15 June 2010

King Coal

The graph above shows the proportion of global fossil fuel consumption that comes from coal, gas and oil. The data comes from the 2010 Statistical Review of World Energy from BP. Contrary to some claims, we are not nearly at the twilight of the coal industry. In fact, coal accounts for a greater share of global fossil fuel consumption than it has since 1969!

11 comments:

  1. Expect to see a resurgence of the British coal industry in coming years, too. Coal extraction was expensive in the 80s, but it's viable again today. More bang for your buck than a wind turbine, certainly, and as we increase our dependence on wind for electricity, so will we increase our dependence on coal for its rapid scalability.

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  2. Interesting article on past and present coal. The other pillar (in addition to Kennny Boy Lay) of political AGW, Margaret Thatcher was moving from coal to North Sea oil/gas.

    A global power company that inherited some of Enron’s coal-fired power plants in Africa has also followed the late energy giant in the effort to profit from climate change legislation.

    Virginia-based AES Corp. has partnered with General Electric Co. in peddling greenhouse gas offsets while lobbying for policies to make those offsets valuable — the same buy-low, lobby-hard, sell-high strategy tried by Enron. AES simultaneous expansion of coal-fired power in Asia, South America and Africa, however, highlights how environmental regulations can yield profit without necessarily yielding environmental gains.

    Before it collapsed in late 2001, Enron was the leading corporate lobbyist for restrictions on greenhouse gas emissions. Former Chief Executive Officer Ken Lay called on both the Clinton and Bush White Houses to ratify the Kyoto Protocol on Climate Change, which one intracompany e-mail declared would be “good for Enron stock.” The company hoped to be the premier dealer in emissions credits that would be required after climate change legislation. Further, Enron’s natural gas pipelines would see increased demand as coal and oil would be made more costly.



    http://www.washingtonexaminer.com/politics/AES-and-GE-imitate-Enron-on-coal-and-climate-46120417.html#ixzz0qwAoHgh1

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  3. If I read the whole NY Times article, the places that are replacing coal with natural gas are dependent on Central Appalachian Coal, Central Appalachian coal production is in decline. So from an 'East Coast' vantage point, King Coal is indeed in it's 'twilight years'.

    I would also note, the company interviewed by the NY Times, Progress Energy, has applications before the NRC.

    Globally King Coal has a bit of a run left, my WAG is he peaks in 2014 or 2015.

    I think this projection by EIA is going to miss the mark substantially.
    http://www.eia.doe.gov/oiaf/aeo/overview.html

    "China alone is projected to account for 78 percent of the total net increase in world coal use from 2007 to 2035."

    I think the EIA missed the same factors they missed in their 2005 energy outlook related to the price of coal. Falling mine productivity and coal delivery costs.

    Chinese coal mines average 590/tons per miner/per year(Compared to 6,000 tons for a Central Appalachian miner). There is very substantial upward wage pressure in China.
    There are numerous recent reports of wage hikes of 30+% in the Chinese manufacturing sector.

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  4. Simon said... 1

    "Expect to see a resurgence of the British coal industry in coming years,
    UK Coal P & L
    http://www.ukcoal.com/profit-and-loss
    They managed to have a combined loss of 63 million pounds over the last 5 years with the largest loss last year, of 127 million pounds.

    The Northern Europe market price of coal in 2009 was $70/ton compared to a 2003 market price of $43/ton and Britain's largest coal company managed to lose money.

    UK Coal consumption in 2009 was just short of 30 million TOE(tonnes oil equivalent). UK Coal production was just short of 11 million TOE.

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  5. Harrywr2 said... 3

    “If I read the whole NY Times article, the places that are replacing coal with natural gas are dependent on Central Appalachian Coal, Central Appalachian coal production is in decline. So from an 'East Coast' vantage point, King Coal is indeed in it's 'twilight years'.”

    Central Appalachian coal production is in decline, but the decline is not due to proven coal reserves in the region. The supply exists but opening a coal mine today as well as in the recent 30 years, has been/is tremendously difficult due to local, state, and federal regulation/red tape. Hence its not ‘twilight years’ for King Coal, its merely a supply bottle neck caused by government.

    Further, productivity within existing mines in the region has climbed steadily. Continuous mining operation can now operate with half the personnel they did in the 1970’s yet produce even more coal. One of the most productive firms is Cumberland Recourses which is privately held.

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  6. BP deserves credit for publishing the annual statistical review of key data on world energy from which the chart in this post is drawn. The Carbon Dioxide Information Analysis Center (CDIAC) uses the BP estimates of energy consumption for the most recent years, classified by source, to produce their "Preliminary global estimates by extrapolation" of fossil CO2 emissions for countries and regions - a widely used compilation.

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  7. Simon
    Coal mining expense is mainly related to the increasing depth of the seams and that can't be changed. Happily coal gasification is back in fashion though. The syngas produced is a mixture of CO and Hydrogen. Theoretically, long/medium term plan is to use a hydrogen fuel cell and send the CO2 back underground. Short term the syngas can be used directly or converted to methane or liquid hydrocarbons. All established technology that was used long before North Sea Gas. Only the drilling and conversion in situ is new, but drilling onshore is a lot easier than offshore.

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  8. W.E. Heasley said...

    Central Appalachian mine productivity rose thru the 1990's. It peaked at about 9,000 tons per man year. It has since dropped to 6,000 tons per man year. The mine mouth price went from $40/ton to $60/ton as a result.

    In a 'double hit', trains and boats run on oil, if the price of oil goes up the 'delivered price' of coal goes up.

    Price parity between nuclear power and coal occurs at $85/ton or $3.40/million BTU delivered.

    Feb 2010 delivered price of coal per by state.
    http://www.eia.doe.gov/cneaf/electricity/epm/table4_10_a.html
    New Hampshire, New Jersey, North Carolina, South Carolina ,Florida, Georgia and Virginia are all at or above the $3.40/Million BTU price point.

    Electric Utilities in New Jersey, North Carolina, South Carolina, Georgia and Florida have applications for nuclear plants pending before the NRC. These states account for 20% of US electricity consumption.

    A 582 megawatt 'clean coal' without carbon capture plant costs $2.8 billion to build. $4.8 billion per 1,000 megawatt.
    http://www.reuters.com/article/idUSN2726108120100528?type=marketsNews

    An 1184 Megawatt AP1000 nuclear reactor costs about $7 billion to build. $5.9 billion per 1,000 megawatt.

    To produce 1,000 megawatt/hr of electricity from coal takes about 300 tons of coal per hour.
    300 * $85/ton delivered = $25,500/hour. Fuel for the nuclear plant costs about $4,000/hour.
    A billion dollar savings in plant construction cost doesn't last long when there is a difference in operating costs of $20,000/hour.

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  9. jgdes,

    The Greens would have a field day with underground coal gasification. It will be easier to get a license to build a nuclear power plant than to get one for an industrial scale underground coal gasification plant. If it springs a leak, it's highly toxic carbon monoxide that's coming out. Surface gasification makes sense. Underground gasification is just too scary.

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  10. Harrywr2:

    How about, at the very least, quote the quotable and leave the make believe for others:

    “W.E. Heasley said...

    Central Appalachian mine productivity rose thru the 1990's. It peaked at about 9,000 tons per man year. It has since dropped to 6,000 tons per man year. The mine mouth price went from $40/ton to $60/ton as a result.”


    What I did say was: “Further, productivity within existing mines in the region has climbed steadily. Continuous mining operation can now operate with half the personnel they did in the 1970’s yet produce even more coal.”

    Did say this as well: “Central Appalachian coal production is in decline, but the decline is not due to proven coal reserves in the region.” Said that in response to your assertion that “..Central Appalachian coal production is in decline.”

    However, I went no further. I did not go into your mini-essay or elude to anything regarding your mini essay:

    “ In a 'double hit', trains and boats run on oil, if the price of oil goes up the 'delivered price' of coal goes up.

    Price parity between nuclear power and coal occurs at $85/ton or $3.40/million BTU delivered.

    Feb 2010 delivered price of coal per by state.
    http://www.eia.doe.gov/cneaf/electricity/epm/table4_10_a.html
    New Hampshire, New Jersey, North Carolina, South Carolina ,Florida, Georgia and Virginia are all at or above the $3.40/Million BTU price point.

    Electric Utilities in New Jersey, North Carolina, South Carolina, Georgia and Florida have applications for nuclear plants pending before the NRC. These states account for 20% of US electricity consumption.

    A 582 megawatt 'clean coal' without carbon capture plant costs $2.8 billion to build. $4.8 billion per 1,000 megawatt.
    http://www.reuters.com/article/idUSN2726108120100528?type=marketsNews

    An 1184 Megawatt AP1000 nuclear reactor costs about $7 billion to build. $5.9 billion per 1,000 megawatt.

    To produce 1,000 megawatt/hr of electricity from coal takes about 300 tons of coal per hour.
    300 * $85/ton delivered = $25,500/hour. Fuel for the nuclear plant costs about $4,000/hour.
    A billion dollar savings in plant construction cost doesn't last long when there is a difference in operating costs of $20,000/hour.”



    However, since you enjoy misquoting then argue yet another tangent, try this exercise: go get a nuclear plant permit. Call me once obtained.

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  11. W.E Heasley

    2010 Annual Energy Outlook
    http://www.eia.doe.gov/oiaf/aeo/pdf/trend_5.pdf
    "Recent jumps in the average price of Appalachian coal, from $1.26 per million Btu in 2000 to $2.36 per million Btu in 2008, were in part a result of significant declines in mining productivity during the period."

    If you would like to track the progress of NRC licensing it is here.
    http://www.nrc.gov/reactors/new-reactors/new-licensing-files/new-rx-licensing-app-legend.pdf
    I would note that the NRC received applications for 12 nuclear power plants in 2008. The first licenses are scheduled to be issued in 2011.

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