U.S. Coal: Vast, Market Ready (Part I)

“The United States has enough coal reserves to last at least another 250 years, with reserves that are over one-and-one-half times greater than our nearest competitor, Russia, and over twice that of China. [Including] … Alaska, which contains more coal reserves than all of the lower 48 states combined … the U.S. has enough coal to last 9,000 years at today’s consumption rate.”

– Testimony before the Subcommittee on Energy and Mineral Resources, Committee on Natural Resources, July 9, 2013.

Coal is the world’s most plentiful fossil fuel and is the most abundant fossil fuel produced in the United States. Over 90 percent of the coal consumed in the United States is used to generate electricity. Coal is also used as a basic industry source for making steel, cement and paper, and is used in other industries as well.

As the first concentrated energy source to be used by man, coal fueled the Industrial Revolution and lifted the burden of labor from the backs of men and animals. The Industrial Revolution was begun in England, the first nation to employ its coal resources to increase human productivity, in turn becoming the first economic and political superpower of the energy age.

For more than a century, coal served as the chief transportation energy source and fed the world’s commerce with railroads and steamships. Its transformation from an abundant but useless rock into a valuable energy source created an explosion of intellectual creativity that changed the course of human events. Currently, coal is used to meet almost 20 percent of America’s total energy demand and generate about 40 percent of all its electricity.

U.S. Supply

The United States has enough coal reserves to last at least another 250 years, with reserves that are more than one-and-one-half times greater than our nearest competitor, Russia, and over twice that of China. America’s known coal reserves, 261 billion tons, alone constitute 27 percent of the entire world’s coal reserves.

While known reserves are high, actual U.S. coal resources are much higher. “Reserves” represent coal that is readily evident as a result of ongoing mine operations, while “resources” include all those areas known to contain coal but have yet to be actually quantified by direct exposure due to the mining process. In-place U.S. coal resources (the entire estimated volume that is within the earth) total 10 trillion short tons, and would last over 9,000 years at today’s consumption levels.

Alaska is estimated to hold more coal than the entire lower 48 states. EIA estimates recoverable coal reserves in Alaska is 2.8 billion short tons, while geological estimates by the U.S. Geological Survey put the in-place figure at over 6 trillion short tons.

American coal production is currently second in the world behind China, delivering 1.016 billion short tons in 2012. (China produces over 3.8 billion short tons a year and still needs to import coal.) While coal use has slightly decreased over the last few years in the United States due to low-cost natural gas and government policies against coal use, its share of world energy consumption has increased to 30 percent in 2012, the highest since 1970.

Key Facts

Coal-related public-policy debates should keep these facts in mind.

• The federal government owns 957 billion short tons of coal in the lower 48 states, of which about 550 billion short tons—about 57 percent—are available in the Powder River Basin.
• The Powder River Basin is the largest coal-producing region in the nation, accounting for over two-fifths of all coal mined in the United States. In 2011, the Powder River Basin produced 462.6 million short tons of subbituminous coal used mainly for electricity generation.
• Federally-owned coal in the lower 48 states is worth $22.5 trillion to the U.S. economy, yet this potential remains unrealized due to government barriers on coal production.
• The United States has enough coal reserves to last at least another 250 years, with reserves that are over one-and-one-half times greater than our nearest competitor, Russia, and over twice that of China. This figure excludes Alaska, which contains more coal reserves than all of the lower 48 states combined. If total U.S. “in place” reserves are included, the U.S. has enough coal to last 9000 years at today’s consumption rate.
• U.S. exports were 17 percent higher in 2012 than in 2011, and the U.S. Energy Information Administration projects that U.S. exports will continue to supply trade partners in China, the United Kingdom, South Korea, and Brazil.
• China is constructing some coal plants that are cleaner than those allowed to be built in the United States. An irony of U.S. regulatory policy is that China may ultimately become the world’s supplier of the most advanced clean coal plants, despite the U.S. coal resource base which dwarfs China’s.
• Since 1970, the total emissions of the six criteria pollutants have declined by 68 percent, even though U.S. coal consumption has nearly doubled.

Conclusion

The United States’ vast amount of coal reserves are larger than any other country in the world. While the world is using coal for almost 30 percent of its energy consumption needs, the United States’ coal consumption was at just 18 percent of its energy demand last year.

Low natural gas prices due to hydraulic fracturing and the government’s regulatory policies concerning coal have resulted in coal losing a substantial share of the electric generation market. In order for coal producers to keep their employees in jobs, they have turned to the overseas market where coal is increasing in popularity.

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This post is taken from testimony presented today by Mary J. Hutzler of the Institute for Energy Research before the Subcommittee on Energy and Mineral Resources, Committee on Natural Resources.