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.
Continue reading In Good Company: A Look at Global Coal Reserve Revisions
In my previous post I highlighted the recent, quiet admission by the US EIA (in a fine-print footnote to Table 15 of their 2012 Annual Coal Report) that they do not know what fraction of our nation’s large store of coal resources might be economically accessible, and thus potentially classified as reserves.
CEA has long highlighted indications that a revision like this might be in the works, including in our most recent round of coal reports issued last fall (see: Warning: Faulty Reporting of US Coal Reserves). But we’re not the only ones. Plenty of other people have pointed out the same thing over the years. Including…
Continue reading A Long Time Coming: Revising US Coal Reserves
At the end of 2013, the US Energy Information Administration (EIA) acknowledged that it does not know whether the vast majority of US coal can be mined profitably. If coal mining isn’t profitable, then barring some grand socialist enterprise the black stuff is probably going to stay in the ground where it belongs.
You might think this kind of revision would have warranted a press release, but the EIA’s change of heart was buried in a fine-print footnote to Table 15 of their 2012 Annual Coal Report, which tallies up all the coal resources and reserves in the US, state by state. The new footnote says:
EIA’s estimated recoverable reserves include the coal in the demonstrated reserve base considered recoverable after excluding coal estimated to be unavailable due to land use restrictions, and after applying assumed mining recovery rates. This estimate does not include any specific economic feasibility criteria. [emphasis added]
This stands in contrast to the footnotes for the same table in their 2011 Annual Coal Report, and many prior years:
EIA’s estimated recoverable reserves include the coal in the demonstrated reserve base considered recoverable after excluding coal estimated to be unavailable due to land use restrictions or currently economically unattractive for mining, and after applying assumed mining recovery rates. [emphasis added]
Continue reading US EIA on the Economics of Coal: No Comment
PEAK COAL REPORT: U.S. COAL “RESERVES” ARE INCORRECTLY CALCULATED, SUPPOSED 200-YEAR SUPPLY COULD RUN OUT IN 20 YEARS OR LESS
Federal Estimates Overstate Reserves by Including Coal That Cannot Be Mined Profitably; Production Already Down in All Major Coal Mining States… And Utility Consumers Are Facing Rising Energy Bill Prices.
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WASHINGTON, D.C. – October 30, 2013 – America does not have 200 years in coal “reserves” since much of the coal that is now left in the ground cannot be mined profitably, according to a major new report from the Boulder, CO-based nonprofit Clean Energy Action (CEA). The CEA analysis shows that the U.S. appears to have reached its “peak coal” point in 2008 and now faces a rocky future over the next 10-20 years of rising coal production costs, potentially more bankruptcies among coal mining companies, and higher fuel bills for utility consumers.
Continue reading Warning: Faulty Reporting on US Coal Supplies
The Finite World – Krugman at the NY Times talking about the resurgence in global commodity prices over the last year. Economic recovery in developing economies driving the markets, with the US, and indeed the entire West, largely irrelevant. Not only are we a smaller than ever slice of the pie, we’re not the ones building cities for hundreds of millions of people from scratch. I’m not sure I really understand his conception of inflation though. If rising commodity prices don’t constitute the most basic, raw form of inflation (you get less physical stuff in exchange for the same amount of labor performed), then I’m not sure what does. Historically we’ve made the economic approximation that natural resources are infinite, and all you have to do is pay the cost of going out and getting them. If that changes, then things will get weird. Maybe even weird to the point of sensible!