The Chinese Coal Monster - a comment from Jean Laherrere. A few days after my post on The Chinese Coal Monster was published I received an email from Jean Laherrere with the following charts and some comments: One of the puzzles addressed in the original post was the fact that BP data showed Chinese production and consumption to be broadly in balance making it difficult to explain reports of surging coal imports. Jean's main point is that EIA data provides a different picture to that provided by BP and that the BP data are likely wrong. It is very important to know that China is importing much more than in the past. In the above graph, with EIA data, it is a cliff, while BP data show a plateau.
JL The EIA and China year book figures show China plunging from net exporter (positive numbers) to net importer (negative numbers) of coal. Visualizing Asian Energy Consumption. Coal's Terrible Forecast. There are many unfortunate outcomes to Peak Oil. One of the more serious is the world’s transition back to coal. Expensive BTU from crude oil has influenced the energy adoption pathway of the Developing World for ten years now, pushing the five billion people in the Non-OECD towards coal. My work has documented this shift for some time. But, I have paid less attention here at Gregor.us to the effect this paradigmatic change will have on our climate. In this week’s release of the EIA’s International Energy Outlook, I found the following graph, projecting carbon emissions out to 2035.
While I generally applaud the EIA for recognizing, in the past few years, the tipping of world energy consumption back to coal I find incongruity in the agency’s other coal forecast: coal’s future contribution to primary world energy consumption. The flaw in this forecast? –Gregor. Coal demand: Asian juggernaut continues to roll. Year 2012 is shaping up to be another year when the developments in the Pacific Basin will be the key determinants of coal demand. With US demand muted by low gas prices and EU demand kept in check by expansion in ren.. 12 Sep 2011 Commodity OnlineYear 2012 is shaping up to be another year when the developments in the Pacific Basin will be the key determinants of coal demand. With US demand muted by low gas prices and EU demand kept in check by expansion in renewable generation and poor macroeconomic prospects, Asia will be the sole source of market impetus, says Barcalys in a report.
Asia is something of a mixed bag for the market, with 2012 possibly heralding the beginning of a period which sees Chinese import demand starts to fall. The issue is not really a lack of incremental demand as the robust build out of coal-fired generation continues apace with another 300 GW being scheduled to be commissioned in the period between 2011 and 2015 – adding around 570 mt of demand by 2015.
Why America needs to move beyond coal: Five economic indicators. 1. While coal prices become more volatile, natural gas prices appear more stable (and the cost of renewable energy is dropping fast). 2. The delivered price of coal increased three times faster than inflation over the past five years. 3. States dependent on coal had the highest electricity price increase in the past five years. 4. U.S. Coal mining productivity has declined 20% since 2000. 5.
Rising international demand and recognition of environmental costs will continue to drive coal prices upward. Coal still plays a dominant role in the U.S. energy mix, accounting for almost 45% of American electricity production. Researchers, journalists and activist groups have been sounding the alarm about “Peak Coal” in recent years. Depending on the resolution of geologic, economic, legal and transportation constraints facing future coal mine expansion, the planning horizon for moving beyond coal could be as short as 20-30 years. 1. 2. 3. 4. 5. What does it mean? Exploiting China's Coal While It's Still Underground. China is pushing forward with a new strategy for expanding access to coal energy that could also reduce its environmental impact: turning coal into clean-burning gases in the ground. At a U.K. -Chinese summit in Beijing late last month that included British prime minister David Cameron and Chinese premier Wen Jiabao, a $1.5-billion commercial partnership was launched to gasify six million tons of buried coal per year and generate 1,000 megawatts of power.
The project in Inner Mongolia’s Yi He coal field is being advanced by the state-owned China Energy Conservation and Environmental Protection Group, and U.K. -based Seamwell International, a newly formed developer of underground coal gasification (UCG) technology. It is the most high-profile of several such proposed projects in China. UCG is promoted as a relatively clean method of exploiting coal seams that are too deep or thin to be tapped economically using conventional mining. Coal shortage looms amidst power shortage in China | 11 May 2011. China, the largest consumer of energy, is scrambling for energy to keep its mammoth economic engine from slowing down in the face of falling coal supplies, which remains to be the corner stone of power generation in t.. 11 May 2011 SHANGHAI (Commodity Online): China, the largest consumer of energy, is scrambling for energy to keep its mammoth economic engine from slowing down in the face of falling coal supplies, which remains to be the corner stone of power generation in the country.
Early advent of summer in China has turned the situation seemingly direr in combination with the inflation in the region. The hostile winter that preceded the prevalent weather is known to have caused the shortage of coal in China. Chinese power shortages are not uncommon during the summers, but what distinguishes it this time is that it has commenced earlier than usual and at a time when inflation seems to be weighing the economy down. Hunan province has suffered the most from the falling supplies of coal. Energy Outlook. I saw in Tuesday's Washington Post that the EPA was ready to issue its proposed rules for CO2 emissions from new power plants.
When finalized, these rules would apply to facilities larger than 25 MW that begin construction more than a year hence. As the Post notes, the chosen CO2 emissions limit of 1,000 lb. per gross Megawatt-hour (MWh) generated would make it virtually impossible for a new conventional coal-fired generating plant to comply with this requirement. That looks like another positive for natural gas, which is coal's nearest competitor today.
It might also help baseload renewables such as geothermal, since wind and solar power don't ordinarily compete directly with coal. I'm completely swamped with work and other commitments at the moment, so this posting will be more like an extended Tweet. Kwok_w_wan: GRAPH: IEA data suggests #... Future Coal Supplies - More, Not Less! The most extreme of the positions on the imminent coal peak is that of Tad Patzek and Greg Croft. (Energy, Volume 35, Issue 8, August 2010, Pages 3109-3122) In that paper the authors had inserted a predictive graph on coal energy production rate, as follows: From Patzek and Croft As you may note, this suggests that we are right at that cusp of peak production and it is all downhill from here. With the major sources of energy for the planet currently coming from coal and oil, and with the recent comments both from the IEA and the Joint Services Command about the peaking of oil, that would transfer a lot of the load to natural gas, which is the third major source, according to the IEA.
(And it should be noted that P&C did include the following from the IEA in their presentation. IEA predictions of future energy supply sources (after P&G) Gregor MacDonald Much of the argument however for peak in production begins with the decline in the production of British coal. (From Trueman) Global coal supplies: It might be worse than anyone thinks.
The death of US coal | FT Energy Source | FT.com. Like many others, Bernstein Research analyst Hugh Wynne thinks the election of Scott Brown to a Massachusetts Senate seat last week is a death knell for cap-and-trade legislation, at least under this administration (we don’t necessarily agree with this assessment, but more about that later). And like others, he points to new EPA regulations as being an alternative source of curbing greenhouse gas emissions. Only instead of the EPA’s CO2 endangerment finding, it’s the proposed tightening of sulphur dioxide emissions rules that Wynne says could affect US coal-fired power plants so much that US demand for coal goes into ‘secular decline’. The existing standards, set in 1971, specify a 24-hour “primary standard” for SO2 emissions at 140 parts per billion, and an annual average standard at 30 ppb, and a “secondary standard” for three-hour periods at 500ppb.
We note that Wynne cites ‘industry sources’ for the cost estimates, so it’s difficult to know how that will turn out. Related links: Indonesia considers coal export slowdown. JAKARTA, Feb. 4 (UPI) -- Indonesia, the world's third-largest coal exporter, plans to gradually cease its coal exports to save for its future needs, says a government official.
The National Energy Board, or DEN, is now putting together such a recommendation to be submitted to the government this month, state-owned news agency ANTARA reports. "Up till now, DEN members are still discussing a strategy to keep coal to ourselves and the benefits to be derived by such a policy," said Rinaldi Dalimi, a member of the Energy Board. Rinaldi said the current coal production of 250 million tons per year would reach its break-even point in the next 20 to 30 years. The Association of Indonesian Coal Mining Companies said Wednesday it forecasts 2010 coal production to reach 275 million to 280 million metric tons. Last year's coal production was 254 million metric tons, 20 percent less than in 2008. According to a 2008 statistical energy survey, Indonesia had coal reserves of 4.3 billion tons.
Coal industry punk'd by hilarious spoof website. This site offers free asthma inhalers but still claims that coal is the safest form of energy. Image: coalcares.org. "Why free inhalers? Because COAL CARES. For kids who have no choice but to use an inhaler, Coal Cares™ lets them inhale with pride," announces a website that claims to be "a goodwill campaign from your neighbors at Peabody Coal.
" But Coal Cares is actually a spoof done in the culture-jamming style of Adbusters or The Yes Men by a new coalition called Coal Kills Kids. Peabody Energy, the world's largest energy company and major contributor to health problems wherever their coal plants are located, has just announced an outrageous PR program called "Coal Cares" .. to give out free colorful and "fun" inhalers to American children with asthma. They don't make shows like ER about environmentalists I understand this strategy.
Nobody calls the American Lung Association "socialist. " OK, we admit it -- coal DOES cause asthma Coal power is solar power. Somebody will fall for this one. Coal, Energy Demand, and Sovereign Debt - The Price of Energy. The price of energy has a very strong influence on the energy choices governments and individuals make. I sometimes hear people ask "Why are we still building coal-fired power plants? " or "Why don't we replace more petroleum with biomass? " One reason is that biomass is generally more difficult to use from a logistical point of view. Another is that there just isn't enough biomass to meet present energy demands. But a major factor comes down to price. The price and convenience of energy sources are ultimately the keys to customer acceptance. (a note: Robert has been asked to contribute articles to Forbes blog, and this article is the first of his posts there.)
Coal and Treasuries. OECD demand growth for oil faltered years ago, as far back as 2004 when oil went above the “unthinkable” price of 40 dollars a barrel. In the developing world, the escalating price of oil did not as much delay, as divert, energy demand to the powergrid. To an extent that’s hard to measure, but certainly evidenced by power generation buildout and growth in electrified transport, the rising price of oil sent a confirmatory signal to the Non-OECD: stay on your coal trajectory. Of course, overall demand for all types of energy in the developing world took off ten years ago.
Indeed, in 2008 for the first time ever, energy demand in the Non-OECD eclipsed by a hair all energy demand in the OECD. Roughly speaking, we can think of the OECD as the oil users, and the Non-OECD as the coal users. Gaze upon the chart below: When the developing world faced higher oil prices, it guided its development toward power generation. Rio Tinto says to reopen Hail Creek coal mine as cyclone passes. The dirty fuel/developing countries conundrum | FT Energy Source. Despite the largely disappointing outcome of Copenhagen and the fact that worldwide emissions are growing apace, there are still optimists in the clean energy sector.
These individuals would have us believe there is a kind of unassailable momentum made up of political sentiment, fear of regulation, and consumer and shareholder insistence. There’s some evidence for this argument, though it’s mostly limited to developed countries, where demand for some types of energy are peaking anyway. For example: a couple of weeks ago we looked at a report about the death of US coal. The news flow since then on coal has yielded quite a few arguments in favour of the optimistic line. The chief executive of Alstom, which makes all kinds of power plant turbines, was reported as saying at Davos that renewables and nuclear growth will outpace coal. German power company RWE is selling a coal-fired plant, which WestLB analyst Peter Wirtz says may be to cut pollution. Related links: A more competitive gas market may be bad news for BP as well as. BP has been making some interesting points about the outlook for the natural gas market, most recently in a very thoughtful article in Foreign Affairs (requires subscription) by Christof Rühl, the company’s chief economist.
It is a theme that BP is likely to highlight in its strategy presentation to investors on Tuesday. It looks pretty clear that the key trends in the gas market – strong US production of “unconventional” gas, and the shift from long-term contracts to spot market sales – are bad news for Gazprom. Alexander Medvedev, the head of Gazprom’s international business, told the FT last week that the the basis of the company’s business in long-term oil-linked contracts remained unchanged, in spite of a shift to spot market pricing for between 10 and 15 per cent of the volumes sold to European customers.
The term ‘IOC’ is, of course, becoming increasingly anachronistic. Gas accounted for more than a third of BP’s production last year. Gas, meanwhile, is somewhere between the two. Global coal prices gets support from EM demand | 03 March 2010 | Coal demand to shoot up to 750 MT in 5 years | 09 March 2010 | w. Europe’s coal irony | FT Energy Source | FT.com. China's coal bubble...and how it will deflate U.S.