Coal's role in meeting future energy needs is growing

Coal's role in meeting future energy needs is growing

Washington (Platts)--29Jun2006

Coal's role in a future energy program includes coal liquefaction, coal
gasification and near-zero emissions. "We're moving to what I believe will be
huge market segments in Btu conversion -- coal to natural gas and coal to
oil," said Peabody Energy President and CEO Gregory Boyce Tuesday.

"Coal is the only fuel to create sustainable global growth, and coal use will
grow while moving to near-zero emissions," he said at McCloskey's Coal USA
conference in New York.

In today's market, the US, China and India compete for resources on a global
basis, and who knows how long China will be growing, he said. But growing
demand is not the only reason for the increasing use of coal. Oil and natural
gas supplies can't meet world demand, meaning a lack of resources will drive
the energy market to coal. Additionally, the uncertainty of international
supplies of oil and gas could drive coal to displace the other fossil fuels.

Reflecting these projections, global coal use will climb 23% in four years,
and global consumption will nearly double by 2030, Boyce said. Coal is
available and low cost, and it is deposited in the countries that have the
highest demand ? US, China and India.

The energy demand in the future is hard to predict because China now consumes
only one-tenth of the world's electricity and India even less, while only
about 1% of Chinese people own a vehicle and even fewer Indians, he said. Look
at the current impacts with these small numbers, and if they move upward, the
consequences "will be beyond what analysts can predict."

As for the emissions reductions required in the future, technology will lead
the path, Boyce said. Developing supercritical coal technology, the best
technology today, will lead to a 15% to 20% reduction in carbon dioxide
emissions alone. The potential for coal companies is secure if the producers
secure multiple markets for coal in the future.

--Charlotte Wright, charlotte_wright@platts.com

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