I have been trying to follow the Coal story in China for more than two years, when a series of articles made me realise environmental impacts were creating serious obstacles to continued growth. Coal extraction in China peaked that same year, but is this new trend merely circumstantial or something more lasting? Earlier this year I postulated that fundamental changes were about.
Since then, news have multiplied on the rapid decline of Coal consumption and extraction in China. At first there were reports of an ongoing renewal of the blast furnace fleet, but more recently, it is becoming increasingly apparent that steel consumption has saturated - the law of diminishing returns is catching up with infrastructure deployment. Slowly, this declining trend is looking ever more terminal.
The problem with Coal is the lack of detailed or recent extraction figures on the public domain. In recent times my understanding on this has been exclusively drawn from media articles (most of which were highlighted in the weekly press review). The past few days I entertained an e-mail exchange over this matter with Jean Laherrère, the man with the numbers. Jean retains access to commercial energy databases, from which he is able to draw detailed hindsight. As usual, his view on Coal is better summarised in a few graphs reproduced below the fold.
From the onset, it is clear that for Jean Laherrère Coal extraction in China has peaked. The relentless growth witnessed in the decade after the turn of the century is unrepeatable; if anything, it anticipated the extraction peak. Back in 2013 the Energy Watch Group (EWG) also proposed a similar scenario, but they could not possibly imagine Coal could be peaking in China as they released their report.
Jean projects an ultimate of 200 Gtoe for China, almost one third of the worldwide ultimate.
Regarding India, Jean expects extraction to resume its growth, considering the energy deficit the Indian population presently endures. In the weekly review I have been pointing the difficulties in passing on the costs of increased extraction rates to final consumers. Eventually, it might come to be more economic to import cheap coal from Indonesia or Australia than to extract it in India.
Heretofore, Jean relied on the BGR's resource estimates to arrive at a ballpark ultimate of 750 Gtoe for the World. This earlier than expected peak in China has lead him to revise this figure and consider alternative scenarios, in line with lower ultimate estimates.
To reflect the wide uncertainty surrounding Coal figures, Jean now works with three different extraction scenarios, with ultimates of 550 Gtoe, 650 Gtoe and 750 Gtoe. The lowest of these scenarios corresponds to an immediate peak. The IEA has also revised its extraction projection last year, and is now in line with Jean's highest scenario.
And this is how the medium Coal scenario compares with the other fossil fuels. Note that Jean adds agro-fuels to Petroleum, therefore the reference to "all liquids".
Summing up these three different energy sources Jean obtains a peak around 2025 just over 12 Gtoe/a. Removing non-fossil liquids we get a peak within the decade. The cumulative ultimate of 1 400 Gtoe is on the high end of estimates by independent researchers.
A different perspective shows how Coal will eventually become again the most extracted fossil fuel. Petroleum and Gas are ephemeral when compared with Coal.
In conclusion: Coal has peaked in China, is possibly far from peaking in India and not that far from peaking worldwide. This updated scenario now brings Jean Laherrère considerably closer to other independent researchers, such as the EWG, the Global Energies Studies group of the University of Uppsala or David Rutledge.
The cornucopian scenarios of plenty once propagated by the IIASA, the IPCC or even the IEA (including an increase of 400% in China's Coal extraction) look now more surreal than ever. In fact, an immediate peak in global fossil fuel extraction is not at all out of the question. And a peak within the next decade is more likely than not.
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