Wednesday, December 15, 2010

Does China Face a ‘Peak Coal’ Threat?

China’s ravenous appetite for energy puts the country at risk of reaching a point of “peak coal,” when demand for coal will outstrip domestic production capacity, a growing number of experts believe. China now consumes approximately 47 percent of coal produced globally but by most estimates has just 14 percent of global coal reserves. Meanwhile, demand has risen by about 10 percent per year for the last decade, putting the country on an “unsustainable” path, according to a recent report by C.L.S.A. Asia-Pacific Markets, a Hong Kong-based brokerage firm. Coal might be abundant globally, but if China cannot substantially raise its domestic production, increasing imports enough to meet demand may be hard to accomplish in the short-term, putting the country in a potential supply bind. “I think China is the vulnerable player here — they don’t really have a lot of options,” said David Fridley, a staff scientist at the Lawrence Berkeley National Laboratory and deputy leader of the laboratory’s China Energy Group. More>