Peak Coal: my feelings of F.U.D.

I have always had feelings of Fear, Uncertainty and Doubt, (FUD) about the New Zealand Energy Strategy‘s rosy response to peak oil, forecasting a future rich in fossil fuels:

Higher prices and other technologies will also prompt the extraction of liquid fossil fuels from sources such as gas, oil-rich shales and lignite. There are immense quantities of these non-conventional sources of oil, although extracting and using them will produce significant greenhouse gas emissions unless CCS is available. So, while there will, at some point, be peak ‘cheap’ oil from conventional sources, the world has plentiful sources of fossil-based oil.

Last month, the US Department of Energy backed out on it’s 10 year guarantee to help develop the world’s first commercial scale CCS equipped coal fired power station. Norway backed out of a similar project for the same reasons. Given Bush’s entire long term energy strategy (and ours apparently) rests on the success of CCS, this is not a good sign. Then I bumped into and article in last month’s New Scientist, entitled “The Great Coal Hole“, written by David Strahan. New research is beginning to explain why the world’s coal reserves have been downgraded by over 50% in the last 25 years.

The article is well worth the read. I’ve read the New Scientist version, not the one I’ve linked to on David’s site. It basically says that by using the technique of Hubbert linearisation, it can be shown that as well as this formal decline in reserve levels, global reserves are likely to be downgraded significantly further. This is also supported anecdotally by the fact that China still reports the same reserves as 40 years ago, despite also reporting producing and burning 20% of it. Although the price of coal has quintupled since 2002, reserves have still fallen. Production has remained relatively flat in spite of the price rises, implying that the industry has already produced most of the easily mined coal.

A quick search of The Oil Drum lead me to this article from last year, quoting several studies that forecast Peak Coal in 2025. The article quotes an Energy Watch Group report with some interesting facts.

Six countries (USA, Russia, India, China, Australia, South Africa) hold about 85% [5] of world coal reserves, when this is measured in terms of energy content. According to the latest assessment by the WEC, total world reserves at the end of 2002 stood at 479bn tons of anthracite and bituminous coal, 272bn tons of sub-bituminous coal and 158bn tons of lignite.

According to the Energy Watch Group, global coal production can increase for 10-15 years (mainly driven by China), but then production of anthracite and bituminous coal will peak around 2020 at a production rate around 30% higher than at present. Lignite production is predicted to peak somewhere between 2050 and 2060. However, as the quality of coal produced will be declining continuously the world coal energy peak is projected to come around 2025. It is also important to note that ‘peak coal exports’ should come even earlier, as lower-energy-density coals are not worth transporting long distances.

Commentary is available from Heinberg’s March 2007 MuseLetter.

My point from all this is that the future of coal as the world’s backstop energy saviour is far from certain. If Peak Coal could come as soon as 2025, then what is the point of pursuing CCS? Why are the Americans and Europeans changing their strategies regarding CCS?

The NZ Energy Strategy tells us that cost effective CCS is still a decade or two away. By then it would be pointless to invest in it, as coal prices spiral and production goes into steep decline. If you have read any of the links I have provided, you can see why I have a growing sense of Fear, Uncertainty and Doubt about New Zealand’s energy security in the medium to long term. It would seem that the government’s ability to forecast future energy security is about as accurate as its ability to forecast future oil prices. In a word: dismal.

13 Comments Posted

  1. More reasons for FUD over the Energy Strategy:

    In Section 4.6.1, the ES says that “There is likely to be enough geothermal, wind and hydro energy to meet New Zealand’s electricity demands for the next 20 years or so…” without giving any figures of what that demand is likely to be, or what the estimates are for the amounts of geothermal, hydro or wind power. Section 4.6.2 suggests electric vehicles will be needed. There is no hint that the electricity generation requirements of these electric vehicles have been taken into account when the estimates of Section 4.6.1 were made, nor any hint of urgency in ensuring that there will be sufficient generation for these vehicles.

    Given the wind resources in New Zealand, I have no worries that the energy won’t be available, but I do worry that the wind-powered generators won’t be installed, and I am also concerned about the lack of backup for these generators. In particular, I believe we may need to look at more electricity storage schemes, such as pumped hydro storage and vanadium flow batteries. (The latter could be located north of the Auckland distribution bottleneck, thus easing that problem as well.)


  2. I too have feelings of FUD over the so-called Energy Strategy. To me, it isn’t really a strategy at all. Instead, it is a collection of tactics, which in some cases are contradictory.

    Section 4.3.3 “energy diversity” on pages 18-19 encourages the use of gas rather than coal for electricity generation and direct use industrial and commercial applications (because of the lower emissions). Then it goes on to say that our coal reserves could be used for manufacturing substitute liquid fuels for transport (and for fertiliser manufacture). There is no mention that natural gas (CNG) is already being used as a transport fuel and for fertiliser manufacture. If we followed both of these tactics, we would end up with more conversions and therefore more losses and more CO2 emissions – and less useful energy. Instead it makes more sense to use coal for fixed installations where it can be used and reserve the gas for the fertiliser manufacture and transport applications. Then invest in using biomass in place of coal, e.g. via charcoal and more development of cogeneration where industrial or commercial heat is required.


  3. uk_kiwi said:
    “Is nuclear all that bad in comparison? Keep in mind that these are the only proven baseload generators (except for hydro) available today.”

    Not true. Geothermal power generation has been operating for abot the same time as nuclear – about half a century – and is therefore proven. I admit there aren’t that many places which can use geothermal, but New Zealand has a significant untapped geothermal resource.

    Biomass – particularly when used in cogeneration plants – is also proven. While there isn’t a huge global biomass resource, it is renewable and New Zealand has a significant underutilised biomass resource.

    Storage systems are also proven technology, and new storage systems are coming into play. These include pumped hydro, vanadium flow batteries and flywheel energy storage (FES). These are good for peak levelling. Tidal flow generation isn’t yet proven, but coupled with storage systems will be reliable baseload generation, and can also be used with demand management systems, i.e. mainly commercial users that can choose when to use power.

    Solar panels are proven. While New Zealand is the land of the long white cloud, many other countries have areas where the sunshine is more reliable. Coupled with long term storage, this is a reliable energy source. Solar thermal systems have built-in storage and have high availability.

    There are alternatives to nuclear if you look for them. New Zealand has more than its share. We should develop them.


  4. All of the co2 emitted from coal fired power stations can be sequestered by using co2 instead of water as the heat transfer medium in hot rock geothermal power stations. Using this technique with existing power stations would make additional coal plants unnecessary.

  5. Nuclear waste is a vanishingly small quantity of material which can be buried deep underground. Any hot isotopes decay fast, and after a few hundred years the ionizing radiation levels are not too high. The waste probem is a political problem rather than a technical problem, thanks to misguided green efforts.

    Compare this with the other option, coal, which leaves a legacy of millions of tonnes of fly ash, and millions of tonnes of air-bourne pollutants… These stay toxic forever, especially the mercury and other heavy metals released in the thousands of tonnes.

    Is nuclear all that bad in comparison? Keep in mind that these are the only proven baseload generators (except for hydro) available today.

  6. the only real market signal that matters – nuclear power is not insurable. That’s why it requires legislation from governments to indemnify the industry. It is simply so statistically unsafe as to not qualify for liability insurance.

    That is not true. It is not that it is so statistically unsafe . It isn’t. It is because if there is an accident the consequences would spread far and wide and effect all of the premium payers. Insurance companies do not insure that sort of risk.

    But. Would we be so selfish as to leave hundreds of future generations with waste and industrial sites that are (a) deadly poison and (b) not obviously so.

    What sort of danger sign can you build that will last 10,000 years?

    Homo Economist does not care about that sort of risk. The present value of the whole earth in 10,000 years, at any discount rate you might use, is vanishingly small.

    The nuclear waste and sites are a horrifying legacy. A monument to colossal greed.


  7. Great note, thanks. The challenge of CCS is real and horrible. Ive seen a thermodynamic analysis that says it will take about 50% of the energy of a powerplant to capture the carbon its just gone to all the trouble to release. So any CCS powerplant will as a minimum have to be over-rated by 50% even to get the carbon into a barrel so we can then figure out where to put it. Likewise the volume of CO2 involved – even in liquid form – will be about 2.5 times the volume of oil involved, so the transport infrastructure to take that ‘away’ will have to be 2.5 times that involved in getting the oil to the plant anyway. Horrible.

    Another great source of info on Peak Oil is at

    This paints a truly worrisome picture. In addition the ability of the Earth to accommodate our excesses is diminishing – giving a double whammy to increasing coal and oil use:

    Unexpected Growth In Atmospheric Carbon Dioxide

    ScienceDaily (Oct. 23, 2007) — A team of scientists has found that atmospheric carbon dioxide (CO2) growth has increased 35 percent faster than expected since 2000.

    The study also states that global CO2 emissions were up to 9.9 billion tons of carbon in 2006, 35 percent above emissions in 1990…

    “What we are seeing is a decrease in the planet’s ability to absorb carbon emissions due to human activity,? Dr Canadell says.
    “Fifty years ago, for every tonne of CO2 emitted, 600kg were removed by land and ocean sinks. However, in 2006, only 550kg were removed per tonne and that amount is falling.?
    The decline in global sink efficiency suggests that stabilisation of atmospheric CO2 is even more difficult to achieve than previously thought. We found that nearly half of the decline in the efficiency of the ocean CO2 sink is due to the intensification of the winds in the Southern Ocean.”
    The Southern Ocean winds have increased in response to greenhouse gases and ozone depletion. The increase in winds has led to a release of natural CO2 stored in the deep ocean, which is preventing further absorption of the greenhouse gas.

    So we need to start building our life boat as fast as we can.

  8. uk_kiwi – I disagree that CCS is pure propaganda. It’s a bit pie in the sky at the moment, expensive and requires years more research and development, but it is possible in my opinion. As for nuclear, it’s fuel source suffers from many of the same problems as coal. Prices have quadrupled in the last few years, Australia is the world’s primary supplier and it too has a peak uranium situation on the horizon. I’m just doing a bit of homework in that direction. Oh – and let’s not forget the only real market signal that matters – nuclear power is not insurable. That’s why it requires legislation from governments to indemnify the industry. It is simply so statistically unsafe as to not qualify for liability insurance. Forget the scientists and the environmentalists – ask the actuaries about nuclear power! They say forget it.

  9. Carbon capture and storage is a propaganda invention of the coal industry- it effectively means you need to burn twice as much coal to get the same energy output due to efficiency losses, and billions of tons of CO2 per year will realistically be *rather* hard to store. Why not skip the combustion, and just leave the carbon underground, where it is pre-sequestered?

    It is looking more and more that Nuclear power is the only long-term viable option to sustain modern civilisation.

  10. Without reading these documents, is the production peak driven by demand or capability. If the former, it’s not an issue as it means other energy sources are being pursued. If the latter, I’d refer you to all the premature peak oil forecasts if you want an example of inaccuracy in forecasts.

  11. But to be fair, they are about as (in)competent as just about every other government and/or opposition on the planet. The mere possibility of a real energy shortage is just too hard a problem to think about, takes too long to do anything about, so it stays in the “too hard” pile.

    It’s also demonstrably bad for a party’s longevity; for an example of what happens when you try, see Carter, James, ex-president of the USA.

    The truth of the matter is that we are somewhere on the extinction curve for every non-renewable energy resource, the only debate is where on the curve on any particular source we lie. Time will tell, of that there is no doubt…

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