Coal Deliveries to the United States
By Leslie Glustrom. From her Report, “Coal: Cheap & Abundant…Or is it?”
Coal-fired power plants provide approximately 50% of the electricity in the United States. It has often been stated that coal is “cheap and abundant” and it is assumed that it will stay that way for at least the next century. A careful analysis of existing information on coal supplies suggests that United States coal supplies are much more constrained than is widely understood. Indeed, it appears that with existing mines playing out over the next 10-20 years and future mine expansions highly uncertain, the planning horizon for building alternative power production infrastructure is likely to be much shorter than previously thought. A careful review of existing information on U.S. coal supplies demonstrates that:
1) The U.S. Energy Information Administration has repeatedly published data on coal “reserves” as though they include an assessment of economic recoverability when in actuality they did not. As a result, the often touted “200 year supply of U.S. coal” is not based on a realistic assessment of how much coal will actually be accessible.
2) The United States Geological Survey has developed a tool for assessing economic recoverability and published a series of reports showing that the amount of economically recoverable coal is a small fraction (e.g. less than 20%) of the original resource. The most recent USGS assessment of coal in the Gillette coal field of the Powder River Basin of Wyoming, the source of about 40% of U.S. coal, found that only 6% of the coal was economically accessible under the economic conditions at the time. Between 2002 and 2008, while coal costs were rising dramatically, the USGS reduced the amount of economically accessible coal in the Gillette coal field of the Powder River Basin from 23 billion tons to 10 billion tons.
3) The major mines in the Powder River Basin of Wyoming (e.g. the “Fort Knox” of U.S. coal) have less than a 20 year life span, and coal mines in other parts of the United States are also likely to be playing out in the next 20 years. Future coal mine expansions are highly uncertain as these expansions will face very serious geologic, economic, legal and transportation constraints. Importantly, the federal government owns essentially all of the coal in the western United States, and future coal mine expansions in western states will have to comply with a host of federal laws.
For more information, or to download the report, click here “Coal: Cheap & Abundant…Or Is it?”