Coal Supplies

Coal Supply Constraints Report 2009: Planning for the Future

Summary:

Coal-fired power plants provide approximately 50% of the electricity in the United States. It has often been stated that coal is “cheap and abundant” and it is assumed that it will stay that way for at least the next century. A careful analysis of existing information on coal supplies suggests that United States coal supplies are much more constrained than is widely understood. Indeed, it appears that with existing mines playing out over the next 10-20 years and future mine expansions highly uncertain, the planning horizon for building alternative power production infrastructure is likely to be much shorter than previously thought. Download the report

A careful review of existing information on U.S. coal supplies demonstrates that:

1) The U.S. Energy Information Administration has repeatedly published data on coal “reserves” as though they include an assessment of economic recoverability when in actuality they did not. As a result, the often touted “200 year supply of U.S. coal” is not based on a realistic assessment of how much coal will actually be accessible.

2) The United States Geological Survey has developed a tool for assessing economic recoverability and published a series of reports showing that the amount of economically recoverable coal is a small fraction (e.g. less than 20%) of the original resource. The most recent USGS assessment of coal in the Gillette coal field of the Powder River Basin of Wyoming, the source of about 40% of U.S. coal, found that only 6% of the coal was economically accessible under the economic conditions at the time. Between 2002 and 2008, while coal costs were rising dramatically, the USGS reduced the amount of economically accessible coal in the Gillette coal field of the Powder River Basin from 23 billion tons to 10 billion tons.

It appears that rather than having a “200 year supply of coal,” the United States has a much shorter planning horizon for moving beyond coal-fired power plants. Depending on the resolution of geologic, economic, legal and transportation constraints facing future coal mine expansion, the planning horizon for moving beyond coal could be as short as 20-30 years.

Key References:

1. DOE Energy Information Administration data - by its own explanation - doesn’t include assessment of economic recoverability.

2. USGS Report 2008-1202 concludesg that only 6% of the coal in the Gillette coal field of the Powder River Basin will be economically accessible.

3. The United States produces about 1.1 billion tons of coal a year