DeepResource

Observing the world of renewable energy and sustainable living

Blackout

Review of Richard Heinber’s “Blackout: Coal, Climate and the Last Energy Crisis”.

[amazon.com]


In 2009 Richard Heinberg got his book published titled: “Blackout: Coal, Climate and the Last Energy Crisis”. It deals with the amount of coal the world still has at its disposal to fuel industrial society. Many people think there is enough for at least decades, if not centuries. Heinberg ventured to find out if this it true. The structure of the book is simple: the first five chapters deal with the amount of minable coal still present in all major geographical areas. Chapter six deals with the relationship between coal and climate (change), chapter seven with new technologies applied to burning coal and the eight and final chapter discusses three possible scenarios for the future.

Heinberg points at the numerous blackouts occuring around the world, due to shortage of coal to fuel power plants and mentions China and even Britain. And in 2012 hundreds of millions of people in India were cut off from electricity due to overload of the network. Currently 40% of the world’s electricity generation comes from coal, more than from any other source of power. Between mid-2006 and mid-2008 the prices for coal doubled, hinting that coal is not as abundant as many think it is. Nevertheless coal usage grows faster than any other source of fossil fuel, which was not anticipated. And where the production of oil seems to have peaked somewhere between 2006-2010, the application of coal suddenly is attractive again, certainly with the advance in technologies that enable to turn coal into synthetic liquid fuel. Currently China is coal consumer number one, with 70% of the total energy bill coming from coal and uses almost twice the amount the number two in the global coal consumption ranking, namely the US. In 2007 alone, China added electricity generating capacity equal to the total capacity of France and Britain combined.

Of all fossil fuels, coal is the dirtiest, due to sulphur, mercury as well as radioactive elements released in the atmosphere. But its impact is most severe in its contribution to the greenhouse effect and climate change. Coal is responsible for 40% of greenhouse gas emissions.

How much is there left? According the World Coal Institute in 2005: “it has been estimated that there are over 984 billion tonnes of proven coals reserves worldwide… This means that there is enough coal to last us over 190 years.” The US Department of Energy says that the country has a 200-year supply. These figures are usually based on reserves-to-production-ration (R/P), a concept of which Heinberg critical. Far more telling is the experience that extraction of a resource, in general, follows a Bell-curve shape with a certain peak in time. For economic planning it is more useful to know the point in time when it will be no longer possible to increase production anymore.

The variability of the quality of coal is greater than for other fossil fuels like oil and gas and ranges from anthracite at the high end to lignite and subbitumous coal at the low end, differing up to a factor of five in caloric value per ton. Transport cost can be high, as much as 70% of the end price. Coal can be mined from the surface (40% worldwide) or at depths up to 1500 meter (Britain). Coal is found in seams (layers) with thickness ranging from a few inches to 100 feet. 85% of surface coal can be recovered and 50% for underground mining.

So how much is there left in reality? Strangely data collection is not done by huge bodies like the IEA. Surprisingly, the task is actually carried out by a two-person team – Alan Clarke and Judy Trinnaman, whose company, Energy Data Associates, is headquartered in Dorset, England. Clarke and Trinnaman send a questionnaire every three years to every coal-producing nation in the world. According to Clarke, about two-thirds of nations reply, but only about 50 of these replies typically are useful. Some reported data must simply be disregarded as unrealistic. No effort is made to verify reported national reserves figures through independent geological surveys. The figures from Energy Data Associates are then taken up in the triennial report of the World Energy Council, and are subsequently republished by the IEA, US Geological Survey, BP, etc. Clarke and Trinnaman no doubt do an excellent service with the information available to them, but given the nature of this data the results can hardly be regarded with a high level of confidence. This means that the data produces can only be a very rough estimate.

In order to find out the status of the coal reserves Heinberg selected five studies:

1. “Coal: Resources and Future Production” (Energy Watch Group, Werner Zittel and Jorg Schindler 2007). Conclusion: world production will reach a maximum level around 2025, decline slowly for about two decades, and then fall off more rapidly beginning around 2050.

2. “A Supply-Driven Forecast for the Future Global Coal Production” (Hook, Zittel, Schindler, Alehlett; Uppsala Hydrocarbon Depletion Study Group, 2008). Conclusion: Global coal production will be able to increase over the next 10 to 15 years by about 30%, mainly driven by China, India, Australia and South Africa. A plateau will be reached around 2020 and the global production will go into decline after 2050.

3. “The Future of Coal” This study, by B. Kavalov and S.D. Peteves of the Institute for Energy (IFE, 2007), produced for the European Commission, no prediction for peak production. Three conclusions:
• “World proven reserves … of coal are decreasing fast ….”
• “The bulk of coal production and exports is getting concentrated within a few countries and market players, which creates the risk of market imperfections.”
• “Coal production costs are steadily rising all over the world
• “It is true that historically coal has been cheaper than oil and gas on an energy content basis. This may change, however.

4. Hubbert linearization and curve-fitting (studies by David Rutledge, 14 Jean Laherrere,1s et al.). Conclusion: coal production peak before 2050:

5. “Lignite and Hard Coal: Energy Suppliers for World Needs until the Year 2100 – An Outlook.” Authors Thomas Thielemann, Sandro Schmidt, and J. Peter Gerling of The German Federal Institute for Geosciences and Natural Resources (BGR). Conclusion: no foreseeable bottleneck in coal supplies and a large potential for coal-to-liquids (CTL)… “Up to the year 2 100, and from a geoscientific point of view, there will be no bottleneck in coal supplies on this planet.” The national coal reserves data used in this report are the same set used by the Energy Watch Group.

It is pointed out that optimistic forecasts of future supply – for the BGR report – rely on the potential of new technology to turn resources (coal in the ground) into reserves (coal that can be economically extracted). BGR believes that a lot of coal can be extracted by application of new technologies.

Next Heinberg determines the reserves per geographical area.

US

The US has the largest coal reserves in the world, concentrated in Appalachia, Illinois, Wyoming, and Montana. 60% is mined from the surface. Production history: the US produces more than a billion ton per year. The Energy Information Administration (EIA) believes the total recoverable reserve of the US is 267 billion ton.

China

China is the world’s largest producer of coal, with 25,000 mines and 3.4 million employee’s.

The EWG study predicts:

Reserve’s in billion ton:
EWG: 96
Chinese gov.: 187

Conclusion: China’s domestic coal production growth will end by ca. 2020; in the worst case scenarion (EWG), shortages will emerge within ten years. Between 2006-2007 imports increased with 120%, which illustrates the point. The current path of rapid economic growth will prove to be unsustainable.

Russia

Russia will have coal as its primary source of energy for decades to come, but it will depend to a large part on the development of Siberian, where the quality of coal is not very high. A main hindrance is the bad state of the rail infrastructure, necessary for transport over very long distances. A workaround would be the transformation of coal in electricity locally.

India

India relies for 53% of its energy needs on coal and ranks third as a hard coal producer. More than 75% produced by surface mining. Like in Russia the transportation facilities are a bottleneck. Estimated hard coal reserves: 90 billion ton.

Australia

Australia is the world’s leading coal exporter (233 million ton in 2006 and went for 80% to Asia). Coal is of high quality, suitable for surface mining. Australia will be self-sufficient in coal for decades.

South-Africa

80% of exports goes to Europe and it is the world’s leader in the use of coal-to-liquids (CTL) technology. 60% comes from underground mining. Production 2006: 244 million ton, 30% of which is exported. The Sasol Corporation produces 150,000 barrels of coal based synthetic diesel per day in Secunda. Currently SA is in a energy crisis as Eskom, the national energy company is not able to keep up with demand.

Europe

Europe is a minor coal producer as most of its reserves have been mined in the past. Britain for instance had more coal in energy terms than Saudi-Arabia had/has with its oil. Germany is still the world’s largest producer of low-quality lignite. European production of coal:

Import from other countries often is cheaper than mining in Europe. Coal consumption peaked in 1965. The most likely source for increased coal imports is South-America.

We’ll skip the smaller coal producers like South-America, Indonesia, Canada as well as the chapter about climate change. In chapter seven Heinber discusses new technologies for exploitation of coal, none of which can be seen as the holy grail for the world’s energy problems:

• CTL – coal-to-liquids. Originates from the beginning of the 20th century and was used by Germany during WW2 (125,000 bpd). The South-African company Sasol now is the largest producer with 150,00 bpd. Production cost $67-$82/barrel, which is interesting, however CTL plants are expensive to construct. The aviation industry is a likely consumer for CTL-products. China is interested in applying this technology.
• UCG – Underground Coal Gasification. UCG offers an alternative to conventional coal mining for some resources that are otherwise not commercially viable to extract. Currently there is only one site in Uzbekistan in operation. The potential for significantly increasing global reserves is minimal.
• IGCC – Integrated Gasification Combined Cycle. Gasification is accomplished in – of all things – a gasifier, into which coal, water, and air are fed. Heat and pressure reduce the coal to “synthesis gas” or “syngas” – a mixture of carbon monoxide and hydrogen, along with solid waste byproducts consisting of ash and slag, which can be used in making concrete or roadbeds.
• CCS – Carbon Capture and Storage. Storage either under ground or under the ocean. Estimated price increase for electricity with CCS: 78%.

Heinberg concludes his book by describing three possible scenario’s after summarizing conclusions from previous chapters first:

– Peak coal before mid century, possibly even at 2025.
– Destabilization of China because of its reliance on limited coal reserves.
– The US has likely much less coal than it thinks.
– Coal is the fastest rising energy resource in volume.
– Transportation of coal is a bottleneck in most countries.
– The increased application of coal will have negative consequees for the climate, but the worst scenarios will not be realized because of limited coal supplies.
– New coal technologies will not deliver the holy grail of our energy predicament.

Scenario’s

1. Maximum Burn Rate – Unrestricted spending of energy resources like there is no tomorrow.
2. Clean Solution – application of CO2 sequestration (CCS).
3. Post Carbon Transition – abandon fossil fuels before they abandon us.

The consequences of each scenario are perceived to be as follows:

1. 2010-2020: increased prices for coal due to peak oil 2010. Rising demand for coal due to increased demand for CTL to replace receding oil supply. Internationalization of the coal market. High transport costs lead to repatriation of production processes. Globalization reversed. Peak Coal production in China, leading to severe grid outages. Situation in India will be even worse. Africa and Central-America will suffer most of all, even with societal collapse as a possibility. For the US much higher energy cost resulting in drastic decline of material standard of living. 2020-2030: production of coal in the US begins to slide as in the rest of the world; quality of coal is decreasing. All new automobiles are electric. Aviation runs on CTL and maybe biofuels but its scale has been reduced dramatically. Severe grid outages now in the US and Europe as well, having devastating consequences for the rest of the economy as computer systems begin to fail. US and Europa still better of than the rest. 2030-2040: hardly any trade in energy resources as everything is consumed locally. The lack of energy prevents the setting up of alternative energy sources. Infrastructure crumbling. Grid failure becomes the norm and electricity is rationed. IN many nations social order breaks down.

2. This scenario has much in common with the first, except for the efforts undertaken to soften the climate change by halting carbon emissions into the atmosphere. Because of this the price of electricity will increase much faster. 2010-2020: CCS not yet broadly deployed but restriction in coal burning postpones peak coal with a decade. Shortages in electricity and blackouts are the result. 2020-2030: CCS is now brought into place. Coal production picks up again. Because of CCS net energy is lower. 2030-2040: coal shortages begin to appear. Due to CCS the net energy is very low. It is too late for investment in alternatives.

3. The strategy is to get rid of fossil fuels as quicly as possible and to switch to alternatives proactively, which requires adjusting to a lower net-energy regime. Model is the steady-state economic theory by Herman Daly.

Distributed power generation will become the norm. Rationing of electricity in early stage, likewise that of steel. Production of cement is discouraged. Existing building are retrofitted for maximum energy efficiency. Abandoning of mainting most of the roads. Priority to trail traport. Rationing of oil and gas as well. Expansion of renewables to a factor 25 times the current level. 10% of the GDP is invested in the energy transition for 30 years. Europe and Japan are best prepared for such an energy transition, China and India far less so, with the US in between. 2010-2020: economic shocks, global economic depression. What is needed is a new philosophy about society, and a cooperation between government level and grassroots organisations. Keyword will be relocalization. The money needed for transition will come at the expense of household budgets, military, taxes on fossil fuels. Policies to control population size must be in place as well as international agreements about resource sharing to avoid conflict. Heinberg takes the mobilization of US society during WW2 as an example of what needs to be done. 2020-2030: main phase of the transition. Actual building of new energy base and retrofitting of homes and redesigning of cities. Worldwide shift from cities to rural areas. Farming as a new career opportunity. 2030-2040: stabilization of the net energy per capita level. Decline of world population towards target of 2 billion. Nations that started transition first are best off. Reduced international trade.

Obviously the third scenario would be the best in the long run. But it is also the most difficult to achieve as it demands foresight and willingness to suffer pain now to avoid a bigger pain in the future. It is easy to imagine that the US will choose scenario 1, where Germany and Japan are better positioned to adopt scenario 3. It is likely that countries opting for scenario 1 will need external shocks to change course, shocks like limited wars resulting in being temporarily cut-off from fossil fuel supplies. The road forward is one of adopting a no-growth economic paradigm and are relying on resources that are continually replenished, so in the end we may never again have to worry about energy supplies again.

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