by Judith Curry
China has no alternative to coal, with its domestic gas output limited and liquefied natural gas (LNG) imports more costly than coal. – William Durbin
All of the desires and efforts to reduce carbon emissions are up against this very inconvenient truth: World Coal Consumption to Surpass Oil by 2020 Due to Rising Demand in China and India. Excerpts from the Reuters article:
Rising demand in China and India will push coal past oil as the two Asian powerhouses will need to rely on the comparatively cheaper fuel to power their economies. Coal demand in the United States, Europe and the rest of Asia will hold steady.
Global coal consumption is expected to rise by 25 percent by the end of the decade to 4,500 million tonnes of oil equivalent, overtaking oil at 4,400 million tonnes, according to Woodmac in a presentation on Monday at the World Energy Congress.
China – already the top consumer – will drive two-thirds of the growth in global coal use this decade. Half of China’s power generation capacity to be built between 2012 and 2020 will be coal-fired, said Woodmac.
Power infrastructure provider Alstom estimated that across Asia close to half of the 600 gigawatt of new power generators to be built over the next five years will be coal-fired, Giles Dickson, a vice president at the company said.
“Coal prices are low,” he said, adding that coal is about one-third of the price of LNG in Asia and about half of the gas price in Europe.
Abundant supply is also supporting demand for coal. The traded volumes of coal will increase by a further 20 percent by 2020, Dickson said, including supply of lower grade coal from Indonesia, Australia and South Africa.
“As the lower grade coal comes into the market, further downward pressure on prices will further drive demand,” he said.
“If you take China and India out of the equation, what is more surprising is that under current regulations, coal demand in the rest of the world will remain at current levels,” Durbin said.
High fuel import costs and nuclear issues will support coal use throughout Northeast Asia, while in North America coal is still competitive in many locations despite abundant low-cost shale gas.
“The struggling economy and low coal prices has rendered the European Union (EU) Emissions Trading Scheme (ETS) ineffective,” Durbin said. “The carbon price will need to reach 40 euros per tonne to encourage fuel switching, which is unlikely before 2020.”
This will contribute to a doubling of the region’s energy-related carbon dioxide emissions to 2.3 gigatonnes by 2035, according to the IEA.
JC comments: With substantial efforts in the U.S. to move away from coal, this article reminds of the global energy dynamics and economics that are in play. I checked the spot price of carbon on the EU TS, and it is about 5 Euros. The political feasibility of a global carbon market with a carbon price of 40 Euros per ton is probably zero.
With that inconvenient truth, perhaps it is time to start looking at the climate-energy nexus in a different way:
- a broad range of scenarios of future climate that consider not only greenhouse emission scenarios but also natural internal variability and changes in natural forcing to support better assessments of energy demand and supply
- assess regional benefits as well as dangers associated with the varying scenarios of future climate
- develop tactical and strategic regional adaptation plans to reduce vulnerability to extreme weather events, climate change, and sea level rise.
Focussing our scientific and policy efforts on climate model simulations that are able only to predict (at best) the response to increasing greenhouse gases and carbon mitigation policies are strategies with diminishing returns and likelihoods.
WIth regards to climate science, I am arguing that the focus needs to move away from a focus on projections of carbon dioxide-controlled climate and towards examining the more complex dynamics (external and internal) at play that determine both global and regional climate.