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Coal joins oil in new energy crisis

Germany has made a large push into clean, renewable energy, but it remains hooked on coal, its biggest source of energy. German utilities are seeking to build two dozen power plans to be fueled by lignite, crumbly brown coal near the surface.

CRAIG WHITLOCK | Washington Post

Germany has made a large push into clean, renewable energy, but it remains hooked on coal, its biggest source of energy. German utilities are seeking to build two dozen power plans to be fueled by lignite, crumbly brown coal near the surface.

Long considered an abundant, reliable and relatively cheap source of energy, coal is suddenly in short supply and high demand worldwide.

An untimely confluence of bad weather, flawed energy policies, low stockpiles and voracious growth in Asia's appetite has driven international spot prices of coal up by 50 percent or more in five months, surpassing the escalation in oil prices.

The signs of a coal crisis have been showing up from mine mouths to factory gates and living rooms: As many as 45 ships were stacked up in Australian ports waiting for coal deliveries slowed by rains. China and Vietnam, which have thrived by sending goods abroad, abruptly banned coal exports. Factory hours have been shortened in parts of China, and blackouts have rippled across South Africa and Indonesia's most populous island, Java.

Mining companies are enjoying a windfall. Freight cars in Appalachia are brimming with coal for export, and old coal mines in Japan have been reopened or expanded. European and Japanese coal buyers, worried about supplies, have begun locking in long-term contracts at high prices, and world steel and concrete prices have risen, fueling inflation.

In the United States, the boom in coal exports and prices has helped lower the trade deficit, which declined last year for the first time since 2001. The value of coal exports, which account for 2.5 percent of all U.S. exports, grew by 19 percent last year, to $4.1-billion, the National Mining Association said. To maintain its role as the world's producer of last resort, the United States would need to make major investments in mines, railways and ports.

Big swings in the prices of coal and other commodities are common. But while the price of coal has slipped slightly in recent weeks, many analysts and companies are wondering whether high prices are here to stay. As increasing numbers of the world's poor join the middle classes, hooking up to electricity grids and buying up more manufactured goods, demand for coal grows. World consumption of coal has grown 30 percent in the past six years, twice as much as any other energy source.

Expensive or not, coal is almost always dirtier to burn than are other fossil fuels. Climatologists warn that without technology to capture carbon dioxide emissions, burning more coal would be disastrous.

Recoverable

coal deposits

The United States has more known coal reserves than any other country: 268-billion tons. At current consumption levels, these deposits would last more than 200 years. With demand high, some U.S. mine operators are increasing production and improving transportation facilities, including ports.

Others (in billions of tons):

Russia: 173

China: 126

India: 102

Australia: 87

Europe: 66

South Africa: 54

Ukraine: 38

Kazakhstan: 34

South America: 22

Sources: Petroleum-Economist, www.Petroleum-economist.com; Energy Information Administration, Department of Energy;

www.BP.com

Coal mining and use

Estimated coal production and consumption

for 2006 (in millions of short tons):

CountryProductionConsumption
China*2,6212,578
United States1,1611,114
India497542
Australia**420156
Russia341264
South Afric269195
Germany223272
Indonesia***18644
Poland171155
Kazakhstan10679
Japan****0198
South Korea****398

* China produces more coal than any other country, but demand is so voracious that the country has limited its exports.

** Australia, the world's largest coal exporter, has had trouble fulfilling orders because floods have curtailed production.

*** Indonesia, among the top coal exporters, has announced plans to cap exports next year to meet a surging domestic demand for electricity.

**** Japan and South Korea are the largest coal importers.



Coal joins oil in new energy crisis 03/25/08 [Last modified: Thursday, October 28, 2010 9:47am]
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