Jun 23, 2014

Peak Coal: Why the Industry’s Dominance May Soon Be Over by Fred Pearce:

The coal industry has achieved stunning growth in the last decade, largely due to increased demand in China. But big changes in China's economy and its policies are expected to put an end to coal's big boom.

by fred pearce: After a decade in which coal has been grabbing an ever-larger share of the world's energy supply, could coal's boom be about to turn to bust? Both the United States and China are planning to curb coal, and analysts say the repercussions for the global industry could be dramatic. The world may soon breathe a great deal easier, as the biggest contributor to both urban smog and climate change goes into decline.

Earlier this month, the Obama administration announced curbs on CO2 emissions from coal-fired power plants, designed to deliver a cut in U.S.
Chinese coal worker
AFP/Getty Images
A worker shovels coal at a mine facility in Anhui province in eastern China.
carbon emissions of 30 percent between 2005 and 2030. The Environmental Protection Agency estimates that the measures, combined with the growth of natural gas fracking, will take coal's share of U.S. electricity production from more than 50 percent in the late 1990s to 31 percent by 2030. Within hours of the U.S. administration's announcement, there were renewed hints that China – the world's largest coal user – is headed in the same direction. 

Market analysts are suggesting that investors are about to pull the plug on coal. And as the coal tide retreats, the planet's vast investment in coal infrastructure could start to look as dumb as a subprime mortgage in 2007.
For all the talk of cutting emissions, coal's share of global energy use has risen in the last ten years.

This would be a huge turnaround. The rise in the past decade of coal, the most carbon-intensive of major fossil fuels, has been astounding. For all the political talk of cutting carbon emissions, coal's share of global energy rose from 25 to 30 percent. Most of this was due to China, which gets 80 percent of its electricity from coal. 

As the world's largest energy user and CO2 emitter, China currently uses almost 50 percent of the world's coal. A staggering 82 percent of the global increase in coal use since 2000 has been attributable to China, according to the U.S. Energy Information Administration. 

Having outstripped its own large coal reserves, China has been ransacking the world for coal, driving massive investments in new mining, notably in Australia, Indonesia, and Mongolia, but also in South Africa, Russia, and Kazakhstan. Its state-owned Shenhua Group is the world's largest coal company, almost twice the size of U.S. giant Peabody Energy. 

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Peak Coal: Why the Industry's Dominance May Soon Be Over by Fred Pearce: Yale Environment 360