Energy and the Earth

Energy and the Earth

If you think King Coal is dead, think again …

If you are like me, and concerned about the possibility that rising CO₂ levels in the atmosphere are jeopardising climate stability, the latest BP Statistical Review of World Energy makes for sobering reading.

BP’s Statistical Review provides a comprehensive update on energy resource production and consumption by country, region and the world. In the latest update released mid June, BP estimates that global energy consumption grew by 2.5% in 2011. That is pretty much in keeping with the long-term trend, so nothing exceptional in that.

However, the figures on coal production are truly mind-boggling.

BP estimates that in 2011 global coal production increased by an extraordinary 440 million tonnes. In absolute terms, that is the biggest annual increase on record. At 6% over the year, it comes on top of a 5% increase in 2010, and tops off what has been a phenomenal 10-year increase in annual production of almost 3 billion tonnes at an annual average growth rate of 4.6%.

BP Statistical Review of World Energy June 2012. M. Sandiford

In 2011 global coal production was 7.7 billion tonnes. To put that in context, it is only slightly less than the amount of rock moved from mountain to sea each year over geological time by rivers and glaciers. In energy terms it is equivalent to almost 4 billion barrels of oil.

On an energy basis, oil only just edged out coal as king of the energy resources by the equivalent of 40 million barrels, or about 4 days of production.

But with oil production growing at only about 1% last year, coal is set to surpass it as the most important energy commodity sometime this year. In fact, it probably has already.

BP Statistical Review of World Energy June 2012. M. Sandiford

This marks a phenomenal turn around for the fortunes of coal.

Coal first replaced bioenergy as king of energy resources in the late 19th century. In 1966 it was displaced by oil. Relatively speaking, coal then headed rapidly south. Between 1989 and 1993 coal production actually declined in real terms. Despite mild growth in the mid-late 90’s, coal continued to lose ground to oil, and as recently as 2000 coal provided as little as ⅔ the energy of oil.

That all changed in 2002 with the awakening of the Asian giant, turning the fortunes of the coal barons and coal-exporting countries alike.

Where does Australia stand?

Australia was the third largest producer in 2011 at 415 million tonnes, or a bit under 6% of global production. Australia’s production was dwarfed by China which produced half of all the world’s coal, and ¾ of its growth in 2011. In fact, last year Australia’s production was marginally down on 2010 levels. In 2011, Australia’s production was about 42% that of the US, and marginally more than both India and Indonesia.

Where Australia stands out is in its per capita production. At 18.6 tonnes per person, it outstrips other top producers by a huge margin. China and US per capita production stands at 2.6 and 3.2 tonnes per person, respectively.

Where to from here?

In its latest update, BP estimates the global coal reserve at about 860 billion tonnes. With a reserve to production ratio of about 110 years, we are not set to run out of coal soon. Not at least using it at current rates. However, if we were to continue to increase production at the historical growth rates of about 2.5%, the current reserve would last only about 50 years.

Such calculations have motivated some talk of ‘peak coal’. However, as with any resource, we can expect scarcity will breed desire and the reserve pie will be topped up for years to come. A doubling of the reserve is entirely possible.

In our own back yard, in the Latrobe Valley, the demonstrated brown coal reserve is about 40 billion tonnes, representing about 5% of the global reserve. But the inferred resource is estimated at a staggering 100 billion tonnes, some or all of which could conceivably become economic at some future time.

That is a truly phenomenal amount of coal. At the current production rates of around 70 million tonnes per year there is enough coal in the Latrobe for 1500 years.

Of course, mining it all would turn the entire valley into a 100m deep pit, some 15kms wide and extending over 70kms from Moe in the west, eastwards to beyond Sale.

If you are worried about keeping mean global temperatures within safe limits, then pray that we don’t end up burning the global coal reserve.

If we did, and released the CO₂ to the atmosphere as we do today, then we would push atmospheric CO₂ levels to well above 550ppm, up from present level of 395ppm and pre-industrial levels of 290ppm.

That would give us an almost negligible chance of keeping global average temperatures below 2°C above pre-industrial, and would ultimately drive our climate to a state the world not seen for over 3 million years, since the Pliocene.

By looking back at that time we can get a glimpse of where our climate is headed. At that time there was a whole lot less ice on our planet. So much so in fact that sea levels stood more than 25 meters higher than today.

It is looking like it’s back to the future, both for coal and for the climate.