While the use of coal as an energy source may be on the decline in the United States, Canada, and other parts of the Western World, it's growing like gangbusters in Asia.
If you aren't careful, geographically-biased news will blind you to one of the biggest developments underway in the energy sector, because news coverage in the Americas and Europe virtually ignore what's happening in the rest of the world with regards to energy production and use. In Western news, shale, wind, and solar get all the attention from the press. Meanwhile, the media ignores what is really happening in the global market right now.
Coal is becoming a relic of the past in the developed world — that much we all know. Solar and wind power are rapidly growing, and we shouldn't ignore their potential.
Think of it this way: The countries that are leading natural gas and renewable energy production pretty much have 100-percent market saturation for electricity. You just can't find many buildings in the U.S., Canada, or Western Europe without electricity. Meanwhile, there are 1.3 billion people in other parts of the world who don't have electricity in their homes. And still more billions of people are rapidly consuming more and more power, driving up per capita energy use. This is especially true in Asia, where China and India need to ramp up power generation as quickly as possible to prevent widespread blackouts that will hinder economic growth.
According to the Energy Information Administration, the U.S. is going to see domestic coal consumption drop about 14 percent by 2017 as government intervention makes coal power prohibitively expensive compared to natural gas.
On the other side of the Pacific, however, China is going to build 160 new coal-fired power plants, and India will build 46 within the next four years.
The developing world is going to drive growth that will catapult coal to the number one world fuel source within seven years, surpassing oil for the first time since the 1960s. Ninety percent of the worldwide increase in coal demand will come from China and India, and 77 percent will be from China alone.
China is the world's largest producer of coal. It mined 46 percent of the world's coal last year. At the same time, China imported about 223 million tonnes of coal — which represents 20 percent of the coal it burned and a 78 percent year-over-year increase. By 2016, Chinese imports are projected to reach as high as 450 million tonnes, averaging out to 50 percent year-to-year growth in a very short time frame.
A lot of the coal needed to feed Chinese and Indian demand will come from Australia and Mongolia. However, U.S. and Canadian coal exports will be competing for sales.
In particular, coal mining operations on the western side of the North America, especially from British Columbia and Wyoming, will be shipping more and more coal overseas.
