Cambridge: Cambridge University Press, 2015. xx, 702 pp. (Boxes, figures, tables.) US$155.00, cloth. ISBN 978-1-107-09242-6.
This book assembles a dozen authors from around the globe, under the editorial hands of Mark Thurber and Richard Morse from Stanford University’s Program on Energy and Sustainable Development. It largely succeeds in its ambitious goal of providing a comprehensive overview of the evolution of the global coal industry and global coal trade, summarising the evolution of coal demand and supply in recent decades. It also highlights the essential contradiction inherent in coal use: coal will continue to be needed to meet the energy needs of rapidly expanding developing economies, chiefly in Asia. But such use seems incompatible with achieving climate goals, at least in the absence of large-scale deployment of mitigation technologies, whose prospects for commercialisation continue to recede.
The book focusses on steam or thermal coal, and unlike many previous publications on coal markets, has a very strong Asian focus, as the clear centre of emerging demand, given Organization for Economic Co-operation and Development (OECD) coal demand is only just over one quarter of global coal use and declining. The two editors provide a concise overview of the recent evolution of coal markets, the rapid rise in Asian coal use, notably in China but also India, and the sharp increase in global coal trade. Informative and readable chapters chronicle the rise of coal production, export and use in China, India, South Africa, Australia, and Indonesia, now the world’s largest thermal coal exporter by a very large margin. These chapters highlight the challenges that each country has faced in expanding coal output, with emphasis on policy issues and how different countries have dealt with them (in some cases, work still in progress). The chapter on India, analysing the causes and implications of the (until recently) sharply slowing growth in coal production, provides a strong contrast with the chapters on China, which demonstrate how that country has successfully expanded output over the last three decades. The factors underpinning the acceleration of Indonesian exports are succinctly explained, with clear pointers to future production and export profiles, as Indonesia’s economy expands, and its own energy needs inevitably rise.
These country chapters set the scene for an informed discussion of key factors in world coal trade, with the dramatic and apparently paradoxical rise of China’s coal imports placed in a clear perspective, and the difficulties of expanding American coal exports neatly explained. This section concludes with an impressive effort to model world coal trade, with a strong summary of key results that, despite the turmoil in energy markets in 2014 and 2015, highlights important future directions. Further efforts in this area will need to be informed by updated data on capital and operating costs.
The final section overviews new coal technologies, including the fast emerging Australian liquefied natural gas (LNG) expansions based on coal bed methane, the much less mature and more complex underground coal gasification technologies, and the group of mitigation technologies, collectively known as carbon capture and storage (CCS). The latter discussion does not shy away from the problems of high cost, efficiency penalties, and generally slow progress, contrasting hope with reality. The potential role of China in CCS deployment is discussed separately, with key issues, such as additional strains on the coal supply chain and the difficulties of obtaining finance, either domestic or international, treated realistically.
A fine, succinct concluding chapter by the editors highlights the central dilemma of coal: the need for expanded coal use in some major developing countries because of its availability and price, but the obvious point that unmitigated coal use is incompatible with climate change goals, as reiterated and intensified at COP 21 in Paris at the end of 2015.
Any book on coal markets, written as this one was largely by the start of 2015, is likely to suffer from the changes wrought by dynamic energy markets, from which coal has not been immune. The slowdown and structural changes in the Chinese economy seen from mid-2014 have sharply changed coal use and trade patterns globally, and rapid diversification of that country’s power sector will further impact coal demand. As of the end of 2015, it appears that India has rapidly emerged as the largest thermal coal importer, but its efforts to boost its own coal production and diversify its power sources make it the wild card in global coal trade, as the authors clearly point out. Environmental policies, including those promised at COP 21, will inevitably slow coal use from the rapid growth rates seen since 2000. But given the recent and ongoing investments in coal-fired power plants, coal seems likely to remain the backbone of power production in those countries and others in Asia for some time.
The Global Coal Market offers a comprehensive, balanced and accessible treatment of these important developments, of use to anyone interested in the economic and environmental issues around coal.
Ian Cronshaw
Australian National University, Canberra, Australia
pp. 105-107