Peak Coal

Off the keyboard of Monsta666

Discuss this article at the Energy Table inside the Diner


The prevailing wisdom is that the US supply of coal is so abundant that the reserves will be able to satisfy current consumption needs for 200 years or more. Similar optimistic predictions are also made on a global level. However this optimism is not supported by facts based upon valid research.

In fact the quality and reliability of the available data makes any predictions highly suspect as much of the data has not been updated in many years often decades and there has been a history of reserves being repeatedly revised downwards. Moreover the quality of remaining coal is not only poorer but often has a higher polluting content due to higher CO2 emissions per capita energy, SO2, mercury and other toxins. In addition to this the poorer grade of coal is often more difficult to extract. It is this combination of factors that mean peak coal is likely occur much sooner than anticipated and this event is likely to occur just as the world – particularly the Far East – is making a transition from oil to coal.

Main article:

Peak coal unlike its peak oil counterpart is a little trickier to define as maximum coal production can pertain to one of two things: peal coal production can mean the maximum amount of coal mined or it can be defined on its energetic peak. The reason these differences exist is because the heat content of the four major grades of coal are significantly different as described below:

Anthracite – Has the highest carbon content (86% to 97%) and releases around 33,000 BTUs per kilogram. Rare in the U.S., it comprises only 0.2% of total coal production. All the anthracite mines in the U.S. are located in north-east Pennsylvania.
Bituminous coal – Contains the widest range of carbon content (45% to 86%) and releases around 23,100-34,100 BTUs per kilogram. Bituminous coal makes up 45% of U.S. coal production by weight and 54% by energy. West Virginia leads production, followed by Kentucky and Pennsylvania.
Sub-bituminous coal – Contains (35% to 45%) carbon content and releases around 18,200-28,600 BTUs per kilogram. Sub-bituminous coal makes up 47% of U.S. coal production by weight and 41% by energy. Wyoming produces the vast majority of sub-bituminous coal in the U.S.
Lignite – Contains the lowest carbon content (25 to 35%) carbon content and releases the lowest energy content of the four types at 8,800-18,260 BTUs per kilogram. Lignite makes up 7% of U.S. coal production by weight and 5% by energy. Texas and North Dakota are the main producers of lignite.

Sources taken from EIA[1] and American Coal Foundation.[2]

Calculating the time when the globe will reach its peak in coal production both in total tonnage mined or energetic levels is problematic because the data available is of poor quality. This poor data manifest itself in two ways: first countries have demonstrated a consistent tendency of overstating proven reserves only to downgrade these estimates in the following years. Between the periods of 1980 to 2005 for example global coal reserves have declined by 55% from 10 trillion tons hce (hard coal equivalent) in 1980 to 4.5 trillion tons hce in 2005.[3][4]On this point it should be noted that the EIA which has stated that it’s Estimated Recoverable Reserves (ERR) of 268 billion short tons for the US cannot technically be deemed reserves because of the fact these “reserves” have not been analysed for profitability of extraction.[5] It remains to be seen whether we will see further declines in total reserve figures but considering the past data amendments it seems likely there will be further reductions made in the future. Thus any projections made in this article must be taken with a degree of caution as it is likely the peak production will come earlier than projected due to subsequent future downgrades of total reserve amounts.

Another issue we see is that many countries – most notably China – have not updated their reserve data for many years despite the fact there has been significant extraction of reserves since the last update. In China’s case the last update was made in 1992 and this is despite the fact that it has extracted over 20% of its reserves since then.[3] With those shortcomings in mind we can try and make a basic overview of the coal situation in the four largest producers who account for 75% of global coal reserves [6]:

USA Russia China Australia India
2011 Total reserves 237 Billion tonnes 157 Billion tonnes 115 Billion tonnes 76 Billion tonnes 61 Billion tonnes
2011 % of world reserves 27.6% 18.2% 13.3% 8.9% 7.0%
2011 Production 992.8 Million tonnes 333.5 Million tonnes 3520 Million tonnes 415.5 Million tonnes 588.2 Million tonnes
Depletion rate 0.42% 0.21% 3.06% 0.55% 0.96%
Year reserves are depleted 2250 2488 2044 2193 2116

Data obtained from BP Statistical Review of World Energy June 2012.[6]


What becomes immediately apparent are the large production and rapid depletion rate of China’s coal reserves. If China could maintain this 2011 extraction rate then their entire coal reserves would be exhausted by 2044 assuming there are no additions or reductions made to the reserve figures. While this fact is startling enough we must assume that production rates will continue to rise in the coming years as China undergoes further economic growth. If we examine the coal production rates of China against GDP we find that the two factors are closely in line with one another as the graph clearly demonstrates so this assumption of rising extraction is not an unreasonable one to make:

Coal data obtained from BP Statistical Review of World Energy June 2012.[6] GDP data obtained from IMF/World Bank.[7]

For the mathematically inclined this expiration date

was calculated by applying the formula below:

Te = 1/k × In ((kR/ E)+1)[8]

Te= Expiration time k= percentage as a fraction i.e. 7%= 0.07 E=Production rate

Thus using the known figures of:

k= 0.075, R=1.15×1011,E= 3.52×109

Te = 1/0.075 x In ((8.625/3.52)+1) = 16.51 years

To calculate the time taken to deplete 50% of reserve base

Te= 1/0.075 x In ((4.3125/3.52)+1) = 10.66 years

If current trends were to continue then coal production would grow at a rate of 7.5% per annum which has been the average rate of growth for the 2000-11 period. Taking our current knowledge of existing production rates, total reserve amounts and growth rates we can calculate the number of years until China depletes 50% of its reserve base (when peak coal would theoretically occur) and we find the time required to deplete 50% of the reserve would be 10.7 years while the entire reserve would be depleted in 16.5 years if current growth trends were to continue.Thus by applying some arithmetic we can predict that China will reach domestic peak coal output of 7.61 billion tonnes by around 2022 or 2023.[8] This peak year is not much different to the analysis provided by Dr. Minqi Li who projected a peak coal for China in 2027.[9]

As stated previously, these figures must be approached with some scepticism as we cannot say with any confidence how accurate the data is. Still, even if we were to assume the best that this data is indeed accurate then the figures still paint a rather troubling picture as it demonstrates that current growth rates of coal consumption cannot be sustained for a period much beyond a few years even under the best of circumstances.

On the other hand if we assume that China is similar to other nations and will make downward revisions to its reserve base in the future then the peak is likely to occur even earlier than projected and this will be especially true if we apply the principle of Liebig’s law of minimum. That is production will be constrained by a factor that is most scarce in the production process. In China’s case what is likely to constrain production will be insufficient rail/road infrastructure to transport the coal, water shortages required for power plants and other bottlenecks be it economic (future demand rises more slowly), political (other energies gain more political support) or social (people do not want more pollution) in nature. Indeed it is these combination of reasons why Zhang Guobao; head of the China’s Energy Administration does not wish coal production to exceed four billion tonnes per annum.[10] If that does prove to be the case then peak coal production will be reached in China in the very near future. This lower peak should enable reserves to last a bit longer but it will come at a cost of future GDP growth as China is heavily dependent on coal to generate its electrical needs (in 2009 for example 78.7% of total electrical production and 67.1% of total energy production in China came from coal).[11] As a result, a reduction in coal production growth will reduce electrical supply growth and likely increase utility costs for consumers and businesses in the country. Whatever happens the depletion rates of coal will exceed 3% per year in either scenario which is an unacceptably high rate of depletion and means there reserve will be depleted by 2050.


Often dubbed the “Saudi Arabia” of coal the US has the highest coal reserves in the world accounting for 27.6% of global coal reserves. [6] It is often quoted by the media that the US has enough coal to last over 200 years under current rates of consumption. While this statement sounds hopeful there are numerous grounds to doubt whether this figure is really accurate. First of all, the estimates made in the 1970s have not been updated. [18] Second as stated earlier, the EIA has admitted that its reserve figures of 268 billion short tons are not reserves in the true sense as not all reserves have been analysed for profitability.[12] What is more if we plot a graph for US coal production breaking down production into the four grades of coal we find discover a number of trends that may cast doubt that coal reserves are as abundant as commonly thought:

Coal production data obtained from EIA[13] and energetic data obtained from BP Statistical Review of Energy June 2012.[6]

* = Please note that anthracite can be found at the bottom of the graph over the x-axis.

From this graph we see that the best source of coal; anthracite has largely been depleted. In fact the US anthracite production peaked way back in 1914[14] while the second best source, bituminous coal peaked in 1990 at 693 million short tons. It should be noted that bituminous coal production could, at least in theory, increase from current levels of production as the 1990 Clean Air Act did curtail coal production in the East coast as bituminous coal from this region contained a higher sulphur content.[15] Still, it remains doubtful whether the 1990 peak could ever be eclipsed even if this act was repealed on account production has declined by 28% since the 1990 peak.

More significant however is the fact that the US has peaked on an energetic basis in 1998 with an output of 603.2 million tonnes of oil equivalent. The chances of this energetic peak being surpassed are higher however as 2008 production was within 2% of this energetic peak and the recent declines in gross coal output can reasonably be attributed to the recent shale gas revolution that has – at least temporarily – made natural gas the cheapest fossil fuel in the US market. Once the shale gas revolution ends and natural gas prices rise to more typical levels then we can determine whether this peak will be surpassed with greater certainty.

In any case we can say the EROEI for the US coal will decrease from now on because of the fact that more coal will be needed to be mined to deliver the same energy output due to the quality of coal being mined declining. This declining EROEI is also reflected in the fact that since 2000 US worker productivity, which is measured by tons mined per worker, has declined suggesting that the remaining coal is harder to extract and most of the “easy coal” has already been mined.[4] This decline in worker productivity is a complete reversal of the historic trend in the US coal mining as prior to the year 2000 worker productivity had always been increasing in the country. This declining EROEI is likely to mean that we may have peaked in the amount of net energy this coal can provide, and considering that net energy is the energy used by greater society then that is troubling news indeed. For those that are interested in learning more about US coal reserves I would recommend watching the video below:

Global Outlook

While the US has seen a recent decline in coal production and consumption, the same cannot be said for the rest of the world where coal continues to be the cheapest fuel on a BTU basis with a million BTUs in coal costing around $2.5-$3.5.[16] It is this fact that makes coal the favourite choice for many developing nations in the Far East that utilise coal as the chief energy source as coals low cost has been the fuel to drive rapid economic growth. Moreover due to stringent regulations regarding coal pollution in the EU and US much of the heavier industries have shifted to Asia to take advantage of these lower costs. All this means that the production and consumption rates of the Asian block has sky-rocketed in the last 10 years with production increasing by 128.6% in Asia and 63.5% on a global basis since 2000. Off course for people concerned about climate change, CO2 emissions and other pollutants released by coal this increase is terrible news; it is certainly not the future many envisioned and if current trends hold then coal will be set to become the primary energy source of the world as soon as 2013.[6]

Data obtained from BP Statistical Review of World Energy June 2012.[6]

Conventional wisdom – a wisdom that is also shared by many climate change proponents – is that there are abundant amounts of coal in the ground that is sufficient to meet our needs for decades if not centuries. However upon closer inspection of actual reserve estimates we find there is great uncertainty on not just the reliability of the data available but there are also serious questions marks about whether our reserves can cope with the level of growth of consumption in recent years particularly the growth we see in the Asian countries.

Another troubling fact is the large depletion rates in China are likely to result in peak coal occurring in China within the next 20 years. If that is the case then that would have large ramifications on the countries future growth, as despite assertions to the contrary, coal dominates the energy mix in China and will continue to do so for the foreseeable future. Indeed it is this combination of rapidly rising demand and frequent downgrading of reserves that has organisations such as the Energy Watch Group projecting a global peak production of coal in the year 2025.[17]

Diagram from Energy Watch Group projects global energetic peak coal occurring in 2025.[17]

Richard Heinberg and David Fridley also share similar sentiments to the Energy Watch Group stating that the world will soon see the end of cheap coal.[18] These higher costs will come as combination of declining coal quality and the remaining coal deposits being buried deeper underground or away from population centres. This issue of deeper coal deposits will be a particular issue in China as much of its large coal reserves are deep underground and will therefore pose considering engineering challenges to extract. Meanwhile in Siberia and Alaska there are large coal deposits in those regions but it seems unlikely these sources will be utilised due to the fact it would require a considerable amount of capital investment to not only mine the isolated and inhospitable regions but also build the necessary infrastructure for the coal to be transported vast distances so it can be sold in areas where it is needed.

The issues mentioned above will be further exacerbated if the world experiences a terminal decline in world oil consumption as demand for coal will increase even further to make up for the shortfall in lost oil energy. However what people are likely to find is that not only will there not be enough coal to meet new demand but it is also quite likely that any coal that is still available will be of a poorer quality and harder to extract. This therefore means the net energy or EROEI these coal deposits yield is likely to not be sufficient to take the slack from the lost oil production to allow economic growth to occur as commonly believed by many people and pundits.


[1] = Today in Energy (EIA)
[2] = Types of Coal (American Coal Foundation)
[3] = Coal: Resources And Future Production (Energy Watch Group as .pdf file – pg.11)
[4] = Peak Coal – Coming Soon? (The Oil Drum)
[5] = Full cost accounting for the life cycle of coal (The New York Academy of Science Journal as .pdf file – pg. 4)
[6] = BP Statistical Review of World Energy June 2012 (BP as .pdf file)
[7] = China GDP: how it has changed since 1980 (the guardian)
[8] = Forgotten Fundamentals of the Energy Crisis (Al
[9] = Peak coal and China (Energy Bulletin)
[10] = China’s Coal Crisis (The Wall Street Journal)
[11] = Facing China’s Coal Future (OECD/IEA as .pdf file – pg. 7)
[12] = US Coal Reserves: 1997 Update (EIA as .pdf file – pg. eight)
[13] = Coal (EIA)
[14] = Nuclear And Fossil Fuels (Dr. M. King Hubbert as .pdf file – pg.36)
[15] = Clean Air Act Taking Toll on High-Sulfur Coal Mines (Los Angeles Times)
[16] = Coal: The Ignored Juggernaut (PeakProsperity)
[17] = Coal: Resources And Future Production (Energy Watch Group as .pdf file – pg.7)
[18] = The end of cheap coal (Energy Bulletin)


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