Coal exports are a growth industry for Australia. A lot is being invested in infrastructure for coal production and transport to keep this growth going. But how long will this bonanza last? After all, there is only a finite amount of the stuff in the ground.

When will Australia’s coal run out?

The chapter on coal included the following observation about black coal:. At the rate of production of around Mt [mega-tonnes] per year the EDR are adequate to support about 90 years of production. The authors of the report do not understand exponential growth! In other words, to come up with the 90 year figure they are assuming that production levels do not grow at all for the next 90 years.

A quick look at coal production over almost 50 years would indicate that it is far from a reasonable assumption. Annual Growth in Australian Coal Production So, where does the 90 year figure come from? According to the ABARE report, Economic Demonstrated Resources are Add to this another 8. Presumably the ABARE authors are allowing for the possibility that over time it will become economically feasible to mine some of the coal that is currently classified as sub-economic.

But there is no way that production rates will be kept steady for the next 90 years. Apart from anything else, there are plenty of stakeholders in the coal industry doing their best right now to see their export business grow. To come up with a better estimate of how long the coal might last, rather than assuming zero production growth, I will assume a constant growth rate.

The last 5 years have seen growth average only 3. Working with the ABARE estimate that viable coal reserves are 90 times production levels and assuming 3. That is less than half the 90 year figure in the ABARE report and it starts to seem like an awfully short period of time.

Since the working life of coal-fired power stations is typically around 40 years, this means any new power stations built today would still work out their useful life, but they could be the last ones we build and extract the full value of their potential productivity. Of course, if the growth rate is higher, the time to deplete the reserves will be lower, as is illustrated in the table below.

Optimists may counter that the ABARE estimates of the available reserves might be far too conservative. Perhaps there are coal fields out there just waiting to be discovered. Running the figures again assuming reserves total times production levels still means that with 3.

Now it may be the case that climate change will trigger disasters on such as scale that in 40 years time we are not too worried about coal production, nevertheless, these basic calculations mean that some or all of the following must be true. If we are going to stretch coal supplies beyond 40 years, what can slow down the need for production?

With a price on carbon not looking likely to slow Australian energy consumption in the near future, one possibility would be to reduce the share of coal production that is exported and keep more of it for our own energy needs. After all, the export share has been growing quite rapidly.

Energy and the Human Journey: Where We Have Been; Where We Can Go

Share of Australian coal production exported But who would dare suggest slowing export growth? ABARE note that the production figures in this data set look a little lower than the Mt figure quoted in the report, this is because the chart shows saleable coal which is lower than total coal extracted. Thanks to paulwallbank for pointing it out! Was it new coal fired power stations or were some mines decommissioned?

The explanation is more mundane: Thanks for bringing that to my attention. Fortunately, the primary argument is not affected. Still, assuming that new finds will double current reserve estimates seems generous to me, but a 3. The bright side of consuming all the fossil fuels and over the next 30 years or so and returning to the atmosphere all that carbon that has been locked up for millions of years is that we will not need to debate for much longer if there are flaws in the climate models.

We can see for ourselves! What a shocking suggestion, surely exporting carbon is our reward for using energy saving light bulbs and lots of pink batts. I recall hearing on fairly regular basis the claim that Australia has several hundred years worth of coal. I wonder if that figure was some division of known resources by current domestic consumption. If there really is only 40 odd years supply then we might have to go back to trying to be a clever country an idea that last went out of fashion about 8 years ago.

By the way, thanks for the interesting diversion, mule. I spent a pleasant hour reading up on the and 70s travails of the NSW power system and an abbreviated history of the SECV while trying to figure out what happened in As far as I know there is no law of nature that requires a country to dig up its natural resources at the rate desired by resource mining companies.

All the talk about mining and how that requires XYZ policy response retraining the work force with hard hats and big trucks, skilled migration increases, massive investment in mining related infrastructure etc assumes that it not legitimate to manage the size of the mining industry both to increase its longevity and to limit the distortions on the overall economy.

Good comments above so let me add three perhaps related items: Which is what happened. Extreme mineral wealth makes countries intellectually lazy and politically torpid. It discourages investment in intellectual resources and encourages cultural conservatism. At this rate the only two things Australia will soon be exporting are minerals and bright, young people. Very, very interesting post. And the same applies to aNonZebra well, not so sure about the bright-young-people bit: Have a look at this Dutch disease entry tips for intraday trading dos and donts Wikipedia: Just productive strategy in binary options 60 sec or curiosity: Say, countries like Venezuela or Ecuador?

Or places like Argentina, that lived on a single export product a renewable one, in this case? Read your rant Paul W…very good. Marco, you should read it too, it even has a reference to the Dutch disease! The crust of the earth has effectively unlimited amounts of coal, iron ore etc for our purposes. As the price of the commodity rises, other deposits will become economic to extract and will be added to reserves ie reserve life is a function of the prevailing market price. A higher price will also stimulate further exploration and discovery of new deposits.

A higher coal price will also increase the incentive to discover new sources of power. Engine trouble A rise in the cost of extracting energy will hit productivity http: Analysis by Tim Morgan at Tullett Prebon, a broker, estimates that oil discovered in the s delivered around 30 units of energy for every unit invested.

By itself this was well down on the returns from oil discovered in the s, which were nearer to Current oil and gas finds, such as undersea reserves, may offer a return between to-1 and to The return on sources such as tar sands and biofuels like ethanol are in the single digits.

Maybe the coal will run out before we stuff the planet with greenhouse gases, and possibly before Mista Rabbott even figures out what climate change is…. And why are we happy to sell yellowcake all over the world, but not to have a nuclear power is it true about binary options gambling in Oz?

What thinks the Mule? How much money does coal make for the australian economy seem to recall an article a few years ago I think it was in Nature which had back of the envelope estimates for the energy production capacity of a wide range of alternatives to fossil fuels.

For example, for solar they estimated the total radiant solar energy hitting the earth and assumed that in an ideal world we could catch a certain fraction of it. Likewise, they estimated total nuclear reserves and so for for geothermal, etc. Their conclusion was that no one or two alternatives would be enough to replace fossil fuels: This is a rather more slip-shod approach than your usual, Mule.

Are not the historical figures for EDR estimates available somewhere? Surely then you could plot that time-series and use it to estimate how quickly additional coal reserves are discovered.

Or would you have us believe that the EDR estimate has been unchanged since ? Time to hunt for some more data to get a better idea one way or the other…. One point earn money by liberty reserve is missed in your estimate for demand for Aussie coal is how much is left in the rest of the world.

The facts on Australian coal production

Looks like an argument to buy a long-dated straddle on Aussie coal price! Heed a good advice: And I mean from the Rio Grande river all the way down to Tierra del Fuego.

A shame really, as most people are friendly enough and some places are rather nice. I wonder if people have some idea what such a shift in the economic base of a country implies.

Will each and everyone of us get a job driving a humongous truck? And when businesses go belly up, will they pay wages?

And when their employees go unemployed, who will pay taxes? Oh boy, oh boy! In those places, only a minority actually work in the oil industry. The remaining are lucky if they somehow get something directly related to the oil industry.

Otherwise, there is little else to do. So, you find people obscenely rich who made each and every cent of that fortune out of government jse forex rates. Their whole remit is to decode reserve hype: Great article, thanks for posting.

How much longer can this growth industry invest in infrastructure before the black stuff runs out?

Australian coal industry in final stage of grief

The first graph there shows employment by broad sector and mining, albeit with a slight recent uptick, shows the industry is a minor employer. A good starting point may be to stop referring to it as the mining boom as that tends to imply that it is unquestioningly a good thing.

How are the Iron Ore reserves holding up?

Or is that another misconception? Those are striking numbers. Valhalla in Victoria and Hill End in NSW are two that immediately spring to mind. Stubborn — a few belated observations: Nuclear has not been econimically viable since — hence our penchant for exporting yellow-cake rather than using it.

Vietnam has quadrupled its installed generating capacity in the past decade! Yesterdays effective canning of the NWS Solar Panel industry has revealed the political tokenism of this scheme in the first place! I looked at seafood stock where to buy historical production data for compared to and and production was 5.

That means the EDR figure in the ABARE report is how much money does coal make for the australian economy production, so all looks pretty consistent! This is makes your argument far more convincing. In fact, it reinforces your argument by suggesting there have been only marginal additions to EDR over the 25 years.

But I still think there should be a fourth bullet point in your list of alternative truths, namely that identified coal deposits could grow. Between andcoal prices fell quite steadily in real terms see http: The more recent price rises since would not have had time to stimulate exploration that might elevate the EDR numbers.

If prices continue to rise, it would be surprising indeed if EDR remained as flat as it has while prices fell. That is, unless you believe that all of the coal in Australia had already been discovered in Some would see doubling to be a significant increase, but the inexorable logic of exponential growth shows that if production grows at 3. As for oil, the estimated Australian resources have grown significantly in recent years.

If you have a look at these ABARE charts the difference in the EDR trajectory is striking. Oil and uranium may be a little more erratic in their distribution.

If that is the case and I certainly could be wrong hereit would be reasonable to see less volatility in EDR for coal than for other resources. So far, history is consistent with that thesis, but that could of course be an artifact that will change in the future. Lastly, your oil example in fact illustrates my chief concern very well.

If the reserves grow more slowly than production, that figure will be overstated, if they grow faster it will be understated. Coal reserves will grow, only doubling the current reserves is very conservative, there are many coal fields yet to be discovered and many reserve increases at current fields yet to be done. Also you could easily double the price of coal and have 3 times as much coal become available that is other wise uneconomical. While you say it would be easy to increase the coal reserves through new discoveries, the chart in this paper about a third of the way down showing the history of black coal EDR and after increasing from tothe estimated reserves have in fact been falling since then.

Gday, This report is more recent http: What are your thoughts on the useful life of coal today Stubborn? It will be interesting to see if that growth rate is sustained.

Australian Coal Industry and Climate Change

Thanks for the link! Why on Earth would we want to get away from coal? We have well-established coal-fired power stations with good pollution controls that can in any case be improved further if necessary.

These deliver large quantities of relatively cheap energy to Australian households and businesses. The global climate has not warmed for 16 years, in spite of ever-increasing atmospheric CO2, and has now reached the point where the computer climate models have been invalidated as per NOAA State of the Climate reportso there is no climate-related reason for not using coal. Superconductor electricity generation will extend the coal reserves by at least two hundred years.

Notify me of followup comments via e-mail. Notify me of follow-up comments by email. Notify me of new posts by email. Generate your own Risk Characterization Theatre. Get smart with the Thesis WordPress Theme from DIYthemes. Stubborn Mule Obstinately objective. Any thoughts on undiscovered resources? Excellent — sounds like we should be worrying about peak coal almost as much as peak oil.

I enjoyed your rant — I had similar thoughts when reading that RBA speech. Nothing like an early morning rant! Stubborn Very, very interesting post. Maybe when the kids are older!

Stubborn, Heed a good advice: By the way, I also agree with Paul Wallbank. That post in Business Tech Talk was pretty good. And then people wonder why those countries totally suck. Great article and analysis. Who wants to oppose to a boom? Some alternatives; Mining bubble Mining tsunami Mining growth-shock Mining time bomb How are the Iron Ore reserves holding up?

Paul, Those are striking numbers. In any case, we need to get away from coal whether the stuff runs out or not. Mr Mule — It seems that you were paddling just ahead of the wave on this issue.

Anyway, we will move past coal long before production peaks from supply problems. We are still using primitive electricity generation methods. Generate your own Risk Characterization Theatre Next post: Click here to subscribe to receive new Mule posts via email.

I hit a lot of dead links trying to follow the pointers above. And Firefox refuses to open some of them as untrustworthy Bloody big word for a long-winded idiot! I see where he got it now. And when do we think Auxit might happen? Not quite sure what to make of the glee with which the EU council met today, excluding GB from the meeting, and how fast they I am currently in the North of England and I will unequivocally say that xenophobia at best or racism at worst drove this Search the Mule Most Popular Posts The Future of MicrobloggingOlympic Medal Count by Population and GDPLeft, Right and Climate ChangeLove is Old-Fashioned, Sex Less SoAustralian Property PricesI Hate Personality TestsAmazon.

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