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Tuesday, December 18, 2012

Frog in pot of boiling water to turn up heat

MCMR finds that coal’s share of the global energy mix continues to rise; coal demand continues to rise globally, led by China and India; and by 2017 coal will come close to surpassing oil as the world’s top energy source.  All without meaningful progress in developing or deploying carbon capture and sequestration (CCS) or other technologies.

IEA’s notes that the United States is the exception to the rule of rising global coal demand, as coal here is being displaced by natural gas. However, while U.S. domestic coal consumption has fallen, exports of U.S. coal have risen.

IEA Executive Director Maria van der Hoeven said that “the world will burn around 1.2 billion more tonnes of coal per year by 2017 compared to today – equivalent to the current coal consumption of Russia and the United States combined.”

That works out to an additional 1.2 billion tons of CO2 emissions per year.

MCMR assumes the continued unavailability of CCS. In a significant understatement, Ms. Van der Hoeven said, “CCS technologies are not taking off as once expected.”  She offered a four-pronged approach to reducing emissions from coal use, all of which will require massive investment:

  • Deploying the most efficient coal combustion techniques;
  • Enacting a meaningful carbon price and using cheap natural gas to encourage replacement of coal by lower-emission energy sources.  In the absence of a high carbon price, only “fierce competition from low-priced gas” can effectively reduce coal demand, CO2 emissions - and consumers’ electricity bills – “without harming energy security,” Ms. van der Hoeven said.  “Europe, China and other regions should take note.”

I would add a fifth element to this approach which is perhaps implied by Ms. Van der Hoeven: using cheap natural gas to drive alternative energy development.

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