I’ve written before about “peak coal” — warnings that we may not have as much mine-able coal left as the industry would have us believe (See previous posts here and here Also see this excellent commentary by Coal Tattoo reader and frequent commenter Tom Rodd).
And now, today’s Wall Street Journal includes an article (Subscription required) that highlights this problem:
While there is almost certainly as much coal in the ground as … [the] Energy Information Administration believes, relatively little of it can be profitably extracted. Last year, the U.S. Geological Survey completed an extensive analysis of Wyoming’s Gillette coal field, the nation’s largest and most productive, and determined that less than 6% of the coal in its biggest beds could be mined profitably, even at prices higher than today’s.
And just read this quote from Brenda Pierce, head of the USGS team that conducted that landmark study:
We really can’t say we’re the Saudi Arabia of coal anymore.
The article goes on to say:
No one says the U.S. is facing a coal shortage. But the emerging ranks of “peak coal” theorists argue that current production levels may be unsustainable and, if anything, create a false sense of security.
And:
In the field, challenges are becoming more apparent. Mining companies report they have to dig deeper and move more earth to extract coal from aging mines, driving up costs. Utilities have grown skittish about whether suppliers can ship promised coal on time. American Electric Power Co., the nation’s biggest coal buyer, says it has stepped up its due diligence to make sure its suppliers can make deliveries after some firms missed shipments last fall. It even bought a mine to lock down supplies.
“We are very much concerned, and it’s getting worse,” said Tim Light, senior vice president for AEP.
The story notes that some coal industry advocates aren’t buying the concerns, or think they’re greatly overblown:
Coal is down but hardly out. It remains the electric-power industry’s dominant fuel. Emerging “clean coal” technology could help improve coal’s environmental profile. And coal remains an energy ace in the hole, available to substitute for other fuels if shipments are disrupted.
Some in the coal industry believe concerns about future supplies are overblown. Coal advocates argue that improved technology could increase the amount of coal that can be extracted profitably. Coal “is certain to remain an enormously competitive energy resource by virtually any conceivable measure,” says Kim Link, spokeswoman for Arch Coal Inc., which produced about 12% of the nation’s coal last year.
The WSJ article reminded me of comments a few months back from Congressman Nick J. Rahall of West Virginia (who oddly enough recently dissed the idea of green jobs):
Rahall said the state’s most productive coal seams likely will be exhausted in 20 years. And while coal will remain an important part of the economy, the state should emphasize green job development. That, he said, is especially important as pressure against mountaintop mining increases.
Rahall said the pressure is coming from both Republicans and Democrats. During the 2008 presidential race, Republican nominee John McCain came out in favor of ending mountaintop mining.
“It’s something that’s evolving over time in our industry and the responsible segment of our industry realizes that,†he said.
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This is why I’ve always questioned the justifications for the massive Marmet Locks project.
The WSJ article is a joke — not enough available-coal — when coal mines are closing and reducing production; AEP worried about getting enough coal when it is not taking coal that it has already under contract.
There are 67 comments posted on that article:
http://online.wsj.com/article/SB124414770220386457.html#articleTabs%3Dcomments
(No subscription needed to read the comments.)
I also post a comment on that article:
http://online.wsj.com/community/08c74453-b902-4a16-b07c-b5df459a780b/activity
(I can promise you, from my having been with the USGS, the study results were what the industry wanted to hear.)
Good to see that people are interested in the coal reserves issue.
The USGS report on Wyoming coal reserves is a big, professional study, by highly trained people; and it deserves to be taken seriously.
This means, for people who are skeptical about the study’s findings and conclusions, to look in detail at its methods and data and reasoning, and to challenge specifically what they think is wrong.
Until and unless the USGS study is persuasively refuted, we ought to take its findings into serious consideration — as we face the future of coal with eyes wide open.
Yes, it is a professional study done by professionals — my remark is about how the study is conveyed/used, not about the study itself.
2009 Annual Energy Outlook, Coal Forecast
http://www.eia.doe.gov/oiaf/aeo/pdf/trend_5.pdf (2 pages)
May 12, 2009 (6/9/09, next update)
Short-Term Energy Outlook – Electricity
http://www.eia.doe.gov/steo#Electricity_Markets
(Excerpt) EIA’s preliminary estimates indicate that power generation by natural-gas-fired plants increased by nearly 3 percent in February 2009 from the same month last year while coal generation fell by about 14 percent. This change in the relative generation fuel mix may be a response to the converging generation costs for coal and natural gas.
Bob,
I’m not sure anyone has any idea what you’re getting at — you haven’t offered any specific criticisms of either the USGS study or the WSJ coverage of it.
Perhaps you could be more specific.
Ken.
Ken
As I stated before, there needs to be a study of studies — including why do the studies.
USGS — and most others — are great at doing studies that lead to more and more studies which provide results that are used for what? (More further below.
—
(Excerpted from my comment on WSJ)
American Electirc Power had owned and sold many coal mines — captive mines — and was a major wholesaler of electricity until recently when supply has exceeded demand for it. What’s good for AEP is only good for AEP — even in these times it is seeking huge rate increases from its residental customers. (See: http://www.mydailyregister.com/printer_friendly/2674577 )
Right now coal mines are closing and/or cutting back production because AEP and other utilities are using less coal.
—
Status Report: USGS Coal Assessment of the Powder River Basin, Wyoming
http://pubs.usgs.gov/of/2006/1072/ (2006)
Status Report: USGS Coal Assessment of the Powder River Basin, Wyoming
http://www.eia.doe.gov/oiaf/aeo/conf/pdf/luppens.pdf
(29 pages)
(Excerpts)
However, new, highly automated regional mine modeling and economic programs developed by the USGS facilitate the reserves evaluation.
The USGS assessment methodology was formally
evaluated by an external review panel with an open file
report published in February, 2005 Rohrbacher, T. J.,
and others, 2005 ( http://pubs.usgs.gov/of/2005/1076).
Builds on the digital geologic framework of past coal resource assessments.
Started next coal assessment phase in the greater Powder River Basin (PRB) in FY2005.
===
So, might the USGS studies be for justifying the mining coal of federal lands?
The mines in the Powder River Basin typically have less than 20 years of life remaining. Almost all of the coal in the Powder River Basin is federally owned and further mine expansions will require a series of federal and state approvals, as well as large investments in additional mine equipment to begin the excavations.
More:
http://en.wikipedia.org/wiki/Powder_River_Basin
http://www.blm.gov/wy/st/en/info/NEPA/cfodocs.html
[...] Blogs @ The Charleston Gazette – » Peak coal: WSJ warns of …Mining companies report they have to dig deeper and move more earth to extract coal from aging mines, driving up costs. Utilities have grown skittish about whether suppliers can ship promised coal on time. … Coal advocates argue that improved technology could increase the amount of coal that can be extracted profitably. Coal “is certain to remain an enormously competitive energy resource by virtually any conceivable measure,†says Kim Link, spokeswoman for Arch Coal … [...]
The article can now be seen online without a subscription:
http://online.wsj.com/article/SB124414770220386457.html
While there is almost certainly as much coal in the ground as Mr. Warholic’s Energy Information Administration believes, relatively little of it can be profitably extracted. Last year, the U.S. Geological Survey completed an extensive analysis of Wyoming’s Gillette coal field, the nation’s largest and most productive, and determined that less than 6% of the coal in its biggest beds could be mined profitably, even at prices higher than today’s.
“We really can’t say we’re the Saudi Arabia of coal anymore,” says Brenda Pierce, head of the USGS team that conducted the study.
No one says the U.S. is facing a coal shortage. But the emerging ranks of “peak coal” theorists argue that current production levels may be unsustainable and, if anything, create a false sense of security. David Rutledge, an electrical-engineering professor at the California Institute of Technology who has studied global coal production, figures the U.S. has about half as much recoverable reserves as the government says, which would work out to about 120 years’ worth.