Renewable energy still has a long way to go before de-throning King Coal. In fact, coal will challenge oil as the world’s top energy source by 2017 and Australia will play a leading role in feeding that filthy fossil fuel addiction.
The rumours of coal’s death – while pleasing – are greatly exaggerated.
The International Energy Agency (IEA) says even though the coal demand growth rate has slowed, global coal consumption will increase in every region of the world between now and 2017 except in the United States, where it’s being pushed aside by natural gas.
“In fact, the world will burn around 1.2 billion more tonnes of coal per year by 2017 compared to today – equivalent to the current coal consumption of Russia and the United States combined,” says IEA Executive Director Maria van der Hoeven.
The IEA’s annual Medium-Term Coal Market Report (MCMR) states China and India will lead the growth in coal consumption over the next five years.
Ms. van der Hoeven also sounded a warning about relying on coal’s unicorn, carbon capture and sequestration (CCS) to clean up the subsequent emissions mess.
“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.”
Replication of the US experience doesn’t necessarily mean a global reduction in coal demand if like the US, other countries are simply outsourcing much of their manufacturing and therefore carbon pollution to countries such as China and India. Unlike other forms of “out of sight, out of mind” pollution; carbon emissions do not stay in their country of generation.
The report notes that in the absence of a high carbon price, only fierce competition from low-priced gas can effectively reduce coal demand – and gas; which has its own environmental issues, is not cheaper in many markets.
Between now and 2017, the IEA is tipping that Australia will again become the world’s biggest coal Typhoid Mary exporter. It expects Australia to export 356 mtce by 2017, well above Indonesia’s total exports then of 309 mtce.
Highlights from the IEA Medium-Term Coal Market Report (MCMR) can be viewed here.
