The Dernogalizer

May 17, 2009

Peak Coal

Filed under: Energy/Climate — Matt Dernoga @ 5:36 pm
Tags: ,

There are plenty of reasons why burning coal is a bad idea.  Most of all being destruction of the planet.  One of the comments Steny Hoyer made at the town hall meeting last Monday in defense of pursuing clean coal technology is that we have over 200 years worth of coal supply and most Americans would say “if you have such a resource, you oughta use it”.  Touching.  But what if our coal supply isn’t as wondrous as we thought?  Some new studies have knocked down the world’s estimates of mine-able coal reserves from 3,400 billion tons to 666 billion tons, nearly a sixth of what was originally anticipated.  They now predict that peak coal will come somewhere in the date range of 2025-2035.  This will have huge implications regarding the price and availability of electricity, and if we are anywheres near as dependent on coal as we are now, it will spell disaster.

One thing that we need to be careful of when we estimate reserves of coal, oil, and every other resource is the major difference between current reserves, potential reserves, and resource endowment.  Current reserves are the amount of coal that’s min-able at an extraction cost that makes it profitable.  If there is coal out there to be mined which isn’t profitable because it is too hard to access, or doesn’t have a high enough energy content, then it will be left in the ground.  We would choose to consume a different kind of energy instead.  This is natural resource economics 101.  Potential reserves includes the coal that is currently unprofitable, current reserves do not.  In order for potential reserves to become current, there would need to be a technological breakthrough, or the price consumers are willing to pay for coal would have to rise, but still be cheaper than other alternative energy sources.  I would consider both  unlikely.  Resource endowment is the entire amount of coal available in the earth’s crust, even if a lot of it can’t be profitably extracted.

A lot of times, when people are estimating how much of a resource we have, they calculate in potential reserves or the total resource endowment.  This allows organizations to skew the numbers and make it appear we have substantial supplies of oil, and massive supplies of coal.  The reality is that we may have large amounts of “potential reserves”, but the price we would be to be paying for these reserves for them to leave the ground is ridiculous.  For example, the oil shale that some talking heads propose we pursue in America costs over $200 a barrel of oil to make.  The only way it would leave the ground would be if the global price for a barrel of oil goes well over $200.  Unless you’re content with paying $6-7 a gallon for gasoline from oil shale, this isn’t a viable option.  The same goes for coal.  Peak coal in 2025-2035 essentially means at that point, a lot of the cheap accessible coal will have already been burned.  What will be left is not as high a quality, more expensive to extract, and harder to find.  Coal prices will slide upwards considerably from this point forward.  We’re already about to see it with oil prices, and were witnessing it until the economy tanked.  Once the economy recovers, oil is going to skyrocket, and extracting oil from shale in the Rockies isn’t going to bring down the price anywheres below $200 a barrel.  I can guarantee you, and so can the researchers in the study I’ve linked above, that we will face these same difficulties with coal.

This is all just another reason why we need to get off of fossil fuels.  Excerpts below.

“Forget peak oil — a series of new estimates of the world’s coal supply suggests reserves may be vastly overestimated, and if the planet isn’t running on a majority of alternative energies within the next few decades, we could be facing an unprecedented global energy crisis.”

“When he applied the same formula to coal data from around the world, the results were startling: the United Nations Intergovernmental Panel on Climate Change’s maximum estimate for extractable coal is about 3,400 billion tons. Rutledge’s calculations suggest just 666 billion tons.”

“I think we’ll see peak coal somewhere between 2025 and 2035,” Richard Heinberg of the Post Carbon Institute in California said. “This has huge economic implications. Without growth in our energy supplies, it’s very difficult to see how we’re going to grow the economy.”

**Update 6/8/09**  AH-HA!



  1. and you left out part where investing in CCS would actually bring about the peak of coal about 5 years sooner, because it would add to the cost of production.

    just as we’ve located and used up most of the world’s best natural gas and oil supplies, we have also burned the best coal, the high-energy black coal.

    the supposed vast 200 year reserve is based on mainly lower-quality bituminous coal, and subbituminous coal and lignite or brown coal. those types of coal do not produce as much energy, so the amount of coal we dig out of the ground can remain the same, but we’re not getting the same energy from it.

    much like the end of an oil well, where instead of the nice sweet crude oil you get when you start the well, we’re left now with the less-energy stuff.

    it’s also why we are blasting the tops of mountains off, to get to that less-good coal, all the good stuff is gone.

    it was a play designed by the coal industry (along with their soon-dropped idea of liquid coal) to cut out the oil industry–so much talk was going on with the war in iraq and its link to oil, that coal decided to push the idea of 200 years worth of coal reserves and “energy independence.” drill baby drill taught coal a lesson. it’s always interesting to see special interests fight each other….

    on the bright side, we’d have 200 years worth, if we just stop burning it today. hell, we’d have thousands of years.

    Comment by Susan — May 18, 2009 @ 11:35 pm | Reply

    • Thanks for the comment Susan, and for adding more context to the coal supply issue.

      Comment by Matt Dernoga — May 19, 2009 @ 12:29 am | Reply

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