A new Energy Outlook for the next 25 years (2016-2040) from ExxonMobil, EM, (see link) has quite a bit to say about one of the major global fuels, coal. This article discusses EM's points, and offers a few perspectives consistent with other articles here on SLB. In short, coal use will decline over the next few decades, on that both SLB and EM agree. The reasons for the decline are different. EM states countries' desire to reduce CO2 emissions, in an effort to save the planet from global warming. SLB contends there is no man-made global warming, only man-made false measurements. However, SLB contends that there is a limited supply of coal, extractable at economic prices, and that supply will be exhausted within 50 to 60 years. The time frame to coal exhaustion can be much shorter, if developing countries burn more and more coal relative to current use.
The EM statements:
"Global demand for (total) energy rises by 25 percent 2014-2040" –EM Energy Outlook 2016, p. 15.
“The most striking development in power generation is expected to be the shift away from coal – the dominant energy source in this sector – and the rise in cleaner fuels such as natural gas and renewables." (Ibid, p. 44).
"Coal provides about 30 percent of world’s electricity in 2040, vs. 40 percent in 2014." (Ibid, p. 46)
“Coal, currently the world’s second-largest fuel, is expected to see global demand peak around 2025 and then begin to decline. This decline will be led by the industrial and power generation sectors, as businesses improve energy efficiency and switch to fuels with lower CO2 emissions. By 2040, coal will account for 20 percent of global energy demand, down from about 25 percent in 2014.” (Ibid, p. 56)
Analyzing the EM statements, and numbers, it can be seen that tons of coal used for electricity increases almost 24 percent (assuming that each ton of coal has consistent heating value). This is from the EM projected increase in electricity production of 65 percent from 2014 to 2040. Yet, the EM statement on coal providing 30 percent in 2040 vs 40 percent in 2014 of the world's electricity appears to state that coal use will decline. In fact, the two statements, read together, show that coal use increases 24 percent: as 0.4 x 100 = 40, but 0.3 x 165 = 49.5; then 49.5 divided by 40 is 1.24. This is a simple calculation where 2014 electricity production is set to 100, and the 2014 production is then 65 percent greater or 165.
Yet, the EM Outlook has a far different result in the Data table on p. 72 of the Outlook, for coal use in power generation. There, the number for 2014 is about the same as for 2040: 97 Quads in 2014, and 95 Quads in 2040. (Quad is quadrillion Btus) If the Outlook were consistent, then 2040 should have 97 x 1.24 or 120 Quads.
Next, the global energy statements. Here, EM states that coal will decline from 25 percent of global energy demand in 2014, to 20 percent in 2040. However, given the projected increase in global energy demand of 25 percent, the amount of coal used remains constant. This can be seen by 0.25 x 100 = 25, while 0.2 x 125 = 25. Again, using simple values, the 100 is global energy demand in 2014, while 125 is the global energy demand in 2040.
Note, the summary Data table on p. 72 of the Outlook shows 148 Quads in 2014 vs 142 Quads in 2040 for coal world-wide. 148 is close enough to 142 for these purposes, to be essentially no change in coal use.
Where, then, is the decline? Electrical demand for coal increases, but global energy demand remains constant, per EM. Therefore, some category must have a decline in coal use. EM's Outlook has several categories for energy use, electricity, industrial, transportation, and residential plus commercial. One assumes that agriculture consumes zero energy. Coal use in transportation is close to zero, or perhaps is included in the catch-all category of "other." In any event, coal is named in electricity, industrial, and residential plus commercial categories. The residential plus commercial use is very small to begin with, and declines a bit by 2040.
The EM Outlook states that coal for industrial purposes will decrease from a bit more than 20 percent in 2014 to approximately 15 percent by 2040, while overall industrial energy grows by 30 percent. This does, then, show a decline in coal use as 0.22 x 100 = 22, while 0.15 x 130 = 19.5, again where 100 is the 2014 use and 130 is the 2040 use.
The Data table on p. 72 shows a slight decline from 46 to 44 Quads, 2014 and 2040.
Commentary by Sowell
It is important to note that ExxonMobil is an oil and gas company, primarily. They also are active in derivatives from oil such as petrochemicals and lubricating products. They have a vested interest in selling oil and derivatives, plus selling natural gas. The Energy Outlook is a convenient way to show all interested stakeholders that the future looks bright for their company, because the demand for their products remains robust. The company also has a bit of coal mining in the corporate portfolio as ExxonMobil Coal and Minerals Company. EM conducted some research over the years into coal-to-liquids plants, and coal gasification. However, it is very clear that oil and gas are more than abundant, while coal is being rapidly exhausted world-wide.
The Outlook repeatedly describes future activities as moving away from coal, to natural gas because the greenhouse gas emissions are far less. The above discussion shows where that is likely to occur, in the industrial sector. EM would be more than happy to provide the natural gas for replacing the coal.
Earlier on SLB, the stark facts of coal resources, coal consumption, were discussed. see link. In summary, there is only approximately 50 years of coal supply remaining, if the present consumption rate continues. However, developing countries are increasing their annual coal consumption in their efforts to increase electricity production.
From a power planner's perspective, a coal-fired power plant will last only 40 years, and at most 50 years. If all countries continue their coal consumption, it would make no sense to build new coal-powered plants at any time after 2025. However, the US has already passed some forms of regulation on coal (mostly by EPA edicts, not laws passed by Congress and signed by the President). These coal regulations essentially halted new coal-powered plants, and will very likely result in many coal-powered plants shutting down. In theory, that would make more coal available to other countries since it will not be burned in the US. In reality, the US would need major infrastructure to export coal overseas.
The EM Outlook discusses none of this, not delving into reserves, resources, costs of extraction, and costs of transportation of the various fuels to meet demands in different countries. Perhaps in future editions those issues will be discussed.
Roger E. Sowell, Esq.
Marina del Rey, California
copyright (c) 2016 by Roger Sowell, all rights reserved