Coal is Making a Come-back

A relentless increase in world demand for energy, large price increases for natural gas, growing concern about imported energy and security of supply, indecision about nuclear power are all factors which are contributing to the renaissance of coal. Despite the ‘dash for gas’ in the last two decades, coal remains the number two source of primary energy. In 1965 coal accounted for 38.4% of total final energy consumption, by 1999 this had been whittled down to 25.1% but today it has risen to 27.8%.

Production grew 14.3% in the 20 years between 1981 and 2000 but then by 27.1% in total between 2000 and 2005.

This renaissance is taking place in many countries, but by far the most important driver is escalating demand for coal in China, accompanied by growth in India and by continued strong demand in the USA. 79.5% of the growth in demand for coal in recent years has taken place in China.

A vitally important issue is the development of clean coal technology. Coal is the largest emitter of carbon dioxide, a major emitter of sulphur dioxide, nitrous oxide, mercury and particulate matter (polluting ash and dust). Billions of dollars are being invested in the development of technologies to clean emissions, to capture and store carbon and to generate electricity with reduced carbon emissions.

In the last 40 years the global coal market has changed radically. In 1965, the United States was overwhelmingly the largest producer and consumer of coal, accounting for 20% of consumption, followed by the United Kingdom and Germany. The US share increased slightly to 22% but the US has moved from first place into second pace after China. In 1965 China had an 11% share of the global coal market but this had grown to 36.9% by 2005.

It is very clear that coal will remain an essential contributor to the world’s primary energy supply for decades to come. Global coal reserves are vast and widely distributed near to the load centres. Consumption of coal will expand, although more slowly than that of other fuels. Predictions are for an annual increase of 3.5% in natural gas consumption, 2.7% for oil, 2.6% for renewables and 2.2% for coal.

The world’s oil will last for 41 years at current rates of extraction (R/P ratio), gas for 67 years but coal will last for 192 years. The R/P ratio of coal may expand by many multiples if underground coal gasification (UCG) technology is introduced, accessing deeper coal seams.

The IEA forecasts that in 2030 total energy supply will increase from 10.23 billion tonnes of oil equivalent (Btoe) to 16.3 Btoe, of which 35.4% will be contributed by oil, 25.8% by gas and 23.1% by coal. This prediction shows the shares of oil and gas expanding whereas coal’s share will decline. It is difficult to see how these shares can be maintained for oil and gas with their current R/P ratios, while total energy supply expands about 20% every ten years. For coal, however, this is eminently possible and using clean coal technology, it can be done while meeting environmental goals. It becomes even more feasible with UCG expanding coal reserves.