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.
The big news a few weeks ago, as I wrote in this blog, came from the World Energy Outlook 2012 report, which wrote that the US is on a trajectory to surpass Saudi Arabia in oil production by 2020. The US Department of Energy yesterday completed its study on natural gas exports by an outside consultant. The report can be summarized was follows:
- Because of the abundance of natural gas in the U.S., only modest price increases will be seen by domestic consumers;
- Exports of natural gas are made possible primarily by the increased availability of it; and
- The expected shift in power generation from coal to natural gas will be slowed by increased exports.
The modest price increases predicted from allowing greater exports of US natural gas are directly related to its increased availability from unconventional sources such as shale. The World Energy Outlook had forecasted that most of the newly available natural gas would come from three countries: China, Australia, and the United States. It forecasted that by 2035 natural gas would become the most important fuel in the US, surpassing even oil.
My previous blog entry, “Liquid Natural Gas and US Energy Exports,” pointed out the potential economic impact of allowing increased exports of natural gas in terms of job creation here in the US. However, the extent of that growth hinges on federal regulatory approvals. The long-awaited Department of Energy study paves the way for those approvals. Already, the World Energy Outlook 2012 has forecast that, even with exports, 93% of natural gas produced in the US would be kept here at home for domestic consumption.
Why would 93% remain available for domestic consumption if federal regulations permitted increased exports of natural gas? There are many reasons, but among them is the growing availability of natural gas outside the US. The Outlook 2012 report forecasts that, even with potential new climate-related policy restrictions, the production of natural gas in non-OECD countries could grow at a 2.1% compound average annual rate between 2010 and 2035. This compares with 0.85% over the same period in OECD countries like the US.
The primary reasons for increased domestic consumption are the extent to which the power industry is shifting its fuel source from coal to natural gas, and the expansion in availability of domestic natural gas. The Outlook 2012 report estimates that output in North America would continue to expand from approximately 650 billion cubic meters (bcm) in 2011 to 800 bcm in 2035, nearly a 25% increase in availability of domestic natural gas.
We are now beginning to see the potential that is coming from the growth in the worldwide natural gas supply. It will result in shifts away from traditional fossil fuels to cleaner natural gas and substantial increases in jobs within the energy industry. Of course, both will depend upon supportive regulation. The Department of Energy report should move us toward that supportive regulation.
The complex nature of our energy future was evident in a recent announcement by the National Energy Technology Laboratory (NETL). NETL announced $4.4 million in new research funding for Solid Oxide Fuel Cell Research. The two primary areas of research are electrochemical performance enhancement and improvements to the durability of cathode materials. Said the NETL in its announcement of this research:
The SOFCs (solid oxide fuel cells) under development within SECA (Solid State Energy Conversion Alliance) are ideal for use in central generation applications, enabling efficient and economical systems for up to 99 percent carbon capture. They also emit practically no pollutants (nitrogen oxides and sulfur oxides) while consuming approximately one-third less water than other advanced power generation technologies. Power plants based on SECA fuel cells and coal gasifiers—units that turn solid coal into gaseous fuel—will generate power with overall efficiencies greater than 50 percent, compared to approximately 25 percent for traditional coal-fired power plants, including CO2 capture processes.
Renewables like wind and solar offer the advantage of a low carbon footprint when compared with traditional fossil fuels. Among their disadvantages are relatively high costs when compared with traditional fossil sources of energy like oil and their intermittent availability. That is why I have previously written about the importance of improved energy storage research (see Energy Storage: Advances in Research) if renewables are to gain much ground in our complex mix of energy sources.
Moreover, oil and coal remain readily available for the foreseeable future. Our reliance on another fossil fuel, natural gas, is increasing rapidly with its widespread availability. Its increased use is made possible through American technology that is making fracking safe and reliable. With a lower carbon footprint and declining prices, natural gas is also increasingly becoming the fuel of choice for the generation of electricity used by those new electric vehicles. But research like that supported by NETL could make coal a more acceptable source of energy as well.
The role of research is significant in not only how it advances our technology but in what it conveys about the complex energy map that we confront on the 21st century. Having relied primarily in the 20th century on oil, coal and more traditional and ancient sources of energy, the 21st century is likely to appear very different at its close. It will not, however, be a century of dramatic change. Fossil fuels are just too inexpensive still and too widely available for that to change. Moreover, developing countries are aggressively increasing their use of these valuable sources of energy.
While this century is already shaping up to be different from the last in our increased use of renewable energy sources, the mix of their use along with fossil fuels in the latter years of this century will fundamentally depend on the extent to which technology makes renewables cheaper, energy storage more reliable, and fossil fuels cleaner. Research has already made natural gas the choice for a cleaner fuel from which to generate electricity. It is likely as well to alter whether coal can be used without some of the atmospheric carbon and health-related aerosol issues that have been raised about it. Much of our complex energy usage depends on our commitment to continued funding of sound research – by government and business.