C
Captain Compassion
Guest
Oil price fuels fresh look at coal
David Winning, Beijing | January 07, 2008
http://www.theaustralian.news.com.au/story/0,25197,23014049-643,00.html
VAST coal reserves in Asia are gaining attention as major energy
consumers such as China and India grapple with the reality of oil
prices around $US100 a barrel and the risks they pose to their
economies.
Multibillion-dollar facilities that convert coal to oil are being
studied across Asia, while utilities are shelving plans to build power
plants that use natural gas or fuel oil because prices of those fuels
track the cost of crude.
Crude-oil futures on the New York Mercantile Exchange are more than 50
per cent higher than they were a year ago and are within sight of an
inflation-adjusted peak of $US102.81 a barrel set in early 1980.
"The longer oil prices stay at these levels, then the more the
incentives are going to be there for exploiting coal reserves," said
Cambridge Energy Research Associates coal expert Jim Brock.
Coal prices would have to rise nearly fivefold to match current oil
prices on a unit-of-energy basis, he said, and the difference between
the cost of the commodities "is actually widening", he said.
Sharp increases in oil prices in recent years have already encouraged
China to substitute coal for oil. Morgan Stanley said China's
oil-dependency ratio fell to 20 per cent in 2006 from 23per cent in
2002, while its reliance on coal had risen.
Asian energy consumers are attracted to coal because it is less
vulnerable than oil to the geopolitical upheaval that can cause price
volatility. Asia has a third of the world's coal reserves, which stood
at 909.06 billion metric tons at the end of 2006, according to BP
PLC's most recent statistical review of world energy. Most of Asia's
reserves are shared by three countries: China, India and Australia.
But greater coal use in Asia risks harming the region's environment,
especially in developing economies that can't afford expensive
technologies that capture greenhouse gases.
The International Energy Agency recently forecast that China would be
the main contributor to incremental emissions through 2030. Output of
greenhouse gases in India is rising faster than in almost any other
country. China and India, which account for 45 per cent of world coal
use, will account for more than four-fifths of the increase in global
consumption over the next two decades, the IEA said.
Unsettled by a rising bill for crude imports, which is only partly
mitigated by a weakening dollar, Asian energy consumers are examining
the feasibility of building coal-to-liquids (CTL) plants to make
gasoline and diesel. Creating such synthetic fuels from coal is
attractive to China because of its dependency on crude imports, which
run close to 50 per cent of its oil needs. The technology also offers
cleaner fuels than those produced from oil.
Shenhua Group Corp will this year start China's first large-scale CTL
plant, in the coal-rich region of Inner Mongolia. The plant will have
a daily output of 20,000 barrels before raising output to 100,000
barrels a day in future years.
Other CTL plants in the works involve foreign investors, such as Sasol
and Royal Dutch Shell. By 2030, the IEA said, China's non-conventional
oil supply from CTL plants will reach 750,000 barrels a day.
India also is preparing to get in on the act. Coal India, a mining
company, is in talks with several CTL-technology companies, including
Sasol, about setting up a joint venture, an executive said last month.
--
If you disagree with the theories and dogmas of Marxism or Scientific Socialism
then you are a tool of Capitalist interests. If you disagree with the theories
or dogmas of Catastrophic Anthropogenic Global Warming then you are a tool of
Capitalistic interests. Notice a pattern here? -- Captain Compassion
The object of life is not to be on the side of the majority but to
escape finding oneself in the ranks of the insane. -- Marcus Aurelius
"...the whole world, including the United States, including all that
we have known and cared for, will sink into the abyss of a new Dark
Age, made more sinister, and perhaps more protracted, by the lights
of perverted science." -- Sir Winston Churchill
Joseph R. Darancette
daranc@NOSPAMcharter.net
David Winning, Beijing | January 07, 2008
http://www.theaustralian.news.com.au/story/0,25197,23014049-643,00.html
VAST coal reserves in Asia are gaining attention as major energy
consumers such as China and India grapple with the reality of oil
prices around $US100 a barrel and the risks they pose to their
economies.
Multibillion-dollar facilities that convert coal to oil are being
studied across Asia, while utilities are shelving plans to build power
plants that use natural gas or fuel oil because prices of those fuels
track the cost of crude.
Crude-oil futures on the New York Mercantile Exchange are more than 50
per cent higher than they were a year ago and are within sight of an
inflation-adjusted peak of $US102.81 a barrel set in early 1980.
"The longer oil prices stay at these levels, then the more the
incentives are going to be there for exploiting coal reserves," said
Cambridge Energy Research Associates coal expert Jim Brock.
Coal prices would have to rise nearly fivefold to match current oil
prices on a unit-of-energy basis, he said, and the difference between
the cost of the commodities "is actually widening", he said.
Sharp increases in oil prices in recent years have already encouraged
China to substitute coal for oil. Morgan Stanley said China's
oil-dependency ratio fell to 20 per cent in 2006 from 23per cent in
2002, while its reliance on coal had risen.
Asian energy consumers are attracted to coal because it is less
vulnerable than oil to the geopolitical upheaval that can cause price
volatility. Asia has a third of the world's coal reserves, which stood
at 909.06 billion metric tons at the end of 2006, according to BP
PLC's most recent statistical review of world energy. Most of Asia's
reserves are shared by three countries: China, India and Australia.
But greater coal use in Asia risks harming the region's environment,
especially in developing economies that can't afford expensive
technologies that capture greenhouse gases.
The International Energy Agency recently forecast that China would be
the main contributor to incremental emissions through 2030. Output of
greenhouse gases in India is rising faster than in almost any other
country. China and India, which account for 45 per cent of world coal
use, will account for more than four-fifths of the increase in global
consumption over the next two decades, the IEA said.
Unsettled by a rising bill for crude imports, which is only partly
mitigated by a weakening dollar, Asian energy consumers are examining
the feasibility of building coal-to-liquids (CTL) plants to make
gasoline and diesel. Creating such synthetic fuels from coal is
attractive to China because of its dependency on crude imports, which
run close to 50 per cent of its oil needs. The technology also offers
cleaner fuels than those produced from oil.
Shenhua Group Corp will this year start China's first large-scale CTL
plant, in the coal-rich region of Inner Mongolia. The plant will have
a daily output of 20,000 barrels before raising output to 100,000
barrels a day in future years.
Other CTL plants in the works involve foreign investors, such as Sasol
and Royal Dutch Shell. By 2030, the IEA said, China's non-conventional
oil supply from CTL plants will reach 750,000 barrels a day.
India also is preparing to get in on the act. Coal India, a mining
company, is in talks with several CTL-technology companies, including
Sasol, about setting up a joint venture, an executive said last month.
--
If you disagree with the theories and dogmas of Marxism or Scientific Socialism
then you are a tool of Capitalist interests. If you disagree with the theories
or dogmas of Catastrophic Anthropogenic Global Warming then you are a tool of
Capitalistic interests. Notice a pattern here? -- Captain Compassion
The object of life is not to be on the side of the majority but to
escape finding oneself in the ranks of the insane. -- Marcus Aurelius
"...the whole world, including the United States, including all that
we have known and cared for, will sink into the abyss of a new Dark
Age, made more sinister, and perhaps more protracted, by the lights
of perverted science." -- Sir Winston Churchill
Joseph R. Darancette
daranc@NOSPAMcharter.net
