Coal Supply Constraints

U.S. National Archives, Barnesville, Ohio

Definition

  • Economic, Geologic, and Environmental Costs are proving the much-touted “200 years of available coal” highly implausible
  • The planning horizon for moving beyond coal could be as short as 20-30 years

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 new coal-powered generation is likely to be much shorter than previously thought.

Taken from: CEA’s Report, “Coal:  Cheap and Abundant, Or is it?

Why it’s Important

It appears that rather than having a “200 year supply of coal,” the United States has a much shorter planning horizon for moving beyond coalfired 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.

Considering that approximately 45% of the electricity in the United States comes from coal, a better understanding of coal supply constraints is critical so that a transition to clean energy can be expedited to help buffer communities from spiking coal prices and lack of supply.

Taken from: CEA’s Report, “Coal:  Cheap and Abundant, Or is it?

With China powering its grid up to 80% with coal and being now an importer of coal from markets like the United States, its purchasing affects world prices for coal.  The China Electricity Council (CEC) has said coal fired power plants operated by the country’s five major power generation groups lost close to $2 billion in the first five months of 2011, mostly due to escalating coal prices.

Taken from Power Engineering.

Background

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.

The major mines in the Powder River Basin of Wyoming (e.g. the “Fort Knox” of U.S. coal) have less than a 20 year life span, and coal mines in other parts of the United States are also likely to be playing out in the next 20 years. Future coal mine expansions are highly uncertain as these expansions will face very serious geologic, economic, legal and transportation constraints. Importantly, the federal government owns essentially all of the coal in the western UnitedStates, and future coal mine expansions in western states will have to comply with a host of federal laws.

Taken from: CEA’s Report, “Coal:  Cheap and Abundant, Or is it?

Take Action

Let investors, regulators, colleagues, neighbors and friends know about the reality of diminishing coal supply returns. Download Clean Energy Action’s coal supply constraints study: CEA’s Report, “Coal:  Cheap and Abundant, Or is it?

Learn More

A 2010 New York Times article covering “peak coal” findings from scientific researchers:  Study:  World’s Peak Coal has Arrived

A 2010 National Geographic article on coal constraints: Mining the Truth on Coal Supplies

David Rutledge, a Professor of Electrical Engineering at Caltech, presents findings on coal supplies and climate change:  Hubbert’s Peak, The Coal Question and Climate Change

Related Pages

Source Watch.org:  Coal Reserves

The Oil Drum

Post Carbon Institute

Accelerating the transition from fossil fuels to a clean energy economy