Here comes Peak Coal
And you thought we had abundant, nay, inexhaustible supplies of coal? Think again, says Britain's Guardian:
…a clutch of recent reports suggest that coal reserves may be hugely
inflated – a possibility that has profound implications for global
energy supply and climate change.A report published last year by the EU Institute of Energy pointed out
that as demand for coal has soared since the turn of the century – with
China famously opening one coal-fired power station per week – the
world's reserves have fallen fast. The authors calculated that the R/P
ratio had dropped by almost a third, from 277 years in 2000 to just 155
in 2005.
And that's despite rising coal prices. Sound familiar? Oh, the 2006 figure is down to 144 years.
And what about the reserve figures themselves? Curiously, we have a different situation here than we do with oil. With oil, there are two problems: 1) an utter lack of transparency on the part of major producers, especially Saudi Arabia, and 2) the fact that estimated reserves shot up in the 1980s as OPEC began basing its production quotas on… estimated reserves. Whereas with coal…
Energy Watch found that many countries' reserves figures had
remained suspiciously unchanged for decades – China's since 1992,
despite having mined 20% in the intervening years. But in those
countries that had revised their figures, the changes were
overwhelmingly negative. For instance Britain, Germany and Botswana had
cut their reserves by over 90%, more than could be accounted for by
mining alone, suggesting these gloomier updates were based on improved
data.As a result, Energy Watch concluded the current reserves
figures are likely to represent the upper limit of available coal,
meaning that production will stall far sooner than expected. On the
basis of a country-by-country analysis, the group forecasts that
although global coal output could rise by about 30% over the next
decade, it will peak as early as 2025 and then fall into terminal
decline.
Ouch. Peak coal, peak oil, peak food, peak everything. That's the theme of this year's Agora Financial Investment Symposium — View from the Peak: Seeking Profits in a Time of Risk and Scarcity. As usual, it will be held in late July in beautiful Vancouver, British Columbia. Be advised: Space is extremely limited and considering the growth trajectory of attendance over the last couple of years, we may well have to turn people away. Check out the details here.
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