The International Energy Agency expects coal production to nearly double by 2030 in their World Energy Outlook 2008 if no large scale governmental intervention occurs. In this post, I analyse the likelihood of this happening from the perspective of available coal reserves.

My conclusions are that if we look at a global level, taking coal reserve data at face value, the global IEA reference scenario for coal production to 2030 is possible. However, when focusing on China, the country that now produces 41% of all coal, the scenario is unlikely to occur because China possesses insufficient coal reserves to sustain production to 2030 at the level expected by the IEA. Only in a highly optimistic case, if China's coal reserves are more than double those currently known, will China be able to sustain coal production as expected in the IEA reference scenario.

Based on available coal reserve data and scenarios (EWG 2007; Tao and Li 2007), it is much more likely that China will reach a plateau in coal production somewhere between 2015 and 2025. The implications of this are significant, because it will be extremely difficult, if not impossible, to substitute other energy sources for coal on the vast scale needed for Chinese growth. The quality of reserve data is poor, however. Better reserve data is needed, particularly for China, to have certainty with respect to these findings.

In a follow up post, I will take a look at the short term prospects to 2015 for coal production, imports, exports, and prices in relation to the World Energy Outlook 2008.

As the first gentle snowflakes of winter settled on the windscreen of my car I was reminded, yet again, of the turning of the seasons and our need for power to keep us warm through the coming months. Last week I commented on how jobs might be created as the pattern of power supply begins to change, particularly with the incentives that might be a part of a new initiative. Two factors often get understated, however, in the current anticipation of the changes that a new Administration may bring. The first of these is the time that it will take to get any decision implemented at a scale that can be meaningful, and the second is the scale itself of the problem that now faces us.

Tomorrow we continue looking at the IEA WEO 2008. Tonight there is a press release by the Sierra Club. (Hat tip Jerome)

In a move that signals the start of the our clean energy future, the Environmental Protection Agency’s Environmental Appeals Board (EAB) ruled today EPA had no valid reason for refusing to limit from new coal-fired power plants the carbon dioxide emissions that cause global warming. The decision means that all new and proposed coal plants nationwide must go back and address their carbon dioxide emissions.

One of the considerable differences between the ongoing financial problems of the world, and the coming energy crisis lies in the nature of the commodity of concern. In the first case the problem focuses around money, though not really the physical and tangible cash that one uses less and less to pay for groceries, the rent, or the occasional book. The US has already transitioned to a point that more than half the time we use credit and debit cards to pay the bill. (The quote is from a year ago)

As debit card and credit card purchases become increasingly popular, check and cash payments continue to lose out. These traditional payment methods now account for less than half of all transactions, and a recent rule change by the Federal Reserve Board should tilt the balance even further away from paper transactions and toward plastic payments.

As a result, for the vast majority of us who do not keep our money in the mattress, financial solvency and insolvency is defined by electronic statements about the nature of our accounts, without there being a pile of gold sitting in the bank to define it. And, when the banks and other companies holding such accounts get into trouble, loans can and have been arranged for them, that are similarly electronic transactions, without large trucks pulling up at either Fort Knox, where 147.3 million ounces currently sit, or to the Federal Reserve Bank in New York, that holds about 216 million ounces. Rather the transactions occur electronically, and there is relatively little need for the physical presence of the cash.

Contrast that with the realities of an energy crisis. We cannot heat our homes with the promises of oil, or the electronic transfer of ownership of fragments of a tanker load making its way from Ras Tanura to the Gulf ports. We need the physical presence of the oil, natural gas or wood that we will consume. When we run out, we need to get some more.