World Energy Outlook 2012 – Part III: Coal

What is likely to be missed from news about the World Energy Outlook 2012 report is the role of coal in the future global energy mix.  With recent attention on natural gas (See Penley on Energy and Education) and the focus of most news reports on the US surpassing Saudi Arabia in oil production by 2020, the anticipated role of coal was lost.  Yet, the report forecasts that, even with new, restrictive policies, global demand for coal will actually grow by 1 percent compound average annual rate.  Coal demand is expected to more than doubles by 2035 in India.

It is clear that coal will play a very large role in our future energy mix.  In the last decade, it was coal that met 45 percent of the energy demand, per the Outlook 2012.  Without policy changes associated with greenhouse gas emissions, the forecast is for coal to still grow at a 1.9 percent rate.  At that pace, coal would surpass oil as the leading fuel by 2025.  But even so, its proportion of the total energy mix would decline from the last decade’s 45 percent to 30 percent by 2035.  Renewables and natural gas will play a much larger role.

The role of coal in our energy future depends upon a variety of factors, but leading among those are government policy and technology development.  Of particular import to coal producers is the potential role that government can play in establishing policies that encourage replacement of coal by cleaner fuels, ranging from a variety of renewables to natural gas.  The power sector would be most affected by these policies, and they would change the role of coal where policies are implemented.

Of course, there are alternative scenarios that leave coal as a much bigger player in the future.  Among them is the development of new technology for coal gasification or carbon capture and sequestration.  Both are receiving the attention of researchers in academia and industry, and both have the potential to substantially reduce emissions from coal.  The challenge remains of sufficient investment in the research needed to produce viable, large scale, financially successful technology (see a review of the area in Underground coal gasification: From fundamentals to applications in the Progress in Energy and Combustion Science journal).

In the immediate future without substantial change to policies coal use will continue to grow at a rapid rate.  In 2011, coal demand grew by 5.6 percent, a growth rate that was similar to 2010 and far more rapid than 2009 when it was flat.  With increased demand for electrical power in developing countries, the very rapid 55% increase in coal demand over the last decade is understandable.  In 2010 65 percent of global coal demand was consumed in power generation.  Even with the advent of new policy restrictions, the 2012 report projects growth in coal demand in non-OECD countries at a compound average annual growth rate of 1.4 percent between 2010 and 2035.  That would mean that the global growth rate is still almost 1 percent despite a decline that is greater than 1 percent in OECD countries.

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