In Europe, which cannot seem to win a trick these days, coal prices have been rising modestly despite the region’s claim to anti-coal credentials, a reason to sing louder.

The Indian supply shortfall and the European price rise, which has been linked to a plan to embargo oil exports from Iran, are just two of a number of reasons why coal is heading into a boom, not the bust predicted by environmentalists and their captive governments.

More on the supply/demand fundamentals later but first a suggestion from The Hog that what the world is witnessing with coal is one of the more remarkable examples of the gap between what people want and want governments think they deserve.

To explain, because it is a little early in the new year for such a deep concept, coal has become the meat sandwiched between the demands of environmentalists/governments and the reality of people wanting to turn the lights on at night.

What appears to be happening is an almighty disconnection has occurred, which is very much working in favour of the coal industry because “people power” will eventually override the edicts of government.

The official view of the world is coal must be replaced by fuels with a lower carbon footprint, preferably no footprint at all.

That means switching to renewables such as wind and solar, or natural gas as a halfway house.

The reality is renewables are not performing as promised and gas is struggling to meet demand, which is occurring as some governments force the closure of old coal-burning power plants and some governments force the mothballing of nuclear power plants.

Meanwhile, in fast-growing countries such as India and China, electricity demand is soaring as people there demand a western lifestyle with all the creature comforts that go with it, including air-conditioning, washing machines and refrigerators.

As the world enters 2012, there are signs emerging of a head-on collision between the popular view in governments (where people are well paid and already have the creature comforts) and life in the struggling cities of Asia where demand for electricity is high – and rising.

The European problem is most obvious in Germany where many of the country’s nuclear power stations are earmarked for closure despite no sustainable plan for replacing their electricity contribution.

It is a plan doomed to fail.

A glimpse of the failing Euro plan came in the first few days of January, with coal prices ticking up a notch in fear of an oil shortfall, or worse, should an embargo of Iranian oil be introduced.

Both the US and Europe have agreed in principle to an Iranian oil ban with the only missing decision being a date for the start and when it is announced, the Iranians have threatened to retaliate with a military blockade of the Straits of Hormuz at the eastern end of the Persian Gulf, through which flows an estimated 20% of the world’s oil.

No prize for guessing a stand-off in the Gulf would have global consequences, such as slower economic growth and a rush to find replacements for the missing oil – and that means higher demand for coal.

In India, the situation is different but the result the same because it is a country that has put too much faith in the development of a nuclear power industry, which has suffered repeated construction delays and which is now facing country-wide blackouts.

Despite being the world’s fifth biggest producer of electricity, the reach of the government-controlled power system is appalling, with an estimated 300 million people still lacking access to electricity despite a government promise made a decade ago that everyone would have access by mid-2012.

Pressure is growing on the government of India to revitalise its crumbling power generation industry and deliver on its power supply promise and it must start with the delivery of more coal to power stations, building more coal-fired power stations and importing more coal from countries such as Australia and Indonesia.

India, however, is just one example of people demanding greater access to electricity and governments being exposed as having placed too much faith in promises of alternatives to coal being just around the corner.

They’re not and will probably not emerge for decades, if at all.