Monday, July 14, 2008

MuseLetter: Coal in China

China is the world's foremost coal producer and consumer, surpassing the United States by a factor of two on both scores and accounting for 40 percent of total world production. Coal in China has a long history dating back over two millennia. Production achieved one million tons per year in 1903 and the present annual output is roughly 2.5 billion metric tons (tonnes). China currently has roughly 25,000 coalmines, with 3.4 million registered employees. Some of these coalmines are illegally operated. The productivity of China's coal mining is low: in 1999, 289 tons of coal were produced per miner averaged across all the nation's mines, versus almost 12,000 tons per miner in the US. Thin overburden allows surface mining in some areas, but only four to seven percent of China's reserves are suitable for surface mining, and of these most consist of lignite.

The pace of China's headlong dash toward increased coal consumption is legendary: in recent years an average of one new coal-fed power plant has fired up every week. The resulting annual capacity addition is comparable to the size of Britain's entire power grid. This is no doubt the outsourcing of industry at work. As the world moves more and more industrial production to China, this requires China to build more electrical production plants, and their available fuel is..coal. Coal isn't just used to generate electricity, it also feeds into metals production and fertilizer production.

There is use of Coal-to-Liquids technology. The article doesn't name this but the technique was developed in Germany shortly before WWII and was used by Nazi Germany to provide liquid fuel to drive the German war machine. Anyway CTL is an energy intensive method for liquifying coal, it does produce a usable fuel as the Germans proved in WWII, but it is very expensive. A driving force for this is the cost to transport coal from mines to power plants, usually coal is transported by train, but a large portion of mines are not on the rail network and must be transported by trucks. This requires diesel fuel..

According to China's Coal Research Institute, each barrel of synthetic oil produced from coal will consume at least 360 gallons of fresh water. (For comparison: 360 gallons equals roughly 8.5 barrels; thus at this ratio of CTL to water, 286,000 barrels per day of CTL would require approximately 2.5 million bpd of water.) And most areas of China are already experiencing water scarcity.

The article summarizes several reports looking into when or if the peak in China's coal production will occur. The estimates range from 2006 through 2050. Clearly the 2006 estimate is wrong as we're in 2008 and the production has only increased, but they wave their hands about faulty data. In any case since Coal is a limited resource just like Oil, there will be a peak in China's Coal production and it's likely going to be within the coming 50-100 years.

China's furious pace of economic growth, which is often touted as a sign of success, may turn out to be a fatal liability. Simply put, the nation appears to have no Plan B. No fossil fuel other than coal will be able to provide sufficient energy to sustain current economic growth rates in the years ahead, and non-fossil sources will require unprecedented and perhaps unachievable levels of investment just to make up for declines in coal production—never mind providing enough to fuel continued annual energy growth of seven to ten percent per year.

If and when China ceases to have enough new energy to support continued economic growth, there are likely to be unpleasant consequences for the nation's stability. If such consequences are to be averted, the country's leadership must find ways to rein in economic growth while reducing internal social and political tensions, meanwhile investing enormous sums in non-fossil energy sources. A serious attempt to reduce greenhouse gas emissions would entail an identical prescription. It is a tall order by any standard, but serious contemplation of the alternative—which, in the worst instance, could amount to social, economic, and environmental collapse—should be bracing enough to motivate heroic efforts.

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