Environment
1:09 pm
Tue December 18, 2012

Energy Agency Predicts Coal's Short-Term Prospects Are Bright Internationally

In the United States, recent data has shown that coal is losing ground, and is now neck in neck with natural gas in terms of the percentage of electricity generation the country gets from each fuel. Coal use is even diminishing in the southeast, a region that's typically relied on coal-fired power.

But that's not indicative of what's happening worldwide, and new research shows coal could even surpass oil as the world's top energy source by 2017.

The International Energy Agency says abundant coal reserves and increasing demand from China and India will add to coal's popularity worldwide. And that will have an effect on the environment.

The report notes that in the absence of a high carbon price, only fierce competition from low-priced gas can effectively reduce coal demand. “The US experience suggests that a more efficient gas market, marked by flexible pricing and fueled by indigenous unconventional resources that are produced sustainably, can reduce coal use, CO2 emissions and consumers’ electricity bills, without harming energy security,” said [IEA Executive Director Maria] van der Hoeven. “Europe, China and other regions should take note.”

She noted that the report’s forecasts are based on a troubling assumption, namely, that carbon capture and sequestration (CCS) will not be available during the outlook period. “CCS technologies are not taking off as once expected, which means CO2 emissions will keep growing substantially. Without progress in CCS, and if other countries cannot replicate the US experience and reduce coal demand, coal faces the risk of a potential climate policy backlash,” she said.

By 2017, the IEA estimates India will be the world's largest seabourne importer of coal. Some of that coal is expected to come from Kentucky--according to the terms of a trade deal announced this summer--and Appalachian coal producers are hoping that the increased demand from India will help make up for declining U.S. demand. But that first shipment of coal was scheduled to go out in September, and has been delayed for unknown reasons.

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