Friday, February 13, 2009

U.S Coal Reserves

I've noted before that people such as David Rutledge at Caltech and the Energy Watch Group believe that economically extractible world coal reserves are enormously overstated. Rutledge believes the situation is sufficiently serious that it will ultimately limit CO2 emissions to below the IPCC scenarios.

The EWG has emphasized the enormous writedowns in recent years of coal reserves by many countries, who have been motivated to look into the matter by declining coal production.

Climate Progress notes that the United States Geological Survey have finally joined this trend. They have done a thorough analysis of a single coal field that provides 37% of U.S. coal production.

Coal reserves are the portion of the recoverable coal that can be mined, processed, and marketed at a profit at the time of the economic evaluation. With a discounted cash flow at 8 percent rate of return, the coal reserves estimate for the Gillette coalfield is 10.1 billion short tons of coal (6 percent of the original resource total) for the 6 coal beds evaluated.

In 2006 production at the Gillette coalfield was 436 million short tons or 4% of the economically extractible resource. Unsurprisingly then that the National Research Council is calling for research into the size of reserves.

It is clear that there is enough coal at current rates of production to meet anticipated needs through 2030, and probably enough for 100 years, the committee said. However, it is not possible to confirm the often-quoted assertion that there is a sufficient supply for the next 250 years.

The report recommends a federal-state-industry initiative to determine the size and characteristics of the nation's recoverable coal, with the goal of providing policymakers with a full account of these reserves within 10 years. The initiative should be led by the U.S. Geological Survey (USGS), in cooperation with the U.S. Department of Energy's Energy Information Administration, states, and industry, and will require additional funding of approximately $10 million per year.

The group Clean Energy Action has just released a pessimistic report on U.S. coal.

In an extensively resarched report using publicly available data, Clean Energy Action member Leslie Glustrom says "we were quite shocked to find that most of the coal in the United States is buried too deeply to be accessible in large quantities or at reasonable prices."

Assumptions about the cheap price of coal figure critically in utility planning decisions including the option to choose renewable energy to generate electricity.

She documents that US coal supplies are not in the 200 year range as commonly assumed, but more likely in the 50 year range. Key supporting data includes a US Geological Survey report - Open File Report 2008-1202 - indicating that only 6% (or about 10 billion tons) of the original coal resource in the Gillette Coal Field of the Powder River Basin of Wyoming is economically accessible.

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