CHARLESTON, W.Va. -- The International Energy Agency projected Monday that global demand for coal will continue to grow over the next five years, but warned that "coal in its current form is simply unsustainable."IEA Executive Director Maria van der Hoeven said, "radical action is needed" to control greenhouse gas emissions, but lamented, "Radical action is disappointingly absent.""As we look to the long term, we must ask what role coal has to play in the energy mix that we want to achieve -- because there will be a role," van der Hoeven said. "But without mitigating the polluting effects of coal, pursuing business as usual will have enormous and tragic consequences."In its latest report on the medium-term coal market, the IEA projected that demand will grow at an average yearly rate of 2.3 percent through 2018. That compares to last year's forecast of 2.6 percent annual growth for the five years through 2017.
The report says that tougher Chinese policies aimed at reducing dependency on coal will help restrain global demand over the next five years. While China will account for nearly 60 percent of new global demand through 2018, government efforts to encourage energy efficiency and diversify electricity generation will dent that growth, slowing the global increase in demand, the IEA said.IEA researchers also noted two opposing trends in China -- "a rebalancing of the economy into a less energy intensive model" and "the establishment of an urban middle class with increasing power needs."In the United States, the IEA says, coal demand "will remain sluggish.""While higher gas prices will temporarily allow U.S. coal demand to recover over the next couple of years, coal demand in 2018 is projected to be as low as 2012 levels," the report said. "Increasing shale-gas production will create intense price competition for coal; environmental regulations on emissions will lead to the closure of significant coal-fired generation capacity."At the same time, [carbon dioxide] policy will hinder investment in new coal plants," the IEA report said.Van der Hoeven said that coal-fired heat and power generation are the largest singles source of carbon dioxide emissions resulting from fuel combustion. More than three-fifths of the rise in global CO2 emissions since 2000 is due to the burning of coal to produce electricity and heat, she said. And, she said, the health problems tied to local pollution from coal combustion should not be overlooked.Also, van der Hoeven noted, some major counties have recently announced policies to encourage the construction of more efficient coal plants, and to promote carbon capture and storage, or CCS."We welcome those efforts as part of the broader push to reduce the environmental impact of coal," she said. "Yet if nothing more than those emissions-reduction policy commitments and pledges announced to date are implemented, we project that the long-term increase in global temperatures will reach 4 degrees Celsius."This would exceed the globally agreed target of limiting the long-term rise in temperatures to 2 degrees Celsius and would lead to a devastating and costly change in climate, the first signs of which we are already seeing today."While global coal demand is expected to rise, U.S. government studies have projected that production of coal in the Central Appalachian region -- mostly Southern West Virginia and Eastern Kentucky -- will drop dramatically over the next two decades. Analysts blame cheap natural gas supplies, tougher environmental rules and the mining out of Central Appalachia's easiest-to-mine coal supplies.The IEA report says that, "Uncertainties surrounding future demand in China, and actions by environmental and anti-coal groups will also hamper the growth of U.S. coal exports, despite the existence of promising low-cost production areas, including the Illinois and Power River basins."
Reach Ken Ward Jr. at email@example.com or 304-348-1702.