China Has More Than 1 Billion Tons/Year of New Coal Mines in Pipeline, Report Says
China accounts for more than half of the world's pipeline of new coal mines, risking a significant increase in methane emissions, a new study published on Tuesday showed.
China is developing enough new mines to produce 1.28 billion metric tons of coal each year, said the report by U.S.-based Global Energy Monitor (GEM) which included large mines with at least 1 million tons of annual capacity as of April.
It said 35% of that capacity is already under construction, meaning a surge in production is expected in three to five years.
"Expanding coal production capacity is currently a national policy priority and a political task. State-owned enterprises, which dominate the sector, are often mandated to fulfil this objective," said GEM project manager Dorothy Mei.
China's system of long-term contracts guarantees the profitability of coal companies, Mei added.
China's existing mines have made it responsible for 70% of global coal mine methane emissions from similar sized large mines, and if all the proposed projects are completed, this would rise to 75%, the report said.
"The surge in new production starkly contrasts with China's dual carbon neutrality targets," it said.
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Dispatchable Power Remains Irreplaceable
On August 26, amidst broiling heat across the Midwest, the Midcontinent Independent System Operator (MISO) issued a maximum generation event with power demand soaring to 122 gigawatts (GW). MISO – with service territory stretching from Louisiana up through Minnesota – needed every megawatt of power it could generate and then some. MISO even needed to import eight gigawatts of power from PJM, enough to meet the demand of six million homes.
In moments of peak demand, it’s instructive to see which resources rise to the occasion. So instructive it caught the attention of the Federal Energy Regulatory Commission’s (FERC) Mark Christie who took to Twitter with analysis of what kept the lights on and what that reality should mean for the nation’s energy policy.
In MISO, coal and natural gas supplied roughly 70% of demand during the heatwave’s most intense hours. Together with nuclear power, these dispatchable resources met 90% of demand when it was needed most.
On the PJM grid next door, where demand reached 148.3 GW, dispatchable resources also met 90% of demand.
As Commissioner Mark Christie observed, highlighting the importance of dispatchable capacity, “MISO and PJM expect substantial retirements of dispatchables in coming years, and that’s before impact of EPA power plant rule, which will force many more.” He continued, “Two lessons: 1. Loss of dispatchables threatens reliability. 2. Interregional transmission supports reliability IF there is surplus power to transmit, but if neighboring grid operators lean on each other for imports, both fall down when neither has surplus power to export.”
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US Coal Industry Consolidates Amid Declining Revenues and Export Disruptions
The US coal industry is hunkering down as falling sales and revenues take an increasingly large bite out of bottom lines. The situation worsened earlier this year when the destruction of a bridge in the US East Coast port of Baltimore disrupted coal exports for a couple of months.
This event might have been the trigger for the latest merger in the struggling US coal industry between Arch Resources and CONSOL Energy Inc.
The $US5.2 billion, all-paper offer will create a company to be called Core Natural Resources—again, with no mention of coal anywhere near the letterhead.
CONSOL shareholders will own about 55% of the combined company. On a pro forma basis using 2023 data, the new company will have revenues of around $US5.7 billion and an adjusted EBITDA of approximately $US1.8 billion.
CONSOL shares were down 6% year-to-date, while Arch Resources shares were down 24%.
Earlier this year, CONSOL faced a significant threat to its operations after a catastrophic bridge collapse choked off Baltimore Harbour, curtailing shipping to the company’s export terminal a few miles away. CONSOL has focused on boosting overseas shipments in recent years amid shrinking domestic demand for coal. Baltimore’s port has since fully reopened.
The new company, Core Natural Resources, will be a leading producer and exporter of high-quality metallurgical (steelmaking) and high calorific value thermal coals.
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Report Says China, India Account for Nearly All New Coal-Fired Generation
Research from a group that tracks fossil fuel and other energy projects shows that just 15 countries, led by China and India, account for 98% of coal-fired power plants under development worldwide.
Global Energy Monitor (GEM), a San Francisco, California-based non-governmental organization, in its latest Global Coal Plant Tracker (GCPT) said China and India alone account for 86% of that total. An article posted September 3 on the Carbon Brief website, written by the GCPT research team at GEM, provided context for the report, and said the number of countries with coal-fired power in either pre-construction or construction phases has dropped to 40 this year, down from 75 countries developing projects in 2014. Carbon Brief is a UK-based website that specializes “in the science and policy of climate change.”
GEM’s GCPT catalogs coal-fired power units with 30 MW or more of generation capacity. The biannual report was first published in 2014.
The report said that despite a move away from coal-fired power in many countries, the number of new proposed coal-fueled units is outpacing the number of projects being canceled, along with the amount of generation being retired. GEM’s research showed that more than 60 GW of new coal-fired generation capacity was either proposed in revived in the first half of this year, “compared to 33.7 GW that was shelved or canceled over the same period.”
GEM on Tuesday wrote that the latest GCPT looks at “some of the most significant trends driving the continued development of coal across the 15 largest markets, drawing insight from the GCPT, as well as wider context.” The countries include China, India, Indonesia, Bangladesh and Zimbabwe, along with Vietnam, Laos, Russia, Kazakhstan, Turkey, South Africa, Pakistan, the Philippines, Kyrgyzstan, and Mongolia.
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As Coal Declines, BNSF and UP Have No Plans to Remove Capacity in Powder River Basin - Yet
With their Powder River Basin coal volumes down by more than 22% this year — and 58% below the peak of 2008 — is it time for BNSF Railway and Union Pacific to consider rationalizing capacity on their primary coal-hauling routes?
Not yet, the railroads say.
In the heart of the Wyoming coal fields, BNSF and UP share the 103-mile triple-track Joint Line, which features 21 miles of quadruple track over Logan Hill. A 50-mile stretch of the route serves eight mine complexes that produce nearly 40% of the coal the U.S. uses in electricity generation.
The Joint Line, also known as BNSF’s Orin Subdivision, handled a record 168 total loaded and empty coal trains on Nov. 30, 2008. Last month’s daily average volume: A combined 70 or so loaded and empty trains.
A Union Pacific coal train growls up Logan Hill on the four track Joint Line main in the Powder River Basin of Wyoming in October 2020.
Photo: Bill Stephens
The Joint Line, in turn, feeds BNSF and UP main lines that funnel coal to power plants as far away as Texas and the Midwest. The PRB coal boom helped fund the installation of second and third main tracks, additional passing sidings, bypass tracks, and CTC on sections of both railroads across the Midwest and Texas. Notably, the coal traffic prompted UP to add 110 miles of third main on its Overland Route between O’Fallons and Gibbon Junction, Neb.
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