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Coal is second only to oil when it comes to producing the world’s energy. A changing economy has created a black gold rush, as the world’s most populated nations of China and India continue to power their countries with coal.
By Ethan Ribalkin – Exclusive to Coal Investing News
A changing economy has created a black gold rush as the world’s most populated nations of China and India continue to power their countries with coal.
More than 50 percent of India’s electricity plants are powered by coal. India alone produced 526.16 million tonnes of coal in 2009 and 2010 – an increase of 6.78 percent in only one year, according to steelguru.com. This is simply an ongoing progression that will continue to grow, according to the Ministry of Coal within the Government of India.
Coal accounts for 55 percent of the country’s energy consumption. In the last four decades, commercial primary energy consumption in India has grown by about 700 percent. Meanwhile, the population and economy of India continues to rise, increasing the demand for coal.
While the Government of India estimates its coal reserves around 246 billion tonnes, of which approximately 92 billion tonnes are proven, without an ability to harvest all their black gold, India requires collaboration with other nations to meet its growing demand.
In a press release, the Minister of State for Coal, Shri Sriprakash Jaiswal, stated that the coal demand in India is estimated at 656.31 million tonnes. He added that the indigenous coal availability is at a short fall at 572.37 million tonnes – a gap that is expected to be met through import.
Currently, India collaborates with 14 nations to meet its growing demand, which is up 24 percent this past year, according to steelguru.com. This includes Russia, Canada, South Africa, Mozambique and its energy hungry neighbor China.
Now leading as the world’s largest energy consumer, China will likely become a more dominant player in coal production and consumption, but this is not without its challenges. According to the Chinese Government’s Official Web Portal, the country is implementing a “Green Strategy” that includes increasing resource-use efficiency and reducing pollution costs – a goal that is being met not by burning less coal, but through electricity cuts. The Guardian reports that certain regions in China have been cutting power to homes, factories and public buildings for upwards of 22 hours every three days. This move comes in the wake of China’s goal to achieve the state’s efficiency targets, which are to lower emissions by 20 per cent.
According to the Coal Association of Canada (CAC), China and India are not the only nations reliant on coal for energy. Coal is second only to oil when it comes to producing the world’s energy. Approximately 70 percent of the world’s coal production powers 40 percent of the world’s electricity, with 12 percent used to produce 70 percent of the world’s steel and 18 percent used for both industrial and domestic purposes.
The CAC website states that Poland, South Africa and Australia derive over 80 percent of their electricity from coal, while the United States relies on coal for 56 percent and Canada for 18 percent of electricity production.
The World Coal Institute (WCI) echoes the CAC’s statistics, claiming that the use of coal will rise by 60 percent over the next 20 years and the world supply will last for at least 119 more years.
The result of China taking over the former U.S. title as the world’s heaviest consumer, combined with an increased use for coal the world over, has triggered a change in the world market for energy – and savvy investors and economists are beginning to take notice.
Even Santa himself may consider selling his black gold and stuffing stockings with stones.