Coal will continue to be vital part of future

Published 8:57 am Thursday, April 18, 2013

While energy demand will rise 54 percent by 2035, fossil fuel’s share of world utilization will decrease slightly from 87 percent currently to 82 percent in 2035.

OPEC says the world is not short on coal supply. In terms of calorific value (heat generating), there are more coal reserves than the sum of oil and gas reserves.

China is the largest consumer, producer and importer of coal, accounting for 47 percent of global use. “While China does have significant internal coal resources, they’re often far away from load centers. It does provide an opportunity for American coal suppliers — especially those located in the Western U.S.”

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International demand for low calorific value coal continues to grow — a development which bodes well for Powder River Basin exporters.

A recent study identifies China and India as low-CV markets. The report states that demand will increase in both countries due to transportation bottlenecks within China and the operational challenges of using domestic coal in India.

The U.S. has enough recoverable coal to last at least 250 years. America’s “known” coal reserves constitute 27 percent of the world’s supply.

In its annual World Oil Outlook report, OPEC says fossil fuels will remain a primary energy source in the coming decades, with coal leading the pack.

NMA’s chief executive Hal Quinn said, “Coal is on track to become the world’s primary energy source by 2015, according to Wood McKenzie (global consultancy group for global energy, mining, metals, oil, gas, coal, refining, power and electricity industries).

Barack Obama stated, “Under my plan of cap and trade system, electricity price would necessarily skyrocket.” New York City Mayor Michael Bloomberg called the U.S. coal industry a “dead man walking” in the same week Los Angeles Mayor Antonio Villaraigosa announced his city will move off coal-based energy by 2025.

But Bloomberg noted the U.S. still had a long way to achieve “the sustainable future that we all want.”

Europe is where coal’s immediate future is being decided in a head-to-head competition between the economy and the environment. It’s a contest that will be played out around the world as governments struggle to keep power costs down while meeting their self-imposed carbon emission targets.

In one corner is the politically-correct GREEN crowd demanding less coal be consumed. In the other corner are industries who risk being forced out of business by rising electricity costs, which is driven up by the forced purchase of power from renewables and other sources more expensive than coal.

The question of coal versus other power sources becomes tricky because European governments have signed up to strict carbon emission laws that will gradually increase the price of coal.

The same cannot be said of China, India and the rest of the emerging world where coal remains the “go-to” fuel because it’s cheap and plentiful, and burning it to produce low-cost electricity provides them an even wider cost advantage over rivals in Europe.

Countries that have an energy-price advantage are growing and those forced to pay ever-higher energy prices are not growing. Europe is very much not growing.

It is suffering from crushing debt-burden, an overly generous social welfare system, an ageing population, overpaid workers and uncompetitive industries with Asia and, quite remarkably, the U.S.

A defining issue of the 21st Century could be the relocating of factories out of Europe into Asia and even into the US to capitalize on the energy-cost advantage delivered by low-priced coal-fired electricity.

Some people don’t appreciate the significance of the energy-cost versus environment struggle being fought today in Europe, which will spread worldwide — and keep coal as the “go-to” fuel.

Joseph P. Smith,


Pyro-Chem Corporation

South Point