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Global Mining  

Coal Surges Around Globe, Declines in US

Despite the slow death of coal in the US, it's gaining new life around the world, especially in developing countries
 Coal booms in China, India and Europe
 
 

 

Despite a weakening presence in the US, coal is surging worldwide, with nearly 1,200 new coal plants on the drawing board, according to the World Resources Institute.

Most of the new plants will be built in China and India, accounting for 76 percent of proposed capacity, but Turkey and Russia also have big plans in the works. While natural gas comes at a higher cost in Europe, many European countries are taking advantage of lower coal prices in the US. Many developing countries including Cambodia, Guatemala and Uzbekistan, are also looking into coal to fuel economic growth.

Whether or not all of the many proposed plants will get built is somewhat unclear; it all depends on policy and market trends. The US, for instance, had plans to build 36 new coal plants—a farfetched idea now in light of the availability of cheap natural gas and new pollution rules.

The US is a different case, however. The downturn of coal production in the US has been more the result of market economics than politics, with a “flood of natural gas from new sources displacing high-cost coal in some areas,” according to the New York Times.

Although coal is experiencing a slow death in the US, it's starting to gain new life in other parts of the world. As the demand for coal declines in the US, Europe and Asia offer an outlet, where US coal exports have reached a two decade high.

“There’s no question that our supplies of coal are adequate. The question is, how do we find new markets for coal to keep the share of electricity generation strong?” said Luke Popovich with the National Mining Association. “While its use is relatively declining here, it is absolutely soaring in most other places.”

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Building just a quarter of the proposed coal plants would be equivalent to doubling the coal capacity of the US. Coal burning, accounting for about 44 percent of the world's energy-related carbon emissions, remains attractive for its low cost.

Over the next few years, global demand is expected to grow to 8.9 billion tons from 7.9 billion tons this year. By 2035, coal use is expected to increase 50 percent, according to Milton Catelin, chief executive of the World Coal Association in London. It currently represents about 30 percent of world energy—the highest share since 1969.

“If you poke your head outside of the U.S., coal-fired plants are being built left and right,” said William L. Burns, an energy analyst with Johnson Rice in New Orleans. “Coal is still the cheapest fuel source.”

 

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