In my last post, I recounted some of the indications that have surfaced over the last decade that US coal reserves might not be as large as we think. The work done by the USGS assessing our reserves, and more recently comments from the coal industry themselves cast doubt on the common refrain that the US is “the Saudi Arabia of coal” and the idea that we have a couple of centuries worth of the fuel just laying around, waiting to be burned. As it turns out, the US isn’t alone in having potentially unreliable reserve numbers. Over the decades, many other major coal producing nations have also dramatically revised their reserve estimates.
Internationally the main reserve compilations are done by the UN’s World Energy Council (WEC) and to some degree also the German equivalent of the USGS, known as the BGR. Virtually all global (publicly viewable) statistics on fossil fuel reserves are traceable back to one of those two agencies. For instance, the coal reserve numbers in the International Energy Agency’s (IEA’s) 2011 World Energy Outlook came from the BGR; the numbers in BP’s most recent Statistical Review of Energy came from the WEC.
Of course, both the WEC and the BGR are largely dependent on numbers reported by national agencies (like the USGS, the EIA and the SEC in the case of the US), who compile data directly from state and regional geologic survey and mining agencies, fossil fuel consumers, producers, and the markets that they make up.
Looking back through the years at internationally reported coal reserve numbers, it’s surprisingly common to see big discontinuous revisions. Below are a few examples from the WEC Resource Surveys going back to 1950, including some of the world’s largest supposed coal reserve holders. In all cases, the magnitude of the large reserve revisions is much greater than annual coal production can explain.
Between the 2001 and 2004 WEC surveys, Germany reduced their hard coal reserves from 23 billion tons to 183 million tons… i.e. by more than 99%. Over the same period they also reduced their estimated lignite reserves from 43 billion tons to 6.5 billion tons — an 85% drop. The notes in the 2004 WEC survey say:
The data advised by the German WEC Member Committee for the 2004 Survey reflect a reassessment of coal resources and reserves. The new numbers comply with the recommendations of the UN Economic Commission for Europe, within the context of the definitions specified for the SER.
Earlier assessments of German coal reserves (e.g. end-1996 and end-1999) contained large amounts of speculative resources which are no longer taken into account. Much of the former ‘proved amount in place’ and ‘proved recoverable reserves’ has been moved to ‘additional amount in place’ and ‘additional reserves recoverable’, respectively.
Then in 2006 Germany revised their lignite reserves back up to 40 billion tons. This change was reflected in the 2010 WEC Survey, with the note:
The assessment of lignite reserves has been significantly revised since that reported for the 2007 SER. In previous Surveys only the proved recoverable amount of lignite reserves in existing and planned surface mines was reported. For better comparability with reserve data from other countries the present numbers report the entire German lignite reserves.
It’s interesting that this explanation is pretty unrelated to the original reasoning given several years earlier for the downward revision. The WEC also noted that whether or not remaining German hard coal would be economically recoverable depended on the continuation of mining subsides, due to be phased out by 2018.
Looking back further, I have to wonder what caused the precipitous drop in reserve estimates in the 1960s.
Between 2004 and 2007, India cut their estimated coal reserves by about a third, from 90 billion to 60 billion tons. No note was included explaining this change in the 2007 Survey. Additionally, between the 1960s and the 1980s India dropped its reserve estimates from more than 120 billion tons to 12 billion tons (a 90% reduction), before bumping them back up to 63 billion tons in 1989 (a 500% increase).
Between the 2010 and 2013 WEC Resource Surveys, Indonesia zeroed out their modest bituminous and lignite reserves, and increased their sub-bituminous reserves by nearly a factor of 10, from 2.9 billion tons to 28 billion tons! No explanation was given for this increase in the WEC Survey notes. They reported 32 billion tons in 1992 and 1995, but only 3 billion tons in 1989 and 5 billion tons in 1998.
Between 1995 and 2010, Poland’s hard coal reserves gradually dwindled by ~90%, from more than 42 billion tons to around 4 billion tons. From 2001 to 2004 the decrease was attributed in the WEC survey notes to the new reserve numbers only including developed deposits (i.e. mines in operation — along the same lines as the German reserves reported in 2004 and 2007), but further reductions continued without detailed explanation. Like many of the countries listed here, they also had dramatic reserve revisions in the late 1960s up through 1974.
Between the 1998 and 2010 WEC Surveys, South Africa’s hard coal reserves were reduced by about 50%, from 60 billion tons to 30 billion tons. And then there’s the gigantic plunge and rebound between 1968 and 1986. In 2010 the WEC notes point out that “Assessments of South Africa’s coal resources remain in a state of flux.” and that “there is not yet total consensus in respect of the tonnages that are currently economically and technologically recoverable.” If only all the other respondents were so honest!
The United Kingdom:
For a century, up until the 1960s, the UK reported proven coal reserves that bounced around between 150 and 200 billion tons. Then suddenly in 1968 it dropped to about a tenth that much, and in 1974 they reported just 4 billion tons. In 1980 the number shot up by more than a factor of ten to 45 billion tons for a single reporting period, before being slashed by a factor of 10 in 1986. From then on UK reserve numbers eroded steadily in each successive survey reaching just 220 million tons in 2004. Today the UK produces less than 20 million tons of coal a year, and soon there will be but a single remaining mine in Britain.
Russia & China:
And then we have Russia and China, ostensibly holding the world’s second and third largest coal reserves respectively (after the US). China is currently also both the world’s largest coal producer and largest coal consumer. China hasn’t responded to the WEC survey since 1992. Russia has claimed exactly the same ~200 billion tons of coal reserves since Jimmy Carter was president. Those numbers are still used by the WEC and others. Especially in light of the past big revisions other countries have made above, how much information do these stale estimates really give us about the current state of affairs?
Global Coal Data — A Sorry State of Affairs
In 2007 Germany’s Energy Watch Group explored the global reserve/resource reporting issue in greater depth in their report Coal: Resources and Future Production, (totally worth reading if you want more information). Among their conclusions:
Global coal reserve data are of poor quality, but seem to be biased towards the high side. […] There should be a wide discussion on this subject leading to better data in order to provide a reliable and transparent basis for long term decisions regarding the future structure of our energy system.
In 2011 Caltech professor Dr. David Rutledge (who also generously provided us with a tabulation of the pre-digital era WEC reserve numbers used above) published a related paper in the International Journal of Coal Geology, and similarly found that early reports of coal reserves had tended to systematically overestimate ultimate production — at least where the outcome could be tested in mature coal fields (the UK, France and Belgium, Japan and S. Korea, Pennsylvanian anthracite).
Why does there seem to be a bias toward overestimating ultimate production early on, followed by dramatic downward revisions as production begins to decline? I think the answer has to do with the political power of incumbent industries, and their ability to shape the perception of national interests. The changes that lead to these big revisions are mostly political and economic, not geological, and I’ll explore some of them in my next post!
- US EIA on the Economics of Coal: No Comment
- A Long Time Coming: Revising US Coal Reserves
- In Good Company: A Brief History of Global Coal Reserve Revisions
- Coal Geology vs. Coal Economics & Politics