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China's coal production to peak in a couple of years

by Jerome a Paris Sun May 13th, 2007 at 10:51:58 AM EST

China has less than 50 years of reserves at today's production rythm and, considering that it's currently growing production at 10% or more per year, that would translate in less than 20 years with current growth.

China's crude coal output up 8.1 percent in 2006

China's crude coal output reached 2.325 billion tons in 2006, up 8.1 percent year on year, according to sources with the State Administration of Coal Mine Safety.

China's crude coal production dropped to a low of 999 million tons in 2000, and then rebounded to 1.415 billion tons in 2002 and 1.997 billion tons in 2004.

The above graph is from a Energy Watch Group (pdf), a German think tank, which puts world peak coal in less than 20 years in the best case, i.e. if all reserve numbers are correct (and they show that history points to lower numbers in reality) and if nothing is done to fight climate change.

That report notes that while US production in tonnage may not peak for another few decades, its energy content has already peaked in 2000, as the Wyoming coal being produced today is less energetic than earlier production.

As we noted earlier, most of world growth in the past decade has been underpinned by the massive energy boost provided by skyrocketing Chinese coal production. This is about to end.

[Update]: Now crossposted on DailyKos in a longer version, which is copied below the fold.


The above graph is from a Energy Watch Group (pdf), a German think tank, and represents an optimistic view of future coal production as it makes two big assumptions:

  • reserve numbers are correct - and their report notes that history suggests that reserves are overvalued in many countries;
  • nothing is done to fight climate change by limiting coal production.

:: ::

First, some recent numbers:

China's crude coal output up 8.1 percent in 2006

China's crude coal output reached 2.325 billion tons in 2006, up 8.1 percent year on year, according to sources with the State Administration of Coal Mine Safety.

China's crude coal production dropped to a low of 999 million tons in 2000, and then rebounded to 1.415 billion tons in 2002 and 1.997 billion tons in 2004.

The Energy Watch report notes that China has, at best, 50 years of production at current levels. With production increasing at 10% or more per year, that period would be much shorter (assuming, unrealistically, uninterrupred 10% growth, the reserves would be enough for barely 20 years). As the graph above suggests, the peak in production is likely to happen in just a few years' time.

This matters not just for China, as was noted in this Oil Drum thread last year:

*The world economy was saved last year by the increasing World coal production*. According to BP, World total energy production grew 2.4% in 2005, but oil only 1.0%. *Coal production increased 5.0%, most of it in China* (growth 10%, volume well over 30% of the total). Also Hydro grew significantly (4%). Natural gas grew only 2%. From all this we see that the Chinese coal production is the single most important factor keeping the World energy consumption and thus the World economy growing. This also explains, why the World economy did fairly well in 2005, despite of the plateauing oil.

Right, the *Chinese coal is more significant to the World energy than the Saudi oil* (1106 Mtoe vs. 540 Mtoe.). China is probably now the biggest fossile energy producer (not consumer) in the world just before the US (China coal+gas+oil in 2005: 1334 Mtoe, the US 1359 Mtoe, but considering the Chinese coal growth China is probably now the #1). Nuclear and hydro don't change this.

Here we see the secret of the Chinese economy. The energy production of China has risen 44% from 2002 to 2005, and this at absolute volumes comparable to the US! The *Chinese total energy production growth has supplied almost half of the total World energy supply growth during that time* (450 Mtoe of 1010 Mtoe growth). China has been literally the engine of the World energy and economy.

It is absolutely clear that low costs are not the main reason for production moving to China. The industrial growth there would have been impossible without this huge growth in domestic energy production. *This is the biggest "energy surge" in the World history* and the driving force of globalization.

i.e. the engine of globalisation is just about to stall. The economic consequences are going to be devastating.

Note, of course, that the peak of the single biggest producer (China) will also largely drive the global production peak, slated to take place in not more than 20 years:

Note, again, that this is an optimist take, with no downward revision of reserves (coal reserves are not very precisely measured, and when they are, the results tend to be disappointing rather the other way round), and with no action to limit coal use for reasons linked to pollution or global warming.

As to the USA, the report looks slightly more optimistic on its face:

But note this bit:

Anthracite: 30 MJ/kg
Bituminous coal: 18.8–29.3 MJ/kg
Subbituminous coal: 8.3–25 MJ/kg
Lignite: 5.5–14.3 MJ/kg

Since 1970 lower quality subbituminous and low qualitiy lignite have been contributing with rising volumes. The growing share of lower quality coal is the reason why *total coal production in terms of energy content peaked in 1998* at 598.4 Mtoe and has since declined to 576.2 Mtoe in 2005 in spite of the continuous rise in produced volumes (BP 2006).

Increased production means increased production of lower quality, less energetic kinds of coal. And as I noted in this diary (Even coal (clean or not) will not save the US way of life) these reserves might last even less if there is pressure to use more coal as a substitute for dwindling oil & gas resources (via coal-to-liquids plants, a switch to electric transport or otherwise).

Again:

  • coal, in particular Chinese coal, is playing a major role in our current bout of global economic growth;
  • its impact on global climate change and pollution cannot be overstated;
  • this phase of reckless growth is coming to an end very soon, for hard physical reasons;
  • this is unlikely to be enough to moderate our carbon emissions in itself, but it will certainly dampen economic growth worldwide.

Display:
After peak oil, peak coal...
by Bernard on Sun May 13th, 2007 at 11:32:17 AM EST
well, from that paper, it  might even be earlier...

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun May 13th, 2007 at 11:58:51 AM EST
[ Parent ]
This has to make the Australians both nervous and excited.  This is obviously the coal source of first resort after fields in China give out.  That's either big money, or a big enticement for the Chinese to gain control of those Australian fields by any means necessary.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun May 13th, 2007 at 12:14:18 PM EST
[ Parent ]
There doesn't seem to be any need to gain control of the coal fields ... the Ozzies seem to be happy to put it on the market.

The biggest concerns in the Hunter are the capacity of the mine to port logistics, and there's little the Chinese could do to increase that by invading (or whatever).


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun May 13th, 2007 at 12:35:28 PM EST
[ Parent ]
Can someone overlay China's real GDP on that chart of China's coal production?

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Sun May 13th, 2007 at 11:37:37 AM EST
I am really relief... if this is true.

But regarding the US I think the reserves are huge , huge ,huge.. In the US coal will be certainly a matter of price...

In any case coal is much more simple than oil regaing geology so I think it is heavily dependent on economics.. and how much we will be able to pay....

Coal is basically all around... seriously..

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Sun May 13th, 2007 at 02:55:13 PM EST
The people who made this report are renewable this and solar that. The possibility that they are not entirely unbiased should be taken into account.

The German MP who initiated this report, one Hans-Josef Fell, is a B90/Green. Which is not very good. It would've been best if he were a social demoocrat as they're the ones into cahoots with the coal industry. If such a person was behind an alarming report like this, I need not worry that it underestimates the global coal reserves.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sun May 13th, 2007 at 03:52:59 PM EST
but do you contest the underlying data? It comes from the Bundesanstalt für Geowissenschaften und Rohstoffe (BGR) and the EIA, so should be slanted rather more towards coal than the other way round?

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun May 13th, 2007 at 04:30:01 PM EST
[ Parent ]
Nope, I don't contest the data. I have neither the time nor the inclination to sift through the report.

I am just saying maybe someone should do just that, considering who put it together.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sun May 13th, 2007 at 04:52:53 PM EST
[ Parent ]
You had time and inclination to check the authors, but not the actual arguments?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun May 13th, 2007 at 06:09:20 PM EST
[ Parent ]
It takes less work.

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Sun May 13th, 2007 at 06:17:08 PM EST
[ Parent ]
Yep. All the names are in the beginning, and Google (and Wikipedia) is your friend. If I had started looking at their data, arguments and analysis I would have had to make quite an effort, especially as my knowledge of coal mining is pretty close to zero.

Look, I am not saying they are wrong, only that maybe someone should read the pdf and check if it holds water.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sun May 13th, 2007 at 06:17:54 PM EST
[ Parent ]
Well, Jérôme did just that. If you think he might have missed something, it's your work :-)

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun May 13th, 2007 at 06:20:01 PM EST
[ Parent ]
When I posted my comment he hadn't crossposted the longer version from DKos yet, so I didn't know that.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sun May 13th, 2007 at 06:54:37 PM EST
[ Parent ]
Myself, I read maybe three pages and glanced over the rest tonight, I might read it in full tomorrow.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun May 13th, 2007 at 06:21:11 PM EST
[ Parent ]

Kuwait plans big shake-up in oil sector

KUWAIT:  Oil Minister Sheikh Ali Jarrah Al-Sabah said he plans a major shake-up in Kuwait's oil sector by promoting young staff to top posts, in comments published yesterday. "What I have noticed is that the oil sector (management) has become flabby ... Now I plan to promote people from the second and third lines to the top ...

(...)

Sheikh Ali also confirmed to Al-Wasat newspaper that the state's proven oil reserves have fallen to 48 billion barrels, as reported last year by Petroleum Intelligence Weekly, down from an announced 100 billion barrels. However, he said Kuwait has additional probable reserves of around 150 billion barrels, especially after recent discoveries. Last month, Kuwait announced a significant oil and gas discovery in the northern Dhabi area, without giving details of quantities.

Psssschiiitt. People that follow these things know that the reserves of all OPEC countries were artificially inflated in the 80s (when production quotas were linkied to reserves size), but the official numbers were nevertheless still used by all 'serious' publications and institutions.

If Kuwait drops that pretence, will others follow? How many tens of billions of (never real ) reserves will then have 'officially' disappeared?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sun May 13th, 2007 at 04:26:22 PM EST
This is BIG.

The Kuwaitis are saying what everyone has been thinking.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sun May 13th, 2007 at 04:54:09 PM EST
[ Parent ]
Note, again, that this is an optimist take, with no downward revision of reserves

I'm not sure if this comment refers to the German report or the Oil Drum article, but the former stresses the distinction between 'reserves' and 'resources', using the former to mean proven reserves. They make a good argument that in the last few decades, rather than seeing growth of reserves due to reclassification of newly produceable or discovered resources, there was decrease globally.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Sun May 13th, 2007 at 06:14:21 PM EST
the engine of globalisation is just about to stall. The economic consequences are going to be devastating

Because the neoliberal propagandists at the FT, SWJ and The Economist will diagnose "not enough reform" and there is nobody pushing an alternative narrative.

Bush is a symptom, not the disease.

by Migeru (migeru at eurotrib dot com) on Sun May 13th, 2007 at 06:25:33 PM EST
well there is, but it's like a mouse squeak next to the cacophony of lies.

and instead of burning up calories breathlessly predicting the freefall of capitalism, why don't they look for better social models instead?

pushing clean tech is the only way everyone agrees on...

the problem is it's to such different degrees.

easier to get a limpet off a rock than the energy companies off the centralised grid moneytit...

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Sun May 13th, 2007 at 09:46:04 PM EST
[ Parent ]
It's truly amusing what the authors of this purported "study" "know" about US coal.

Doubt seriously, that they would recognize an exposed seam of coal at a strip mine if they walked on it.

Deeply flawed analysis, all the way around, as far as US is concerned.

Just saying.

And I don't have a bet on any dog in this fight.

"When the abyss stares at me, it wets its pants." Brian Hopkins

by EricC on Sun May 13th, 2007 at 10:25:40 PM EST
???

Would you care to expand on this and enlighten us?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon May 14th, 2007 at 01:30:49 AM EST
[ Parent ]
Just briefly:

The graph on page 34. I read the section of the pdf on U.S. Reserves. The authors seem to be suggesting that U.S. coal production quality, on a btu basis, began going to hell in a hand basket in 1970, when the first western subbituminious and lignite began to be mined in measurable quantities.

EPA stiffened stack-gas emissions standards at this time, and the only coals that would pass were the western "clean" coals, an East West bituminous-subbituminous mix, or eastern bituminous of less than 1% sulphur content or abouts.

The decisions made were environmental and economic, and had nothing to do with a scarcity of eastern reseves.

The decisions allowed utilities to comply with EPA, without having to retrofit aging plants with realitively costly state-of-the-art emission controls.

Course my memory fails me often, at my advanced age.

The U.S. goverment currently believes that we possess 275 billion (estimated recoverable)Tons of coal or about 250 years' worth, at current rates of burn.

And what TechnoP said below too.

 

"When the abyss stares at me, it wets its pants." Brian Hopkins

by EricC on Mon May 14th, 2007 at 02:42:00 PM EST
[ Parent ]
Is there data on estimated reserves vs. time? I'd expect that they've been increasing in concert with demand-driven exploration. Changes in the reserves/consumption-rate ratio might be enlightening.

Words and ideas I offer here may be used freely and without attribution.
by technopolitical on Sun May 13th, 2007 at 11:42:56 PM EST
I read that one too, DL, and agree with it completely.

Coal, will not, for the US, be an energy panacea, but with the reserves that we have, we might have a little more time to adjust.

I see coal, nuclear, and wind generating electrical power in US in 2070, with nuclear overtaking coal and wind perhaps maxed out at 20-30%. Hope a lot of vehicles will be running on cellulose ethanol.

Hell, I'm an optimist, I guess.

"When the abyss stares at me, it wets its pants." Brian Hopkins

by EricC on Mon May 14th, 2007 at 05:42:13 PM EST


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