Reports of coal’s resurrection have been greatly exaggerated, the Institute for Energy Economics and Financial Analysis argues, in counterpoint to reports that production is on the upswing this year in the filthiest fossil’s three biggest markets: China, India, and the United States.
Just two weeks ago, BP estimated that global coal production last year fell by a record 6.5%, with most of the curtailment in China and the U.S. But in a report carried in the Calgary Herald, the Associated Press reports that in the first five months of this year, coal production among the three big producers “is up by at least 121 million tons, or 6%,” over the same period in 2016. In the U.S., it said coal mining has grown almost 20%.
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The reports seemed to confound numerous analyses in recent months that have all but written coal’s obituary, citing market preferences for cheaper, cleaner renewables and cheaper natural gas as energy sources.
Reasons for the recent turnaround, AP reports, “include policy shifts in China, changes in U.S. energy markets, and India’s continued push to provide electricity to more of its poor.” Donald Trump’s “role as coal’s booster-in-chief,” the outlet suggests, “has played at most a minor role.”
But the revival is likely to be temporary, IEEFA concludes. China has embarked on enormous investments in renewable energy. India, where many coal plants are running at less than 60% of capacity, recently cancelled 13.7 gigawatts of new coal-fired generation.
Trump’s vocal cheerleading for fossils is “an exception among the three nations’ leaders,” AP writes. “Yet the U.S. also is where coal’s rebound could be briefest.” The dispatch notes that “cheap natural gas, a growing appetite for renewable energy, and stricter pollution rules spurred utilities to shut down or announce retirements for several hundred U.S. coal plants. U.S. utilities that invested heavily in alternatives are considered unlikely to revert to coal.”
That points to a longer-term downward trend for coal production and consumption in all three big consumer nations, observed IEEFA Energy Finance Director Tim Buckley. “If you look at those three countries, everyone else is irrelevant in the scheme of things,” he said, adding that the year’s production bump is “an anomaly” that will soon reverse back into a wider global decline.
That said, he conceded, “we’re not talking about the end of coal tomorrow or the end of coal next decade. We’re talking about a 40-year transition.”
