Properties
Comments about coal are usually not complimentary.
Despite our dependence on it as a source of heat for
electric power generation, environmentalists wish it
would go away. On the other hand, advocates like to
claim we have more than 110 years of coal left - "at
present rates of consumption". Both sides are
overlooking crucial points. Let's see if we can
clarify the future use of coal as a fossil fuel
resource.
To begin with, it is important to understand not all
coal is of equal quality. When I was in grade
school, we lived in a house that had a coal furnace.
For those who could get it, the coal of choice of
home heating applications was anthracite coal
because it was the cleanest burning form of coal and
provided - ton for ton - the most heat.
Unfortunately, we humans have used up most of the
readily available anthracite coal. Future
consumption will depend on the other three kinds of
coal: bituminous, sub - bituminous and lignite.
Most of the commonly produced (and consumed) coals
are of two types:
- Bituminous coal or black coal is a
relatively soft coal that contains a tarlike
substance called bitumen. It has a 45% to 86%
carbon content. Although primarily used for
steam powered electricity generation, high
quality bituminous coal can be converted to a
coking coal used in the production of steel and
iron.
- Sub-bituminous coal contains 35% to 45%
carbon. Like bituminous coal, it is primarily
used for the generation of steam powered
electricity.
Other applications for bituminous coals include
their use as a source of heat for kilns in the
manufacture of cement and brick, heat for the
smelting of metals, and as a source material for the
manufacture of liquid fuels, methanol, fertilizer,
shingles, and the coal tar we use for the
manufacture of plastics, perfumes, mothballs,
medicine, dyes, explosives and flavorings.
There are even a few coal fired steam locomotives in
use.
As we use these coals up, what we will have left is
a soft brown combustible sedimentary rock of
relatively low heat content called lignite. Used as
a steam coal to produce electricity, lignite has a
low carbon content (25% to 35%). Because it contains
relatively high quantities of ash and moisture,
lignite is often called the "dirty" coal.
It is the carbon content of coal that supports the
combustion process. The higher the carbon content,
the greater the heat value per ton. Coals are also
graded according to plasticity, and their moisture,
volatile, ash, sulfur and chemical content. The
values in the following chart are an approximation
of ranges.
Generally speaking, power companies want the lowest
ash and sulfur content, as well as the highest heat
value per ton. That fact tends to favor the
consumption of bituminous coal over sub-bituminous
coal, and both of these coals over lignite. From
1992 through 2012, the total world heat content per
ton of the coal we humans consumed fell by more than
10 percent. This means that as we become more
dependent on the consumption of coals of lesser heat
value, the rate of actual consumption (in tons) will
have to increase in order to provide the same amount
of heat energy.
Resources and Reserves
Although these two terms are often used as though
they are interchangeable, they have very different
meanings when we are discussing fossil fuels. The
term "resource" refers to the maximum quantity of
coal that exists on our planet, irrespective of
density, form or location. Coal resource estimates
vary widely (up to 11 trillion tons), and are the
source of some confusion since many infer that all
of this coal can be produced. Compared with current
production, there are many who believe our coal
reserves will last "forever".
Unfortunately, most of these "reserves" are useless.
We have the same logistics problem with coal that we
have with oil. The resource base is far larger than
the quantity that is technically and economically
recoverable. Coal is embedded in other material
(often multiple seams of other overlay), may exist
far below the surface of the earth, and may occur in
small quantities, irregular pockets, or thin layers
that make production impractical. We expect some of
this resource base (how much is unknown) is under
the ice and oceans that cover vast areas of our
planet. In order to produce coal, we must first find
it and exploration is an uncertain undertaking. And
finally, even if we find a seam of coal, it may not
be technically or economically or politically
feasible to go into production.
After the elimination of useless deposits, my guess
(WAG) is that we humans have inherited approximately
3.4 trillion tons of coal. Of this, perhaps 1.1 to
1.3 trillion tons will eventually be produced.
And that brings us to reserves. When we talk about
reserves there are possible reserves (it is possible
they will be found and produced), probable reserves
(we think we know where they are and believe they
can be produced) and proved reserves (the location,
size and characteristics of the coal deposit are
known and have been evaluated).
According to World Energy Council data, we have
proved
reserves of over 400 billion tons of
anthracite and bituminous coal, and over 450 billion
tons of sub-bituminous and lignite coal left on our
planet. The term "proved reserves" usually refers to
those quantities of coal that geological and
engineering information indicates with reasonable
certainty can be produced in the future from known
deposits under existing economic and operating
conditions. In the following graph we can see that
Europe and Eurasia have the largest proved reserves
(35% by tonnage), followed by the Asia Pacific
region (31%), and North America (28%). Most of the
coal in the Europe Eurasia region can be found in
Russia, Germany, Ukraine, and Kazakhstan. If Russia
takes over the Ukraine and effectively dominates
Kazakhstan, it will control 26 percent of the
world's proven reserves of coal.
Higher prices for coal and evolving technology
will increase our calculation of economically proven
reserves. If my coal resource "guess" is
approximately correct, we have 850 billion tons of
proven reserves, 200 billion tons of probable
reserves, and 250 tons of possible reserves left to
consume on our planet. Fair warning: these are
optimistic projections.
Proven reserves are broken down by type of coal in
the next graph. Seventy percent of the coal found in
Europe and Eurasia, 40 percent of the coal in the
Asia Pacific region, and 54 percent of North
American coal resource base is of lower quality
sub-bituminous and lignite coals.
Consumption
World coal consumption has been increasing, and
reached 3730 MTOE (Million Tons Oil Equivalent) in
2012. The largest national consumer is China. There
was a slight decline in coal consumption within the
United States and Europe from 1992 through 2012.
Consumption within the Asia Pacific region, however,
increased by 38 percent from 1992 through 2002, and
119 percent from 2002 through 2012. China now
consumes more coal (50.6 percent of world
consumption) than all other nations put together.
That means, of course, China also pollutes the air
with more combustion products from the consumption
of coal than any other nation. (Note 1) Large coal
fired plants are under construction or in proposal
stages for many nations including China, India,
Germany, Russia, Vietnam, Pakistan, Sri Lanka and on
and on. These nations will not stop burning coal
because they cannot stop. The consumption of coal is
embedded in their economic policies.
In addition, over 3 billion people living in poor
nations are looking for a better life. That means
they need more steel (processed using coking coal),
and a lot more electricity. One of the criticisms of
the recent IPCC report is that it would seem to
condemn people who happen to live in a poor nation
to irreversible poverty - because the IPCC
recommendations would severely limit their access to
electricity. Thus while some Western nations may
temporarily reduce their consumption of coal,
international demand will increase - most notably in
the Western Pacific region.
In the following graph, we can see how Chinese
coal consumption (72%) dwarfs all other nations in
the Asia Pacific region. National governments,
particularly in China and India, are committed to
economic expansion. China's consumption of
electricity is expected to increase, on average, by
five percent per year through 2030. Although it is
planning to reduce its reliance on coal for future
power generation, China will likely build more than
300 new coal fired plants with a total capacity of
350 - 450 GW over the next 10 to 15 years. Japan is
likely to increase its coal fired plant capacity by
30 percent over the next 10 years to replace, and
augment, nuclear power generation. About 60% of
India's thermal power generation comes from
coal-fired power plants and this capacity is
scheduled to expand by 500 GW (111 percent).
Production and Price
Thus far, world coal production has kept up with
this dramatic increase in demand. Total world coal
production increased by 10 percent in the period
from 1992 through 2012, and by 60 percent from 2002
through 2012. World production now exceeds 3845 MTOE
per year.
As one would suspect, a growing demand for coal
has stimulated higher prices. The United States
Central Appalachian index has increased 148% from ~
$29 per ton in 1992 to ~ $72 per ton in 2012. The
price the Japanese pay for imported steam coal
increased 179% from ~ $48 per ton in 1992 to $ 134
per ton in 2012. Note that coal price increases
accelerated between 2002 and 2012. World energy
prices for all fossil fuels spiked in 2008, causing
food riots in several nations. Coal was no exception
even though its consumption had little direct effect
on food production. Excess production caused a
supply/demand imbalance in 2012 and coal prices
subsequently declined in 2013. It is probable that
the price of coal will again resume its upward trend
before 2016.
The price of coal is probably more elastic than
the price of oil or natural gas because most of the
direct consumers are either corporations or national
governments. These entities pass escalating coal
prices on to the consumer in the form of higher
prices for electricity and mass produced goods. The
pain of higher indirect coal prices is spread over a
large base of consumers. However, there are limits
to indirect price escalation and we should expect
consumers in developed nations to become
increasingly interested in energy conservation and
the purchase of goods that use less electricity.
We should also be aware that long term coal prices
tend to be influenced by the price of natural gas
and oil. Oil prices are projected to increase
substantially as we approach peak oil, and that will
increase national interest in the conversion of coal
into motor fuel. This will have an upward effect on
both the demand for coal and the price of coal per
ton.
Peak Coal
In terms of Peak Coal, we actually will have two
peaks: one measured by heat content, and one
measured by maximum tons produced. Considering the
decline of our anthracite resources, and the
increasing production of sub-bituminous and lignite
coals, there are those who believe we have already
passed Peak Coal based on heat (energy) content.
After we take all of these factors into
consideration, and make our assumptions about
resource availability, production, consumption,
price escalation, consumer behavior, government
response, and so on.... we can (with some
apprehension) calculate the date of Peak Coal.
Between 2012 and 2035 annual coal production will
increase by ~47 percent. Production begins to stall
around 2030, and the curve flattens through the year
of peak production - 2035. Thereafter it declines
rather quickly because the remaining reserves are
more difficult and costly to exploit. Please note
there is a lot of production after 2035. But annual
average production decreases with each passing year.
We will probably be into the next century before the
last nugget is pulled from the ground, and that - of
course - is what people think they mean when they
say... "We have enough coal to last 110 years". We
will have some coal left, but not enough to satisfy
demand. Not even close.
So... just how good is this prediction? It is not
a number I pulled from a hat. It is backed by hours
of research and a rather large spread sheet.
Never-the-less, there are a few analysts who believe
I am being too optimistic. On the other hand, most
pundits, particularly those associated with the coal
industry, will probably assert I am far too
pessimistic. (Note 2)
The strength of this prediction depends on several
factors which are unknown and unknowable. For
example, there is always the hope we humans will
find additional seams of coal south of the equator,
or in Siberia, or off shore Australia, or in Canada.
In situ coal seam gasification would open up
additional offshore and under ice resources as well
as onshore reserves to production. If we find a way
to exploit an additional 200 billion tons of coal,
that would delay Peak Coal by perhaps 25 - 35 years,
and move the date of Peak Coal to ~ 2065.
So, in the final analysis, we just do not know the
date of Peak Coal. We can only make our estimates
based on current data that is available to the
public. Unless we substantially increase our proven
reserves, that information definitely indicates Peak
Coal will occur before 2050.
But - I could be wrong. You decide.
Ref:
MTOE: The tonne of oil equivalent (toe) is a unit of
energy: the amount of energy released by burning one
tonne of crude oil.
Note 1: China now accounts for more than 27% of
world carbon dioxide emissions, followed by the
United States (17%), India (5.5%), and Russia
(5.1%). American CO2 emissions have fallen by more
than 9 percent since 2000. By contrast, Chinese
carbon dioxide emissions were up by 168 percent
during this period.
Note 2: With special thanks to BP, several national
coal agencies, the IEA (International Energy
Agency), the IMF (International Monetary Fund), the
World Coal Association, and several investment
research sites (along with a few blogs).
Copyright © 1996-2014 by
CyberTech,
Inc.
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