KING COAL: Growing Asian demand will fuel a boom in coal production and burning, according to one analysis.
Image: Wikimedia Commons/Herry Lawford
China will widen its gap with the United States as the world's largest coal-producing country by the end of the decade, riding continued strong demand from its electric power and steel-making sectors, according to a new analysis from New York-based GBI Research.
By 2020, the report projects China will produce 4.5 billion metric tons of coal annually, reflecting a 3.5 percent compounded annual growth rate over the next eight years.
Regionwide, coal consumption for the power generation in Asia stood at an estimated 2.7 billion metric tons in 2011. From 2012 to 2020, that figure is expected to rise to 4.4 billion tons annually, according to GBI.
The Asian forecast contrasts sharply to projections for the United States, which is expected to see sagging domestic demand as power plants undergo fuel switching away from coal. Questions remain as to whether American exports of domestic coal can make up the difference.
The United States produced nearly 1.1 billion tons of coal in 2011, according to the U.S. Energy Information Administration, a 10 million-ton increase over 2010's output but still shy of the recent high set in 2008. Meanwhile, exports of U.S. coal jumped 31 percent from 2010 to 2011, from 81.7 million tons to 107.2 million tons, according to EIA.
Within the Asia-Pacific region, China continued to outpace its neighbors with 3.3 billion metric tons of coal produced in 2011, accounting for a 68 percent share of all production in the region. China's mines are expected to maintain high production rates through 2020, with abundant reserves in the provinces of Inner Mongolia, Shanxi, Shandong, Xinjiang, Qinghai, Gansu and Ningxia, the analysis found.
According to GBI, China's increase in coal production will come with additional government consolidation of the mining industry into large production bases that can achieve greater efficiencies and production capacities of 90 percent by mid-decade.
"The increase in domestic coal consumption is driven by huge demand from existing and upcoming coal-fired power plants," the report said. Power plants currently account for more than 55 percent of all coal consumed in China, with the rest going to other industrial users such as steel mills and cement plants. As domestic demand increases for both thermal and metallurgical coal, China is expected to curtail exports, possibly expanding markets for other regional players like India, Australia and Indonesia.
India, Indonesia also see rising production
GBI projects that India, currently the world's third-largest coal producer, will also see a surge in production -- on the order of 6.8 percent annually -- because of the country's heavy reliance on coal-fired electricity along with expanding steel, cement and fertilizer manufacturing sectors.
By 2020, India is projected to produce 1.1 billion tons of coal annually, up from 632 million tons in 2011. Such robust growth would place India on par with the United States in terms of total production, assuming international markets for U.S. coal remain strong.
"India is a power-deficit country," the report notes. As such, its national government has sought to build an additional 100,000 megawatts of new electricity generation in the coming years. "The majority of the capacity addition will be through thermal power plants, for which the demand of coal is going to increase in the future," the report said. India imports coal from Indonesia, Australia and South Africa to make up for a shortfall in domestic supplies.
Indonesia, while a smaller producer than China or India at 352 million metric tons of coal in 2011, has witnessed a quadrupling of its production rate since 2000 as it has helped meet demand for thermal coal in Japan, Taiwan, Hong Kong, India, China and other areas.
Indonesia has key advantages for exporting its coal because of the proximity of its two primary coal-producing islands -- Kalimantan and Sumatra -- to seaports and navigable rivers, reducing transport time and cost for importing countries, GBI noted.
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Add Comment"... implementing expensive actions in the US to dramatically reduce our CO2 emissions is a complete waste of our limited financial resource.."
Reply | Report Abuse | Link to thisActually not since nuke power at 4 cents a kwh all in (VC Summer built by private power) is cheaper than the cost of the coal itself. The rate of return of investment to the nation as a whole switching from fossil to nukes can exceed 40% per annum, as factory production of nukes gets under way. 15 years from now no more fossils is well within our industrial and financial capacities.
China and India are well on their way with the process accelerating as factory production of nuke components in China begins. China is likely to have a production ready molten salt reactor, within the next 5 years. This unit which can be shipped on rail cars, can power the world for a thousand years, burning existing nuclear waste, and do it for less than a cent a kwh.
What is required is the Big Oil paid off media, Green organizations and politicians, cut with the antinuclear propaganda and get on with it.
Their most potent weapon the cheap gas canard falls apart when we see that cheap domestic gas at $2/mcf is only a $2/mcf tanker ride to a $15/mcf overseas market.
Every year these ghouls can delay the replacement of fossils with nukes more than 3 million people are killed by fossil air pollution. Billions will die when they lead us over that fast approaching global warming precipice.
There are still perfectly good reasons for the US to reduce coal power generation. Coal is dirty, extracting it is environmentally destructive, and the waste product (coal ash) is quite toxic.
Reply | Report Abuse | Link to thisNor is it foolish for the US, a major CO2 producer, to cut back. Truthfully coal is already as expensive as wind when you consider new installed capacity. Nuclear is a more complex argument, Seth's view IMHO is rather highly optimistic. Dry geothermal should also be quite competitive and requires only modest investment. Heck, you can sink a hole almost anywhere and if it is deep enough generate power. Like where you already have existing thermal plant.
It is interesting to argue over what are ultimately matters of business and economics, but people seldom change their positions. Instead, the ones having incorrect arguments are simply driven out of business over time, all the while remaining unpersuaded. We will eventually see who is right about oil, coal, and nuclear. At present there is considerable disagreement about what exactly are the relevant laws of economics, however as in the case of physics, the laws apply regardless of our current understanding.
Reply | Report Abuse | Link to thisSo why couldn't ClimateWire present these coal production predictions as at least rough estimates of projected increases in atmospheric co2? Isn't that what's important to the survival of humanity through the coming decades?
Reply | Report Abuse | Link to thisBTW, if nuclear power is actually so much cheaper than coal furnaces in the U.S. why are the Asians pursuing coal? It would seem that we've either encumbered coal power plants with unnecessary regulations or Asian countries are not attempting to minimized their ecological impact...
Takes time to build nukes as production capacity builds and there is the that wait and see for a few years distraction giving new Chinese technologies like the US designed and abandoned MSR and the pebble bed machines to prove their promise. India same same.
Reply | Report Abuse | Link to this"Instead, the ones having incorrect arguments are simply driven out of business over time..."
Reply | Report Abuse | Link to thisThat's impossible when the Federal Government picks up the nuclear industry's liability insurance tab because of the Price Anderson Act. Without this astronomical subsidy, the nuclear industry couldn't buy liability insurance at any price and would have never been viable. All the billion$ in research money used to develop Light Water Reactor technology for the Manhattan Project helped out immensely as well. When the nuclear industry imploded in the 1980s, the feds and the ratepayers had to swallow the enormous losses. Long story short, nuclear power ALREADY failed, but its political connections and out-sized influence have kept it afloat long enough for people to seemingly forget these failures and be fooled into thinking we need to try the same thing again.
BTW, the rebirth of the nuclear industry isn't looking great at all regardless of how many people they might pay to fanatically rant in their favor on comment boards:
http://green.blogs.nytimes.com/2012/05/11/a-higher-price-tag-for-a-nuclear-project/
"The Asian forecast contrasts sharply to projections for the United States, which is expected to see sagging domestic demand as power plants undergo fuel switching away from coal"
Reply | Report Abuse | Link to thisBaloney. US coal demand increased last year and will continue to increase. hint... Pollyanish 'projections' are not reality. As nuclear plants shut down, natural gas can't make up the slack and in the scale of demand, 'renewable' energy is a mostly irrelevent.
Reduction in carbon emissions are lip service that nobody but the gullible accept. 'Growth, growth, growth..the mantra of all economies including the USA.
Once again Sault accepting the bow for the dumbest commenter on Sciam since the inception of its comments section. Is it even possible to believe the man can actually read much less earned the BS and MS in engineering he claims?
Reply | Report Abuse | Link to thisOnce and for at least a score of efforts to penetrate the thickness, the Price Anderson Act limiting liabity in the event of an accident impossible in a modern reactor,is not a nuke subsidy. If it was liabilty costs would forbid any nuke bomb sized LNG tanker sailing into a US port, and no solar or wind plant could be built if folks could sue for all the sickness and death caused by the air pollution from their required filthy gas backup. No US hydro power facilty or chemical plant could operate.
The immense stupidity of the Sault knows no bounds. The Manhatten project used graphite reactors not LWR and was about nuke weapons. No subsidy there.
Actually the losses in 1980's nukes were caused by Greenie attorneys in the NRC appointed by the halfwit Carter, and amount to a tiny fraction of a cent a kwh over the power generated since.
Failed? what a twit. Nuke power costs all in on existing plant is 2 cents a kwh - the cheapest energy there is.
Nuke power is unable to battle the immense resources that Big Oil/Coal and their wholely owned subsidiary Big Green put into their antinuclear battle. The industry has no influence compared to the immense forces arrayed against it.
As usual Sault doesn't read the link it posted. Georgia Power's problem is interest payments to greedy Wall Street not an issue for public power and VCSummer on time on schedule at $4B/Gw- 4 cents a kwh for public power. The same reactors are almost 90% complete on time on budget built by American engineers for half the price in China.
There are many reasons why Asian countries are slow on developing nuclear power, amongst them ... inadequate access to technology, safety/liability issues, crony capitalism (it is easier to illegaly mine coal than nuclear fuel), "not in my backyard" syndrome.
Reply | Report Abuse | Link to thisUseful points. I suspect that the communist equivalent of "crony capitalism" is a significant factor in China, as those administrators whose power base is derived from established coal mining operations likely work to ensure its continued success...
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