean coal" plant is planned for Taylorville, Illinois, and the Illinois House of Representatives in May passed a bill that would require utilities and power marketers to buy 5% of their power from such facilities. The bill will go to the Senate this fall.

Will Illinois, the crucible of civilian nuclear power and the state most dependent upon it, resume its place as a leader in the development of nuclear, or will we make all the wrong choices and wed ourselves to fatal dependency on rapidly depleting fossil fuel resources, or on "renewables" such as wind and solar, that provide power only intermittently and at a cost that will render regular electic power unaffordable to 50% of the population? Decisions being made now will take generations to reverse, for generating equipment is extremely expensive, and plants being built now will have to serve for at least 40 years. The decision to eschew nuclear in favor of coal could condemn Illinois to increasing economic marginalization and deterioration, complete with further loss of manufacturing and commerce and vaulting poverty rates- and little hope of reversing those trends in our lifetimes.