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.

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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.