Publication: Medium-Term Coal Market Report 2012 --Market Trends and Projections to 2017 by IEA on 17 Dec 2012

IEA Predicts Coal to Nearly Overtake Oil as Top Energy Source by 2017

17 December 2012: The International Energy Agency’s (IEA) newly released Medium-Term Coal Market Report (MCMR) predicts that coal will come close to overtaking oil as the world’s top energy source by 2017. The report expects rising coal use in every region of the world, except the United States, where cheap and abundant shale gas is displacing coal.

The report forecasts additional coal consumption equal to the United States’ and Russia’s current combined consumption of 1.2 billion tonnes per year for a total of 4.32 billion tonnes of oil equivalent (btoe), nearly equal to oil’s predicted 4.40 btoe. According to the report, China and India will be responsible for most of the increase, with India passing the United States to become the second largest consumer of coal. China, in the report’s Base Case Scenario, will account for over half of global coal consumption by 2014. Even in an alternative scenario, the Chinese Slowdown Case, where China’s GDP growth slows to 4.6%, the country’s coal consumption continues to grow.

IEA Executive Director, Maria van der Hoeven, pointed out the consequences of rising coal consumption in combination with the lack of carbon capture and sequestration (CCS) technologies, stating, “CCS technologies are not taking off as once expected, which means CO2 emissions will keep growing substantially. Without progress in CCS, and if other countries cannot replicate the US experience and reduce coal demand, coal faces the risk of a potential climate policy backlash.”

The IEA finds the coal-to-gas shift in the United States has led to a gas-to-coal shift in Europe, as coal suppliers in the United States increased exports across the Atlantic. By 2017, however, the report foresees European natural gas consumption to recover to its prior levels by 2017, even while gas consumption remains elevated in the United States.

The MCMR is part of the IEA’s medium-term market report series. Other editions focus on renewable energy, natural gas and oil, which together complement IEA’s longer-term World Energy Outlook. [IEA Press Release] [Publication: Executive Summary of the MCMR 2012] [IISD RS Story on IEA Medium-Term Renewable Energy Market Report] [IISD RS Story on IEAWorld Energy Outlook]

Link to the Executive summary of the MCMR 2012:

http://www.iea.org/Textbase/npsum/MTCoalMR2012SUM.pdf

Link to the full IEA Press Release:
http://www.iea.org/newsroomandevents/pressreleases/2012/december/name,34441,en.html

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MCMR is for sale at IEA bookshop. 

Medium-Term Coal Market Report 2012 --Market Trends and Projections to 2017, 148 pages, ISBN 978-92-64-17795-6, paper €100, PDF €80 (2012)

Type: Studies
Subject: Coal ; Energy Projections ; Energy Security

The Medium-Term Coal Market Report 2012 provides IEA forecasts on coal markets for the coming five years as well as an in-depth analysis of recent developments in global coal demand, supply and trade. The annual report shows that while coal continues to be a growing source of primary energy worldwide, its future is increasingly linked to non-OECD countries, particularly China and India, and to the rise of natural gas.

The international coal market is experiencing dynamic changes. In 2011, China alone accounted for more than three-quarters of incremental coal production, while domestic consumption was more than three times that of global trade. Low gas prices associated with the shale gas revolution caused a marked decrease in coal use in the United States, the world’s second-largest consumer. This led US thermal coal producers to seek other markets, which resulted in an oversupply of coal in Europe and a significant gas-to-coal switch. Meanwhile, China overtook Japan as the largest importer of coal, and Indonesia overtook Australia as the world’s largest exporter on a tonnage basis.

The report examines the pronounced role the Chinese and Indian economies will exert on the international coal trade through 2017. In the report’s Base Case Scenario, China accounts for over half of global consumption from 2014, and India surpasses the United States as the world’s second-largest consumer of coal in 2017. The report also offers a Chinese Slowdown Case, a hypothetical scenario which shows that even if Chinese GDP growth slowed to 4.6% average over the period, the country’s coal consumption would continue to grow.

Link to IEA bookshop: http://www.iea.org/W/bookshop/b.aspx