Peak Coal: Coming even sooner than we thought?

September 10, 2010 by Ken Ward Jr.

Gazette photo by Chip Ellis

We’ve written before here about Peak Coal, with previous posts here, here,  and here.

But thanks to Coal Tattoo reader Mike Roselle for pointing out in yesterday’s comments section a new article in National Geographic that reports:

No matter how bad coal might be for the planet, the conventional wisdom is that there is so much of it underground that the world’s leading fuel for electricity will continue to dominate the energy scene unless global action is taken on climate change.

But what if conventional wisdom is wrong?

A new study seeks to shake up the assumption that use of coal, the most carbon-intensive fossil fuel, is bound to continue its inexorable rise. In fact, the authors predict that world coal production may reach its peak as early as next year, and then begin a permanent decline.

The study, led by Tad Patzek, chairman of the Department of Petroleum and Geosystems Engineering at the University of Texas at Austin, and published in the August issue of Energy, predicts that by mid-century, the world’s coal mining will supply only half as much energy as today.

The idea that the world will face “peak coal” as soon as 2011 flies in the face of most earlier estimates and analysis.

The article notes the optimistic estimates frequently tossed around by the industry and by pro-coal politicians, but says:

… The Patzek study paints a far different picture—and not because people will use up the last of the coal in the ground. Rather, the world will finish off the coal that is easy to reach and high-quality—the coal that produces a large amount of energy per ton, the new study says. What remains will often be of lower quality, and progressively harder to dig up and bring to where it is used.

The study’s prediction for the time of the peak—actually a peak in the energy produced by global coal production—may not turn out to be exactly right, Patzek said. “I’m not saying that on July 1, 2011, there will be a peak.”

But the main thrust of the study is stark: “We are near or at the peak right now,” he said.

This is a very important story that I urge Coal Tattoo readers to spend some time with …

28 Responses to “Peak Coal: Coming even sooner than we thought?”

  1. Thomas Rodd says:

    As you note, Ken, the study in National Geographic story is in line with some other studies that have been discussed on this blog. It would be helpful to readers, Ken, if you could link to a copy of the study itself.

    The editorial about “Saving Coal” in this morning’s Gazette was well-reasoned and thoughtful. Senator Rockefeller properly criticized the West Virginia media for being like a bunch of evolution-deniers or flat-earthers — when it comes to the hard facts of humanity’s effect on the global climate through greenhouse gas emissions, especially CO2.

    Apparently coalfields media people think they are helping their local appeal by promoting climate change denial. They can claim to be “skeptics,” but what they don’t understand is that it is scientists who are skeptics, and who have been dragged into accepting the fact of climate change by the overwhelming evidence.

    Of course, pandering to the public by saying that dinosaurs may well have walked the Earth with humans doesn’t really hurt anyone’s children and grandchildren.

    But as Senator Rockefeller made clear, saying that humanity can get by on Earth without radically limiting carbon emissions is a recipe for unmitigated disaster.

    Eyes wide open!

  2. Don says:

    You mean the way that the Anthracite region in PA used to be the preferred source of high quality coal and was pretty much mined out?

  3. morgantowner says:

    Here’s the article info:

    TY – JOUR
    T1 – A global coal production forecast with multi-Hubbert cycle analysis
    JO – Energy
    VL – 35
    IS – 8
    SP – 3109
    EP – 3122
    PY – 2010/8//
    T2 –
    AU – Patzek, Tadeusz W.
    AU – Croft, Gregory D.
    SN – 0360-5442
    M3 – doi: DOI: 10.1016/j.energy.2010.02.009
    UR – http://www.sciencedirect.com/science/article/B6V2S-50338NC-1/2/763ad76a2759e986ce178f260c80f650
    KW – Carbon emissions
    KW – IPCC scenarios
    KW – Coal production peak
    KW – Coal supply
    KW – Conservation
    KW – Efficiency
    ER –

  4. Ken Ward Jr. says:

    Tom,

    There’s a link to the journal article in the National Geographic piece, but here’s a direct link:

    http://tinyurl.com/32lffwm

    Unfortunately, it’s a subscription only journal, like so many scientific journals. Folks who have access to a university library can easily get a copy.

    Here’s a link also to today’s Gazette editorial, which you referenced:

    http://wvgazette.com/Opinion/Editorials/201009090723

    Ken.

  5. Concerned Miner says:

    First of all the fact that the author is chairman of a petroleum department at a Texas college should raise an eyebrow…but I think he is mostly correct. The average working mine engineer can tell you that the reserve numbers published by various agencies are greatly inflated. Most of the people publishing those numbers have never had to produce coal economically. I can only speak for the central app coal fields (the western reserves are a different story) but central app in general and WV to be specific most likely hit its peak production 10-15 years ago. The highest production levels in WV were in 1997 with nearly 182 million tons produced.

    The problem is that current permitting issues will not allow the production of WV coal to follow the slow natural decline that the reserves indicate it should. Most coal miners I know, and yes no matter what some of your readers say surface coal miners are coal miners, realize that their kids will not be coal miners, at least in WV. With 3-5 years remaining on current permits it will be difficult for the 50 year old unemployed miner to send his kids to college to become something other than coal miners.

  6. scs2016 says:

    I would caution readers to consider the methodology employed by this study. The analysis is based on historical production analysis — Hubburt-style.

    Here’s the abstract of the paper, which should count as fair use:

    Based on economic and policy considerations that appear to be unconstrained by geophysics, the Intergovernmental Panel on Climate Change (IPCC) generated forty carbon production and emissions scenarios. In this paper, we develop a base-case scenario for global coal production based on the physical multi-cycle Hubbert analysis of historical production data. Areas with large resources but little production history, such as Alaska and the Russian Far East, are treated as sensitivities on top of this base-case, producing an additional 125 Gt of coal. The value of this approach is that it provides a reality check on the magnitude of carbon emissions in a business-as-usual (BAU) scenario. The resulting base-case is significantly below 36 of the 40 carbon emission scenarios from the IPCC. The global peak of coal production from existing coalfields is predicted to occur close to the year 2011. The peak coal production rate is 160 EJ/y, and the peak carbon emissions from coal burning are 4.0 Gt C (15 Gt CO2) per year. After 2011, the production rates of coal and CO2 decline, reaching 1990 levels by the year 2037, and reaching 50% of the peak value in the year 2047. It is unlikely that future mines will reverse the trend predicted in this BAU scenario.

    http://dx.doi.org/10.1016/j.energy.2010.02.009

  7. Ken Ward Jr. says:

    scs2016,

    Thanks for posting the abstract … I should have thought to do that.

    The National Geographic article explains the method this way, pointing out that it is controversial:

    “Patzek’s study uses a version of a method developed by the legendary father of “peak oil” theory, Marion King Hubbert, to analyze coal reserves. Hubbert, at the time a Shell Oil petroleum geologist, used prior production history to correctly predict 15 years in advance that U.S. oil production would peak in the early 1970s.

    “Hubbert’s method, a controversial one, assumes that production follows a bell-shaped curve over time.

    “When there are many different oil wells or coal mines operating independently, the sum of all their production tends to follow such a bell curve over time—starting off small, rising to a peak, and then dropping again as the resources are depleted.

    “Oil in the United States has followed this pattern, as has coal in the United Kingdom.”

    Ken.

  8. Ken Ward Jr. says:

    Concerned miner,

    I wonder if you could provide some evidence for this statement:

    “The problem is that current permitting issues will not allow the production of WV coal to follow the slow natural decline that the reserves indicate it should.”

    As well as for this one:

    “…With 3-5 years remaining on current permits …”

    I’m not arguing against this — I’m asking for more information so I can understand the validity of your statement.

    Ken.

  9. Concerned Miner says:

    Mining companies traditionally work off of 5 year mining plans updated anually. When working on a 5 year plan if you see permitted reserves dropping off in years 4 and or 5 you begin the permitting process. Since the very late 90’s and early 2000 mine permits have become smaller than some of the very large permits that were issued in the 80’s that supported draglines, the newer permits usually cover about 10 years of mining. New mine permits have been basically cut off for the last 2 years making the out years in most 5 year plans I have seen in 2009 and 2010 look somewhat bleak in years 2014 and 2015 unless new permits are approved in 2012 and 2013. I can’t direct you to any published data, just my 30 years of experience and discussions with others in my profession.

  10. Montanus says:

    Remember this is _old_news_ in Central Appalachia — where the decline will be especially sharp over the next decade.

    Wood MacKenzie (the old Hill & Associates) produces the best coal forecast for Central Appalachia. A precise of their recent steam coal forecast has been out for awhile for free (via WVU BBER) and it clearly shows that southern WV steam coal production is expected to decline 60% over the next decade. See p. 24:

    http://www.be.wvu.edu/bber/pdfs/BBER-2009-14.pdf

    I don’t think the WV budget office buys the WoodMac forecast, but they do use a comparable product from IHS Global Insight — unfortunately, the state only buys a 5-year estimate, so this precipitous decline has not yet been “officially” recognized by the state of WV.

  11. Thomas Rodd says:

    The article costs $35.95. I’ll pass for now.

    This charge is an example of how important source materials are much less readily available to the public than they should be. Maybe someone will contact the author and ask him to post the article, after the journal has been out for a while, if he is allowed.

    Are Professor Hendryx’s articles on geographic correlations between coal production and mortality available online without cost?

    Meanwhile, a great series of comments above, showing how good this blog can be.

  12. Ken Ward Jr. says:

    Montanus of course raises a vital point … discussed many times on Coal Tattoo, especially in light of this report:

    http://blogs.wvgazette.com/coaltattoo/2010/01/19/must-read-report-the-decline-of-central-appalachian-coal/

    Regardless of what happens with climate change rules or MTR regulations, coal production in Central App (Southern WV and Eastern KY) is expected to drop dramatically over the next decade.

    The region needs to prepare for this, but you can’t find any political leaders who want to confront this challenge — which matters a lot to families of people like Scott14 and to the folks Concerned Miner is talking about.

    Ken.

  13. Gary Lee Corns says:

    Although the Nat-Geo artilce is based on a study by a well respected professional, the “news” from China and India seems contradictory as to the predictions made. Here are a couple of recent articles for consideration.

    ttp://www.smh.com.au/business/world-business/powerhungry-india-seeks-coal-reserves-20100801-111de.html7

    http://www.nytimes.com/2009/05/11/world/asia/11coal.html?_r=1

  14. Casey says:

    Ken, I think declining coal production matters not just directly to mining families but to just about everyone in the state. Of course there are the indirect jobs but also there are indirect benefits relating to general service industries supporting the direct and indirect jobs.

    If mining jobs decline then teachers, municipality workers, nurses, etc decline also. Population decreases from job losses, or increased unemployment, causes tax revenue to decline (or services), reduced home values, and other negative consequences. Politicians understand this but being shortsighted that don’t always look ahead and plan far enough, as you said.

    And that is why an improved business climate is so important to WV and its citizens unless we want to continue to be leaders in many unfavorable categories. To no one in particular “It’s the economy Stupid!”.

  15. Amanda Starbuck says:

    Richard Heinberg wrote extensively about the acceleration of Peak Coal in last year’s Blackout.

    Now, this month, he makes a pretty compelling case for ‘Peak Everything’
    http://richardheinberg.com/220-peak-everything

  16. Ken Ward Jr. says:

    Casey,

    You’re absolutely right in some ways … I would say that the available evidence shows coal does not have nearly the economic impact it once had statewide … mechanization and other changes have seen to that. But in places where coal is mined, it is a major part of the economy and clearly drives the creation of many other sorts of businesses and jobs — from convenience store clerks to newspaper reporters.

    Ken.

  17. Casey says:

    From above Heinberg link “As I argued in my recent book Blackout, there are hard limits to China’s coal supplies (the world as a whole will experience peak coal consumption within the next two decades, but China will get there sooner than most other countries because of its extraordinary consumption rate—currently three times that of the U.S.)” There are several different views on when peak coal will occur but projecting technology changes (and economic) is beyond most forecasters. I never thought 30 years ago that 30 inch coal would be productively underground mined. What assumptions are in current forecasts that may prove inaccurate?

  18. Ken Ward Jr. says:

    Casey,

    In other words, to quote the study that was the subject of this blog post:

    Because this study is a multi-cyclic Hubbert analysis, the
    possibility of future cycles that are not reflected in the historical
    data must be considered. The base-case in this study includes all
    coal-producing regions with any significant production history.
    New mines in existing coalfields should be part of existing Hubbert
    cycles and thus are part of the base-case. New cycles could occur if
    a technological breakthrough allowed mining of coal from very thin
    seams or at much greater depths, or if non-producing coal districts
    become important producers. Since we do not extract all of any
    mineral resource, the technology argument will always be there.
    Looking at recent trends, improvements in coal mining technology
    have increased the proportion of coal that is extracted, but safety
    considerations have limited depth. Gradual improvements in
    recovery percentage should fall within the base-case; only a technology
    that allows access to a new population of coal seams should
    create a new fundamental Hubbert cycle, such as in unconventional
    natural gas recovery in the U.S.

  19. Lewis Baker says:

    If coal production peaks out and declines rapidly in WV, what fuel will replace it in production of electricity? No doubt natural gas will provide most of the replacement.

    According to US EIA website, the USA already has more than enough generating capacity in place at gas powered electric plants to replace all the coal used in USA. Gas plants now are running at about 22% capacity on average, mostly to provide peak demand when electric utilities pay top dollar.

    Since 2007 the price of gas has gone down and the price of coal has gone up. Relative to coal, gas costs about half what it did 3 years ago. Gas production is increasing, which drives its price is down.

    No douibt more and more coal will be displaced by gas. Only that coal that can compete with cheap gas will be used, and WV coal is not and will not be cheap.

    Although there will be negative impacts from a gas boom, some of its positives will include a new economic boom, more jobs than coal, half as much CO2 for the same amount of electricity, cheaper electricity, etc.

  20. Thomas Rodd says:

    Someone sent me a copy of the “peak Coal” paper. Some parts of it I can understand — but there’s a lot of math and some wild charts.

    The authors suggest that spending money on replacing dozens of existing old-fashioned coal plants with very efficient plants would be a better investment than implementing ccs in the us, becuase coal use is going to naturally decline by 50% due to declining reserves anyway.

    It’s an interesting argument and may have real merit — I am sure that it will prompt serious discussion.

    However, to me, as a layman, it does not reduce the force of the policy case for investing heavily in CCS immediately, to see how well it can be made to work, because there’s a decent chance humanity is going to need it to survive.

    And as for the political case, well, what more is there to say?

  21. Casey says:

    Lewis, at current coal prices natgas can displace coal if natgas is <=$4.50-$5.00. Natgas has a history of greatly fluctuating prices plus the demand is seasonal and it is not easily stored.

    Granted gas supplies are increasing but with increased demand from displacing some coal, natgas prices can easily skyrocket and who knows what effect traders will have when prices are moving. There definitely is a lot of LNG that could be imported if gas prices were higher though.

    Someone also has posted the much greater amounts of CH4 that the gas industry generates and of course CH4 is 23 times more potent at warming than CO2.

    I think coal and nuclear are the best bets for the electrical heavy lifting but renewables, conservation and CCS should be pursued.

  22. FactsFirst says:

    Lewis, actually natural gas prices jumped from $6.25 tcf to $7.96 tcf (27%) between 2007 to 2008. Yes, in 2009 the price dropped sharply, but to Casey’s point that tracks the volatility historicaly experenced for gas. The price of gas in 1998 was $1.96 tcf–in 2008 $7.96. Natural gas well production today is not appreciably higher than it was 35 years ago—1973= 19.4 billion cubic feet; 2008=19.9 bcf. To be sure, the unconventional sources being targeted now will provide much needed capacity as conventional sources decrease and supplies from Canada continue to drop. I would suggest that if natural gas prices remain low, production will follow that curve–i.e., drop unless the producers want to pursue a business model of low returns on investment by producing and selling at or slightly above cash costs–something I seriously doubt.
    As for the suggestion that there exists sufficient natural gas electric plant capacity to replace all of the coal fueled capacity, do not be fooled by the hype that is based upon comparing nameplate capacity. A good part of the NG nameplate capacity are single cycle units that are not built for 24/7 baseload use. Moreover, the reason why natural gas plants are utilized at 22% capacity (per your note–but I think its more like 28-30%) is economic dispatch. In 2008, coal plants delivered electricity on average at $2.07 mmbtu; natural gas plants at $9.02 mmbtu–that’s a huge difference and it also discloses what will happen when gas does displace coal electricity at greater rates. Between 1998 and 2008, electriciy generated by NG increased almost 30%. The average price of electricity increased about 50% during that period (the average fuel cost of gas delievered to powerplants increased almost by a factor of more than 3–$2.38 MMbtu to $9.02MMbtu). But it wasn’t only electricity consumers that took a hit, natural gas users (residential, manufacturing, etc) also took a jolt. The average price of gas delivered to the industrial sector increased from $3.14tcf to $9.67tcf. Well before the recent recession that manufacturing sector lost over 3 million jobs in large part due to increased energy prices.
    The Congresssional Research Service looked at the proposition of displacing coal generation with existing natural gas plants. While it found that theoretically this might displace somewhere between 16-28% of the nameplacte capacity, in terms of actual coal generation it would displace at most 5-9% with a reduction in CO2 emissions of only 3-5%.
    To Mr. Rodd’s point, I would agree that replacing old coal plants with new more highly efficient coal plants does not obviate the need for CCS. We will need CCS for coal and natural gas plants. But, the merits of replacing old with the new stands on its own. As the Patzek paper notes, these new plants can be as much as 50% more efficient–there is your immediate environmental dividend–50% reductions in CO2 compared to 5% by trying to squeeze in more NG for old coal. The longer term dividend is that these newer plants will be more suitable for CCS retrofits from a cost standpoint due to their higher efficiciency.

  23. FactsFirst says:

    Sorry, my earlier post on annual production from natural gas wells 1973 vs 2008 should read trillion cubic feet not billion cubic feet.

  24. Thomas Rodd says:

    Thanks factsgirst for an informative comment. Great dialogue here.

  25. Thomas Rodd says:

    Sorry Facts -F-irst for typo.!

  26. Monty says:

    When “peak coal” is coming, or if it has, indeed, already arrived, is not the main thing I take away from all these dueling reports and graphs and charts and analyses. They are never, ever going to agree.

    What IS coming to West Virginia, like it or not, is is a six-letter word – Change. Yes, we have mined coal in one form or another for more than 150 years. I have no doubt we will continue mining coal in one form or another for some years to come. But … not in the amounts or to the degree as in decades past. The change is already here, like it or not. We can start to plan for the change, but that will require a political will that has been lacking in this state for generations. We “keep on keeping on” because that is what always worked in the past – the coal kept getting mined, and people kept working. Only now there are thousands and thousands fewer doing the mining, and the majority of them are surface miners, and that does not pay as well as deep mining.

    King Coal has been in a long, gradual downward spiral in West Virginia for more than a generation, but it has been so gradual, the effects and warning signs have been easy to ignore or brush aside. Will CCS be coal’s salvation? I don’t know. But I do know that doing what we have always done in this state isn’t going to keep getting us the same results – we won’t be able to keep on keeping on. So far, Senator Byrd has been the only politician with the courage to come right out and say it – West Virginia can be part of the change, or it can get run over by it. Not getting run over will be far less painful in the long run, I think.

  27. Ken Ward Jr. says:

    Monty,

    I don’t believe you are correct when you state that the majority of West Virginia miners are working at surface mines … check out the DOE data on that:

    http://www.eia.doe.gov/cneaf/coal/page/acr/table21.html

    I’m also curious about your statement regarding deep mining versus surface mining pay … There is some difference in the average weekly wages, according to the state:

    http://www.workforcewv.org/lmi/EW2009/ew09x000.htm

    UG average weekly wage = $1,509.42
    Surface average weekly wage = $1,411.63

    That comes out to $78,500 roughly for underground miners and $73, 400 for surface miners … but that’s just an average.

    Personally, I happen to believe very strongly that West Virginia citizens and our leaders need very much to examine these forecasts about Peak Coal — because, in fact, almost all of the reasoned analysis I’ve seen project things in a way that is not nearly as hopeful for the coal industry’s future as political leaders here would like … perhaps the forecasts are wrong. But suppose they’re not … that means we need to get ready for it.

    Ken.

  28. Monty says:

    Ken – thank you for clarifying the employment numbers. My comment on pay was based on anecdotal information, nothing more.

    I share the concern about the peak coal forecasts because whichever way they come down, whenever the “peak” comes, change WILL come to WV, and it will be big. And permanent. And we are not, as things stand right now, remotely ready for it. Blogs like this one are an important tool in beating the warning drum, because (unfortunately) we cannot force our political leaders to listen. We can only present them with the best information and try to guide them to the decisions that will result in the least amount of pain inflicted on the greatest number of people.

    That is one reason I wish Sen. Byrd had hung on awhile longer – he had the political capital to make people pay attention when he said things like, WV has to be ready for change. Is the immediate outlook for coal bleak? Not at all. But what about 10 years down the road? 20 years? That is what I am prodding my elected leaders to start facing – now, while we still have a little time.

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