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The Beginning Of The End For Coal?

June 18, 2017
tags: ,

By Paul Homewood






This year’s BP Energy Review came out while I was away last week.

The general message seems to be little change. These are Spencer Dale’s highlights:



It has been pretty clear for a few years now, indeed arguably since 2008, that both the economic and energy growth rates seen in the early 21st C have long gone.

I’ll be doing some more analysis bit by bit, but one of the items that has attracted most attention has been the slight drop of 1.4% in coal consumption.

This has led to comments such as this from PEI:

The fortunes of coal appear to have taken a decisive break from the past,” said Spencer Dale, BP’s chief economist, explaining its decline was due to a number of “structural, long-term factors”.

While this may be true of the EU, was for the US, it rather seems a lot of wishful thinking from BP, as a proper analysis shows.

Globally, as we’ve already seen with energy growth, the big rises in coal consumption petered out a few years ago, but the drops since then have been tiny in comparison to the totals.



When we look at the breakdown, outside of the US, EU and China, consumption is still rising. Whether the US returns to coal in a big way remains doubtful while gas is so cheap, but this cannot be guaranteed long term.




But the most interesting figure is China’s. It is believed that coal power output increased last year.

However, China has quite naturally been replacing old inefficient and polluting power plants with new modern ones.

This will of course lead to the use of less coal per KWh. While we may continue to see flatlining or small reductions in China’s coal usage, this is a million miles away from Spencer Dale’s assertion.



One other factor in the muted demand for coal has been the standstill in steel production last year, both globally and in China.

Steel production is, of course, a major user of coal, both directly as part of the ironmaking process, and also as a supplier of power. Year on year, output has barely risen at all.




It is also a given that construction output in China has slowed down, which again has a major impact on coal demand.


In summary, there is little evidence to support Dale’s statement that the fortunes of coal appear to have taken a decisive break from the past.

Despite political pressures, particularly in Europe, and competition from shale gas, all of the data points to coal remaining a crucial element in the global energy mix for many years to come.

  1. markl permalink
    June 18, 2017 6:11 pm

    Reality wins again.

  2. Rasa permalink
    June 18, 2017 6:26 pm

    Coal Fracked Gas Conventional Gas… its all FF as far as the eye can see.
    FF products are simply very powerful cheap abundant and fit the infrastructure.

  3. Charles Moncur permalink
    June 18, 2017 6:53 pm

    BP EXXON an other major oil and gas companies want carbon tax as this would disadvantage coal (Carbon/Hydrogen ratio) and give them a bigger junk of the energy market. So it is not surprising that any change in coal share of energy market has elicited the statement by BP. Lets see what happen in USA with Trump’s revitalising of the coal industry?

  4. June 18, 2017 7:09 pm

    Coal use will tend to go down as countries such as China develop, people will no longer need to use it for heating, as we did in the UK until around 1960, when gas-fired central heating and electric heaters appeared.

  5. June 18, 2017 7:54 pm

    We got more and better altenatives.

    Kind regards,

    • HotScot permalink
      June 18, 2017 8:06 pm


      like gas and nuclear. Certainly not renewables.

  6. rwoollaston permalink
    June 18, 2017 10:17 pm

    I’m suspicious of the China figures. I understand they are self-reported, and they do not stack up with the increase in China’s energy the same period. By this reckoning, China is using more coal.

    • Graeme No.3 permalink
      June 18, 2017 11:01 pm

      You’re surely not suggesting that the Chinese are reporting lower demand to the outside world thereby depressing the asking price for imports?

      • Athelstan permalink
        June 19, 2017 12:12 am

        Tractor production figures always go up, tovaritch.

        I inwardl groan when I hear the media financial experts waxing on about this that and the other. Stats! aaarrrgghhh Stats, yes those financial/Economic stats ex the UK government, the EU, the PRC and for that matter any African country, BRICS + North Korea.
        As, the corporate blob gobble up the little guys, and creams off the profits, crops, ores, fossil fuel at the fore. Aye that International corporate blob their slush funds just grow and grow and they are sloshing in it – primed for hostile takeover.

        Whereas, there are only debtors and creditor nations, Britain is in deep doings as are most of western Europe bar the Germans who laugh all the way to Buba.
        The PRC’s bubble will burst and then we’ll all get some kicking and the Saudis can sell oil at $5-10 a barrel and still break even but their dynasty is creaking. It’s all a great facade and currencies are debased, I still don’t know how it floats but float on it does.

        I also guffaw at, the legerdemain and jiggerypokery which emanates out of major Oil companies. All of ’em, they play fast and loose with the truth and playing both ends against the middle [ie fossil fuel producer and wear their green ‘advocates’ garb]. For sure, it suits their CEO boards, shareholders, governments and single malts, heartfelt pats and smug grins all round where: all bases covered. It’s a big game and chain yanking at the double it’s soooo brilliant, a ‘shell’ game but watch the pee…………….because it is being extracted.
        The proles sing and dance to the tune and the Pied Piper plays his green tunes and leads, down to the river.

  7. John F. Hultquist permalink
    June 19, 2017 1:38 am

    In my great grandfather’s world there was a demand for scythes. That was good exercise but the demand disappeared. Was that a big issue?
    Exercise centers had to be invented.
    Society changes. So what?

  8. June 19, 2017 10:18 am

    From the IEA :

    Q: Is coal production declining?

    A: No, far from it. Since the start of the 21st century, coal production has been the fastest-growing global energy source. While provisional IEA figures show a slight decrease in 2014 driven by a decline in China and some exceptional circumstances such as unrest in Ukraine, the IEA sees global supply increasing at an average rate of 0.6% through 2020.
    . . .
    Global coal consumption increased by more than 70% from 4 600 Mt in 2000 to an estimated 7 876 Mt in 2013, and at a 4.2% annual rate, coal was the fastest-growing primary energy source in the ten years through 2013. But demand growth has slowed of late.

  9. Roy Hartwell permalink
    June 19, 2017 2:04 pm

    Perhaps Maggie wasn’t so daft when she ushered in the demise of the coal industry in the ’80s. Not only did she crack the power of the unions but ensured we still had massive reserves of FF for future use when others had blown theirs.

  10. June 21, 2017 10:58 am

    Coal trains are rolling out of West Virginia once more and a new mine just opened nearby in Pennsylvania. Gas pipelines are moving forward and steel production is rising. Now if we can keep Germany’s sticky fingers off our riverine forests in the southeast, we will be making progress there too.

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