Tuesday, February 22, 2011

Peak coal is not imminent

Some PO writers have recently claimed that peak coal is very imminent. One article on TheOilDrum claimed that peak coal will hit sometime this year (2011), while another paper claimed that peak coal will occur sometime in the next 15 years.

Here's a quote from the article on TheOilDrum:
"Dave Rutledge might have been the first to produce such a forecast, with the conclusion that coal extraction will come to a peak in 15 years. Kjell Aleklett's research group reached the conclusion that an all-time maximum would occur in about 10 years. But by bringing the peak forward to 2011, Tad Patzek drew the attention of, and gained the honour of coverage by a magazine the caliber of National Geographic."

These estimates of imminent peak coal are drastically at odds with the convetional view of coal availablility. For example, the USGS claims that we have enough coal for centuries. And some other sources have gone so far as to claim that coal is not only abundant, but "super-abundant" and could fulfill all our energy needs (including transportation needs through coal liquefaction) for centuries.

Which of these two views is correct? Do we face an imminent shortage of coal, or do we have vast amounts of the stuff?

I don't know when coal will peak, but I'm certain it won't peak soon. My reason is economic. At present, there is very little worldwide trade in coal. Each country meets its demand for coal from its own domestic mining and supply, with only a few exceptions. This fact implies that we are not approaching peak coal. It means that even the countries which have very small coal reserves and high consumption still haven't hit their own local peaks of coal yet, and therefore have no need to import it. For example, China mines coal at 3x the rate of the United States, yet has half the reserves or less, but China hasn't reached its own peak of coal yet. In fact, China tripled its rate of domestic coal production over the last 15 years which suggests that it's not even approaching peak coal within its own territory. If China isn't facing a local peak of coal, then the United States certainly isn't, since the U.S. has twice the reserves as China and a far lower rate of extraction.

Peak coal won't happen until after the major consumers of coal (like China) have hit their own peaks and begin importing huge amounts of the stuff from the USA and elsewhere. Only then will there even be a world market for coal in which a worldwide Hubbert-type peak would even be meaningful. The worldwide peak of coal will happen decades after the worldwide market for coal has been established. Peak coal will happen when China has been importing huge amounts of coal from the U.S. for decades, and when the U.S. starts to run out.

There are also other reasons to believe that peak coal is not imminent. The USGS and others have documented massive coal resources in the North Slope of Alaska that are totally undeveloped at present, and that contain more coal than the rest of the world combined. These estimates of massive reserves are disbelieved by peak coalists, because the estimates are uncertain, and because the data are of low quality. However, the absence of high-quality data suggests that peak coal is not imminent, because we're not even bothering to search for coal yet in far-flung places. We haven't even bothered to start digging in Alaska to find out how much is there. We won't reach peak coal until we've searched everywhere in the world for it and can't find any new large mines, despite a gradual depletion of the old ones.

In some ways, the coal market today is analogous to the oil market in the 1950s. In the 1950s, most countries met their demand for oil through local production. For example, the US was the largest consumer of oil (by far) but had little need to import any, since it could satisfy its oil demand using its own fairly modest reserves. Furthermore, nobody had bothered to search far-flung places for oil yet, because doing so wasn't necessary. There were rumors of vast resources in the middle east and elsewhere, which lay totally unexploited and mostly unsurveyed.

That situation is what we face today with coal. China hasn't begun importing very much, and the United States, which is like the Middle East of coal, hasn't even begun exporting very much. Furthermore, we haven't even explored for coal worldwide, because we haven't started to run out of our local supplies. In these regards, the market for coal is exactly analogous to the market for oil in the 1950s, six decades before the worldwide peak.

In short. The worldwide coal peak appears not to be imminent. Peak coal is at least several decades away. We'll know that peak coal is approaching when the following conditions are met: 1) the major coal consumers, like China, have hit their own local peaks of coal and are importing huge amounts of the stuff from the USA; and 2) coal companies have charted everywhere in the world and have exhausted new places to look for coal. When those two conditions have been met, we'll know that the peak of coal is only a few decades away. With oil, both of those conditions were met at least 50 years before we reached peak oil worldwide.

I don't think there's any way to know right now when peak coal will occur. We haven't even bothered to search for coal worldwide, so we don't know how much is available in Alaska or elsewhere. At this early stage, we don't even have a good worldwide picutre. All we can know is that peak coal is not imminent.