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Coal is stockpiled at the Blair Athol mine at the Bowen Basin coal field in Australia. Australia is the world’s largest coal exporter. (STAFF/JIM REAGAN/REUTERS)
Coal is stockpiled at the Blair Athol mine at the Bowen Basin coal field in Australia. Australia is the world’s largest coal exporter. (STAFF/JIM REAGAN/REUTERS)

Neil Reynolds

Coal: The rising star of global energy production Add to ...

Coal has had a good run in the past five years – sweeping up the energy equivalent of the Academy Awards for best foreign film in four of them. (Though shot principally in China, these epic productions mostly starred American or Australian actors.) Notwithstanding its bad-boy reputation as a despoiler of the heavens and the Earth, coal has emerged as the fastest growing of all fossil fuel. It works hard (especially when pulverized into powder and burned super-hot). It’s relatively cheap.

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And it has substantially cleaned up its environmental act. Honest. Energy expert Robert Bryce says, for example, that the cleanest U.S. coal-fired electricity plants now exceed all traditional Environmental Protection Agency pollution standards. Combine these advantages and you have blockbuster box office.

BP’s annual statistical review reports that global coal production increased 6 per cent last year, twice the celebrated rate of increase in global natural gas production. This most notorious of fuels now accounts for 30 per cent of global energy consumption – the highest percentage since 1969. It will almost certainly account for more in the years ahead. It is, after all, one of the cheapest primary sources of energy in the world. And its reserves are, for all practical purposes, inexhaustible.

In a word, coal plays an increasingly important role in the great American energy renaissance. Oil production is on the rise. Natural gas production (and shale gas production) is on the rise. Coal production is on the rise. For the past five years, U.S. increases in coal exports have been quite remarkable.

Using 2005 as a base year, the U.S. Energy Information Agency reports that U.S. net coal exports increased 70 per cent in 2007, 107 per cent in 2008, 71 per cent in 2010 and 49 per cent in 2011. (In 2009, the year of the market meltdown, exports fell by a relatively restrained 23 per cent.)

Yet Americans themselves are consuming less coal – 5 per cent less in the past decade. As U.S. electrical producers shift from cheap coal to cheap natural gas, more coal will be released for export to other countries (where demand for coal increased by almost 50 per cent in the same decade, the energy equivalent of 23 million barrels of oil a day). Already the world’s fourth-largest coal exporter, after Australia, Indonesia and Russia, the U.S. could plausibly become the world’s largest exporter in coming years. The United States possesses more coal reserves, after all, than any other country.

How much more? Energy analyst Robert Bryce, a senior fellow at the Manhattan Institute, says U.S. coal reserves contain nearly as much energy as the proven oil reserves of all 12 Organization of Petroleum Exporting Countries combined. U.S. coal deposits, he says, hold the energy equivalent of 900 billion barrels of oil. The OPEC countries have proven oil reserves of one trillion barrels.

Plentiful supplies of coal explain the rapid American advance toward energy independence. Coal that used to generate electricity can now be exported to Asian and European countries where – Mr. Bryce’s words – “gargantuan quantities” will be needed for many years. At the same time, the domestic conversion to natural gas will reduce American emissions of greenhouse gases: a global plus. In a report last year, the Columbia Law School’s Center for Climate Change explained the paradox this way: “[I]t makes no difference from a climate-change perspective whether coal mined in Wyoming is consumed in Chicago or Shanghai.”

“To be clear, I’m all for natural gas,” Mr. Bryce says in his most recent piece on coal in the National Review online. “I’m also adamantly pro-nuclear. But it makes no sense for the U.S. to abandon coal, particularly given that … the rest of the world is continuing to burn gargantuan quantities of the fuel.”

With market forces in energy production comparable to the United States, Canada should be able not only to generate more electricity with clean coal but, indeed, to mine more coal for export. Natural Resources Canada reports that Canada’s coal production set a record evaluation last year: $7-billion, a one-year increase of 27 per cent. Not bad for off-Broadway.

But most Canadian coal production comes, as does most Canadian oil production, from the western provinces. You would never know from Ontario Premier Dalton McGuinty – still foolishly pledged to eradicate the cheapest of fuels – that Ontario is itself a resource-endowed province with coal of its own to burn.

 

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