Excerpts from the report on coal just published by the Energy Watch Group (Coal: Resources and Future Production -PDF):
This is the second of a series of papers by the Energy Watch Group which are addressed to investigate future energy supply and demand patterns. The Energy Watch Group consists of independent scientists and experts who investigate sustainable concepts for global energy supply. The group has been initiated by the German member of parliament Hans-Josef Fell.
Members are:
- Dr. Harry Lehmann, World Council for Renewable Energy
- Stefan Peter, Institute for Sustainable Solutions and Innovations
- Jörg Schindler, Managing Director of Ludwig Bölkow Systemtechnik GmbH
- Dr. Werner Zittel, Ludwig Bölkow Systemtechnik GmbH
Advisory group:
- Institute for Solar Energy Technics, Kassel, Germany (Prof. Schmidt)
- Ecofys, Amsterdam, The Netherlands World Watch Institute, Washington, USA (Chr. Flavin)
- Eurosolar, Bonn
- World Council for Renewable Energy, Bonn, Germany (Dr. Hermann Scheer)
- Swiss Energy Foundation, Zurich, Switzerland (Berhard Piller)
- Centre for Energy Alternative, Seoul, Korea (Prof. Pil-Ryul Lee)
- Joint Research Center, Petten, The Netherlands (Dr. E. Peteves)
- University of Salzburg, Department of Political Science, Austria (Prof. V. Lauber)
Responsibility for this report:
- Dr. Werner Zittel, Ludwig Bölkow Systemtechnik GmbH
- Jörg Schindler, Ludwig Bölkow Systemtechnik GmbH
Executive Summary
When discussing the future availability of fossil energy resources, the conventional wisdom has it that globally there is an abundance of coal which allows for an increasing coal consumption far into the future. This is either regarded as being a good thing enabling the eventual substitution of declining crude oil and natural gas supplies. Or it is seen as a horror scenario leading to catastrophic consequences for the world’s climate. But the discussion rarely focuses on the premise: how much coal is there really?
This paper attempts to give a comprehensive view of global coal resources and past and current coal production based on a critical analysis of available statistics. This analysis is then used to provide an outlook on the possible coal production in the coming decades. The result of the analysis is that there is probably much less coal left to be burnt than most people think.
Data are of poor quality
The first and foremost conclusion from this investigation is that data quality of coal reserves and resources is poor, both on global and national levels. But there is no objective way to determine how reliable the available data actually are. The timeline analyses of data performed here suggest that on a global level the statistics overestimate the reserves and the resources. In the global sum both reserves and resources have been downgraded over the past two decades, in some cases drastically.
For some countries such as Vietnam proven reserves have not been updated for up to 40 years. The data for China were last updated in 1992… According to past experience, it is very likely that the available statistics are biased on the high side and therefore projections based on these data will give an upper boundary of the possible future development.
Only reserve data are of practical relevance, not resource data
The logic of distinguishing between reserves, which are defined as being proved and recoverable, and resources, which include additional discovered and undiscovered inferred/ assumed/ speculative quantities, is that over time production and exploration activities allow to reclassify some of the resources into reserves. It should be noted that resources are regarded as quantities in situ, 50 percent of which at most can eventually be recovered. In practice, such a reclassification has only occurred in two cases over the past two decades: India and Australia. … Thus in practice, resources have never been reclassified into reserves over the past more than two decades despite increasing coal prices.
Six countries dominate coal globally
85 percent of global coal reserves are concentrated in six countries (in descending order of reserves): USA, Russia, India, China, Australia, South Africa. The USA alone hold 30% of all reserves and are the second largest producer. China is by far the largest producer but possesses only half the reserves of the USA. Therefore, the outlook for coal production in these two countries will dominate the future of global coal production (see below).
Largest coal producers in descending order are: China, USA (half of Chinese production), Australia (less than half of US production), India, South Africa, Russia. These countries account for over 80 percent of global coal production. Coal consumption mainly takes place in the country of origin. Only 15 percent of production are exported, 85 percent of produced coal are consumed domestically….
Fastest reserve depletion in China, USA beyond peak production
The fastest reserves depletion worldwide is taking place in China with 1.9 percent of reserves produced annually. The USA, being the second largest producer, have already passed peak production of high quality coal in 1990 in the Appalachian and the Illinois basin. Production of subbituminous coal in Wyoming more than compensated for this decline in terms of volume and – according to its stated reserves – this trend can continue for another 10 to 15 years. However, due to the lower energy content of subbituminous coal, US coal production in terms of energy has already peaked 5 years ago – it is unclear whether this trend can be reversed. …
Global coal production to peak around 2025 at 30 percent above present production in the best case
Based on the assessment that reserve data may be taken as upper limit for practically relevant coal quantities to be produced in the future, production profiles are developed. The following figure provides a summary of past and future world coal production in energy terms based on a detailed country-by-country analysis. This analysis reveals that global coal production may still increase over the next 10 to 15 years by about 30 percent, mainly driven by Australia, China, the Former Soviet Union countries (Russia, Ukraine, Kazakhstan) and South Africa. Production will then reach a plateau and will eventually decline thereafter. The possible production growth until about 2020 according to this analysis is in line with the two demand scenarios of the International Energy Agency (IEA) in the 2006 edition of the World Energy Outlook. However, the projected development beyond 2020 is only compatible with the IEA alternative policy scenario in which coal production is constrained by climate policy measures while the IEA reference scenario assumes further increasing coal consumption (and production) until at least 2030. According to our analysis, this will not be possible due to limited reserves.
Again, it needs to be emphasized that this projection represents an upper limit of future coal production according to the authors’ best estimate. Climate policy or other restrictions have not been taken into account.
Conclusion and recommendation
Global coal reserve data are of poor quality, but seem to be biased towards the high side. Production profile projections suggest the global peak of coal production to occur around 2025 at 30 percent above current production in the best case. There should be a wide discussion on this subject leading to better data in order to provide a reliable and transparent basis for long term decisions regarding the future structure of our energy system. Also the repercussions for the climate models on global warming are an important issue.
