University of Queensland researchers paint an interesting picture of the resource that is more abundant than any other fossil fuel and has the potential to last for more than 500 years. This is long after the last drop of oil and last trace of natural gas has been exhausted.
Professors Peter Knights and Michael Hood argue that a move away from coal as an energy source would be a “totally unrealistic position for Australia and for the world”.
According to University of Queensland study, Coal and the Commonwealth: The greatness of an Australian Resource, more than 80% of the world’s energy is generated by fossil fuels. Coal is the main fuel used in electricity generation, accounting for 41% of the world’s power and its use is on the rise. The resource has been the world’s fastest growing fuel each year for the past six years, the study found.
Coal resources are widely available around the world, overcoming energy security concerns often expressed about oil and gas. Australia is at an advantage due to its large reserves of high-quality thermal and coking coal, according to Knights and Hood.
Australia uses coal to fuel 81% of its electricity requirements and is the world’s largest exporter of coal. In 2008-09, the country generated $55 billion in export revenues, and currently more than one-fifth of Australia’s mineral wealth comes from coal.
Australian Coal Association executive director Ralph Hillman said the coal industry was one of Australia’s most competitive industries in terms of international trade.
“It’s important that people understand the role coal plays in the Australian economy, in creating employment, generating massive income and massive tax revenues for the Queensland and New South Wales governments and also for the federal government, and in earning foreign exchange,” he said. “It underpins the wealth of the Australian economy.”
Japan, Korea and Taiwan are the top three destinations for Australia’s thermal coal. However, China and India are expected to move up from their sixth and seventh places respectively to become major customers in the near future.
Knights said in the event the cost and availability of Australian thermal coal exports were affected by carbon taxes and environmental concerns, China would likely turn to Indonesia and Russia to supply its thermal coal needs in the southern provinces.
However, Indonesia’s and Russia’s ability to meet demand in a country that is currently building the equivalent of two new 500-megawatt coal-fuelled power stations a week is questionable, according to Knights. He said that at current production rates Indonesia’s coal reserves were likely to be depleted in 30 years, while Russia had complicated logistical issues to overcome to access its largest coal reserves, which are situated in the country’s interior.
“In the event of volatility in supply, China could revert to exploiting reserves of inferior-quality coals located in its central and southern provinces,” he said.
“This coal has inferior heat content, higher ash and sulfur content than the high-quality Australian thermal coals.
“It is therefore in the world’s best interests to continue to make low-emission Australian coal available at competitive world prices.”
The study also examined the socio-economic benefits provided by Australian coal.
“The growth of GDP per capita for Japan, Korea, India, Taiwan and China is strongly correlated to installed electricity generation capacity,” Knights said.
“Japan is dependent on coal for 26 per cent of its electrical energy needs, Korea for 38 per cent and China for 82 per cent.
“Life expectancy in these countries has increased as a function of energy consumption per capita, an example of the vital role that Australian thermal coal exports have played in elevating living standards.”
Knights argues that alternative energy sources are being sought to reduce Australia’s dependence on fossil fuels, however renewable energy sources such as wind and solar power produce energy at significantly higher life cycle costs than coal-fired power stations.
Hillman agrees, saying that if Australia were to take carbon capture and storage out of the equation it would push the country towards higher-cost options such as solar thermal and geothermal, which are not yet proven technologies in Australia, or nuclear, with the first nuclear power station still 20 years away.
“You take [carbon capture and storage] out of the equation and you are basically increasing your cost structure and limiting your options,” he said.
Hillman also argued that a move away from coal and carbon capture and storage technologies globally would not address climate change.
He said what the Copenhagen Climate Change Summit had shown was that it was clear the big coal burning countries with rapidly growing economies, such as China and India, would continue to burn coal, with or without the technology.
“If we [Australia] don’t provide them with the technology to capture the CO2 that is emitted we are not going to be able to address climate change,” Hillman said.
The Coal and the Commonwealth study concedes that renewable energy and nuclear energy will “play increasing roles in the global energy mix” but an increasing demand for energy as a result of world population growth will mean an increase in all fuels, including coal.
However, for coal to continue being used as an energy source without atmospheric pollution, more low-emissions technologies will need to be developed.
“The industry recognises that burning coal in power stations is one of the biggest contributors to global greenhouse gases and one of the biggest contributors to Australia’s greenhouse gases,” Hillman said.
“Thirty five per cent of Australia’s greenhouse gases come from power generation using black coal and Victorian and South Australian brown coal.”
Australia is working on 12 carbon capture and storage demonstration programs.
Hillman said the NSW and Queensland black coal industries had put together a $1 billion fund to develop and deploy technologies to capture the CO2 emissions from coal-fired power stations.
The Australian government has set up a global carbon capture and storage institute. It also has invested $2 billion to build commercial-scale demonstration power plants using carbon capture and storage by 2015.
Hillman said the strategic objective was to demonstrate these technologies on a commercial scale by about 2018 so that investors in the power sector could start making choices about investing in these power stations on a commercial basis into the 2020s.
“So by the time we get to 2030 we will have a range of technologies including carbon capture and storage, and other technologies such as solar thermal and geothermal that can be meeting the world’s growing energy needs, but on the basis of much, much lower emissions,” he said.
“In the case of carbon capture and storage we’re looking at reducing emissions from power stations by up to 90 per cent using these technologies.”
Coal is the main fuel used in electricity generation, currently accounting for 41% of the world’s power.
