Mohr, S. H., et al. February 1, 2015. Projection of world fossil fuels by country. Fuel volume 141: 120-135.

We model world fossil fuel production by country including unconventional sources.

Scenarios suggest coal production peaks before 2025 due to China.

Results suggest lack of fossil fuels to deliver high IPCC scenarios: A1Fl, RCP8.5
Four countries, China, USA, Canada and Australia modeled by state/province level.
Three ultimately recoverable resources applied, that range from 48.4 to 121.5 ZJ.

Abstract.   Detailed projections of world fossil fuel production including unconventional sources were created by country and fuel type to estimate possible future fossil fuel production. Four critical countries (China, USA, Canada and Australia) were examined in detail with projections made on the state/province level. Ultimately Recoverable Resources (URR) for fossil fuels were estimated for three scenarios: Low = 48.4 ZJ, Best Guess (BG) = 75.7 ZJ, High = 121.5 ZJ. The scenarios were developed using Geologic Resources Supply-Demand Model (GeRS-DeMo). The Low and Best Guess (BG) scenarios suggest that world fossil fuel production may peak before 2025 and decline rapidly thereafter. The High scenario indicates that fossil fuels may have a strong growth till 2025 followed by a plateau lasting approximately 50 years before declining. All three scenarios suggest that world coal production may peak before 2025 due to peaking Chinese production and that only natural gas could have strong growth in the future. In addition, by converting the fossil fuel projections to greenhouse gas emissions, the projections were compared to IPCC scenarios which indicated that based on current estimates of URR there are insufficient fossil fuels to deliver the higher emission IPCC scenarios A1Fl and RCP8.5.

Wang, J. September 4, 2013. Chinese coal supply and future production outlooks. Energy 60: 204-214.

[below are excerpts, go to original article above to see all of it]

ABSTRACT

China’s energy supply is dominated by coal, making projections of future coal production in China important. Recent forecasts suggest that Chinese coal production may reach a peak in 2010-2039 but with widely differing peak production levels. The estimated URR (ultimately recoverable resources) influence these projections significantly, however, widely different URR-values were used due to poor understanding of the various Chinese coal classification schemes. To mitigate these shortcomings, a comprehensive investigation of this system and an analysis of the historical evaluation of resources and reporting issues are performed. A more plausible URR is derived, which indicates that many analysts underestimate volumes available for exploitation.

Projections based on the updated URR using a modified curve fitting model indicate that Chinese coal production could peak as early as 2024 at a maximum annual production of 4.1 Gt.

By considering other potential constraints, it can be concluded that peak coal in China appears inevitable and immediate. This event can be expected to have significant impact on the Chinese economy, energy strategies and GHG (greenhouse gas) emissions reduction strategies.

INTRODUCTION

Chinese energy supplies are completely dominated by coal and in 2010, China produced 3.24 billion metric tons (Gt) of coal, constituting 76.5% of total Chinese energy production, furthermore, China consumed 3.39 Gt coal, equal to 68.0% of its energy consumption [1]. In the foreseeable future coal will remain the dominating fuel and its demand is set to increase [2,3]. Therefore, reasonable analysis of future Chinese coal production trajectories would prove helpful and necessary for national planning purposes.

An investigation of current literature indicates that the quality of URR data used by most studies is unfortunately poor. There are two main reasons. The first is poor understanding of the Chinese coal classification system due to its complexity and inconsistency with more internationally established frameworks. The second is use of available information, so that in many cases analysts choose to rely on the reported data presented by certain international institutions or energy companies, such as WEC (World Energy Council) or BP [4,6]. It is apparent that these are poor sources when we note that Chinese coal reserves have remained constant since 1992 despite rapid production increases. These problems require illumination, discussion and attention to better address the Chinese coal question and its importance.

The Chinese classification system for mineral reserves and resources is derived from the framework originally used by the FSU (Former Soviet Union). In 1954 the NMRC (National Mineral Reserve Committee of China) reprinted the Solid Mineral Reserve Classification Standards of FSU as the main reference for the Chinese classification systems. In April 1959, the first formal Chinese standard of Provisional Specifications for Mineral Reserve Classification (General Principles) was issued. Thereafter, China has made several modifications of its classification systems in June 1977, December 1992, June 1997, June 1999, August 2002, July 2009, and November 2010.

Before 1999, the Soviet and the Chinese classification systems were similar with both countries using centrally planned economic systems. As a result, the main purpose of exploration activities was to identify the quantities of mineral resources available for the central government and these systems are based primarily on geological and technological conditions, with little attention being paid to economic factors. The old framework made comparison with other countries using more market-oriented classification systems difficult.

As China reformed and developed, revision of this old system became an urgent task to better address the requirements of new economic policy. An improved foundation for exploitation of Chinese mineral resources was created and the new framework called Classification for Resources/Reserves of Solid Fuels and Mineral Commodities (GB/T 17766-1999) was adopted as a national standard in June 1999 to mitigate the shortcomings of the earlier system. The new system was based on the United Nations International Framework Classification for Reserves/Resources (ENERGY/WP.1/R.70) and Principles of a Resource/Reserve Classification for Minerals.

November 2010, when Specification for Comprehensive Exploration and Evaluation of Mineral Resources (GB/T 25283-2010) was presented as a complement to 2002 with additional guidelines for implementing the classification system of GB/T 17766-1999. Currently, GB/T 17766-1999 is the first consistent framework that evaluates Chinese coal resources based on expected economics of extraction as well as geology and technological feasibility. It divides resources into 3 major categories: reserves, basic reserves and resources: Reserves are the minable part of basic reserves on which the factors such as economic, mining, metallurgical, environmental, legal, marketing, social and governmental has been considered and corresponding modification has been made during the feasibility study, pre-feasibility study and preparation of the annual mining plan. The results demonstrate that this part is economically minable; it is expressed by actual minable tonnage or volume, from which the losses of designing and mining have been deducted. Basic Reserves are a part of total identified mineral resources, which can satisfy the index (includes grade, quality, thickness and technical conditions for mining, etc.) requirements of current mining, and is expressed in terms of tonnage or volume, in which the losses of designing and mining have not been deducted. It is located in the measured and indicated reserve extending area, in which detail exploration or general exploration and feasibility study or pre-feasibility study have been done, and the results demonstrate economic or marginal economic benefits. Resources consist of a part of the total identified mineral resources and the undiscovered resources. The former includes resources for which mining is not economically viable or technologically feasible at the time by feasibility study or prefeasibility study; the resources upon which some kinds of exploration or prospecting have been done, but for which feasibility or pre- feasibility studies have not been carried out, are also included. The latter belongs to undiscovered mineral resources, upon which only reconnaissance has been done.

In 1998 the central government abandoned the MCI and no further studies have been made since. Table 1 describes the results of the 3 Chinese coal resources/reserves assessments made by the MCI. It should be noted that all of these studies were prepared prior to 1999, utilizing the old classification systems with little attention paid to economic factors, and reporting 3 categories: coal reserves (similar to total identified mineral resources 1999), prognostic resource (similar to undiscovered resources in GB/T 17766-1999 in Fig. 1) and total coal resources (i.e. total resources in GB/T 17766-1999).

WEC and BGR have also reported estimations for total coal resources in China (Table 2), but their estimations differ significantly to the assessments made by the MCI. A possible reason for this may be that these institutes overlooked the complexity of the Chinese classification systems and its development over time, leading to misinterpretation of the available statistics. MCI (Table 1) and data from WEC and BGR (Table 2) differ significantly.

These differences illustrate the challenges faced in estimating the size of Chinese coal resources, as the availability of data and subsequent interpretation appear to be dogged by erroneous assumptions and misunderstanding.

Estimations of identified coal resources (i.e. coal reserves before 1999) are important since this category, together with annual discoveries of identified coal resources, are the only information that have always been reported to the public besides basic reserves after 2000. Estimates published by CNCA (China National Coal Association), NBSC (National Bureau of Statistics of China) and MLR (Ministry of Land and Resources of China) are reasonably consistent, except for a time lag for NBSC and minor statistical differences (Table 3), but differ when compared to MCI assessments. There are also considerable differences among reported annual discoveries (Table 4). For example, CNCA [35] reports discoveries in 1978 as 25.1 Gt, compared to only 8 Gt in the Statistical Communiqué of the People’s Republic of China on the 1978 National Economic and Social Development reported by NBSC (Table 4). In 2006, reported discoveries by NBSC is 36.7 Gt, while 122.4 Gt is claimed by MLR.

There are also inconsistencies within publications made by the MLR. The 2010 edition of the Gazette of China’s Land and Natural Resource reports discoveries of 211.5 Gt for that year. However, this value was revised to 57.51 Gt in the 2011 edition of the same report (Table 4). Adding further to the confusion, MLR also reports discoveries of 71.16 Gt for 2010 in the 2011 China Mineral Resources (Table 4). Such differences are obvious and easy to find, but no explanations are given by the MLR. In conclusion, it is hard to know the accuracy of reported data for Chinese coal as significant differences existing among, and even within, published estimates from various agencies. Furthermore, it is also challenging to connect annual discoveries to total identified coal resources.

WEC and BGR report different reserve numbers (Table 6). Most striking is the constant reserve figures reported by WEC since 1992, as more recent Chinese updates, for unclear reasons, have been excluded. However, this data is still is widely utilized and frequently surfaces in worldwide statistics. In contrast, BGR data after 2006 appears closer to Chinese figures, but still lacks annual updates.

An alternative approach to get the URR is to rely on other techniques, such as LPT (Logit-probit Transforms) and HL (Hubbert Linearization) shown in Table 7 [5,44]. These techniques have their merits, provided that the trends used are consistent. However, there are also drawbacks as described in Ref. [53]. Chinese URR appears to display a linear trend from 1970 to 2002, which then breaks down with the URR value becoming sensitive to the length of the time series used for extrapolation (Fig. 4). The LPT-technique demonstrates similar problems because the Chinese data does not show any stable trend, unlike, for instance, Pennsylvania anthracite production (Fig. 5). The use of these techniques for URR estimation appears problematic for China and will likely give URR estimates with large variations depending upon the time period used. Consequently, it is recommended that such techniques cannot be viewed as reasonable approaches for the Chinese case before production trends have stabilized.

A higher URR appears to result in a lower depletion rate, one of the reasons it appears unlikely that China, with its vast coal deposits, would reach depletion rates of the same magnitude as Japan and Belgium. Therefore, a maximum depletion rate of 5% per year is used as an upper bound in this study to avoid mathematically optimal curve fits that would give projections reaching implausibly high depletion rates.

The results of the modelling are presented in Fig. 7. The depletion rate constraint gives a flatter peak and a somewhat slower decline rate afterward. Without such a constraint, the production peak becomes sharper followed by a more rapid decline. The recommended result in this paper shows that Chinese coal production will peak around 2024 at a peak production of approximately 4.1 Gt.

For maximum depletion rates, Höök and Aleklett investigated and concluded that for American coal production the highest depletion rates were at most around 3% per year in relatively small regions, such as Pennsylvania anthracite, while most others are significantly lower [59]. This study also investigated several smaller post-peak coal producing countries, including Japan, France, Table 7 Investigation of URR estimates in the literature.

Table 8 shows that even a doubling in Chinese coal URR only delays the peak year, with or without depletion rate constraint, by 16.1 years and 13.7 years respectively. Regardless, the peak would still arrive before 2040.

There are major differences in the forecasts for Chinese coal production in published studies (Fig. 9). Peak production levels span from 2.3 to 6.1 Gt (mean value is 3.7 Gt), while corresponding peak year ranges from 2010 to 2039 (mean year is 2024).

Several reasons contribute to the diverging outcomes. The URR and the model used are the most important reasons, which we have shown in the previous section of this article (for example Section 3.3). Besides those factors, the applied time series can also affect the results. For example, both this paper and Lin and Liu use similar models with nearly identical URR values, but still reach different peak production levels, possibly due to the different length of historical production data (the historical data period used in this paper and is 1949-2010 and 1949-2006, respectively). In the end, it appears likely that Chinese coal production will reach a maximum before 2040, with expected peak year in 2024.

Energy politics, environmental concern, future demand and price trends, technological development, and social acceptance can also affect coal production. What matters is recoverability and this is a complex parameter affected by both geotechnical factors and socioeconomic parameters [59]. If future production is dependent on more factors than just geology then it is important to consider a depletion rate constraint to avoid extremely high production rates resulting from curve fits only considering the geological availability of coal. In future the following factors may also constrain the increase of coal production in China.

One factor that might negatively influence future production capabilities is water availability. Chinese coal industry is water intensive, and this holds true for coal consuming sectors like power generation and the chemical industry with Pan et al. estimating that more than half of the industrial use of water in China is by the coal sector. Significant decreases in groundwater table levels can be seen in some mining areas. For example, groundwater level has decreased from 105 m of 1952 to 71 m in 1993 in Jiaozuo coal mining area in Henan province.

China is already facing a serious problem with water resource scarcity due to rapid industrialization and urbanization. For coal mining, 71% of 96 key state-owned mines are somewhat short of water, and 40% of them suffer from serious water shortages. Chinese water resources are largely located in South China, while most coal lies in the north.

For example, Shanxi province possesses 31% of coal reserves, while only accounting for 0.3% of total water resources. Water constraints will most likely mainly affect possible annual production rates, and some studies have found that coal production will not exceed 3.8 Gt annually for this reason [66,68]. The fact that water shortages could become a major barrier for coal industry development.

Another possible limiting factor for production rates is transport capacity. Most coal mining occurs in northern and north-western China, while demand is concentrated to eastern and south-eastern regions.

About 50% of all coal is transported via railways and insufficient capacity has already become a bottleneck affecting the coal market.

Long distance transportation by highway is not practical either, effectively limiting China to railroads for domestic coal transport.

It is crucial to expand transport capacity and related infrastructure to sustain increased coal production, but this problem is often overlooked.

Land subsidence is another issue as nearly 95% of Chinese coal production originates from underground mining and every mined Mt of coal has been estimated to result in 20 hectares (49 acres) of subsiding land. Pollution of groundwater yet another problem. Xie et al. found that 2.2 billion m3 of groundwater resources are polluted annually due to coal mining. Furthermore, the volume of methane emission from coal mining in China is estimated to reach 20 billion m3 in 2008, six times that of the United States. Comprehensive discussions on mining waste disposal, landscape change and air pollution from coal mining have been made by others.

Therefore, a supply shortage can be expected due to an unforeseen peak coal event and is likely to threaten further growth of the Chinese economy.

The coming of peak coal will also affect the current energy policies or strategies that rely on the assumption of abundant URR and adequate supply of coal. To meet rapidly increasing demand for oil and gas, and relieve import pressures (since nearly 60% Chinese oil demand and about 30% of gas demand is met through imports), a strategy, with relevant policy support, of replacing oil and gas with coal has been implemented for years. In 2009, the capacity of CTL (coal to liquids) projects reached 1.6 million metric tons (Mt) and has been planned to increase further to 12 Mt by 2015 and 50 Mt by 2020. Plenty of coal resources would need to be exhausted to achieve this target because producing one barrel of liquids (i.e. about 0.136 metric ton) needs to consume 1-2 metric tons coal. Besides, China also established coal to gas projects, such as underground coal gasification and plans to expand the scale of operation over the coming years. All of these strategies or polices face a dilemma in the near future: a significant investment in infrastructure and techniques, but without the necessary coal to feed these changes. As shown in this paper, China should take more measures to replace its coal with oil, gas or other alternative energy resources.

The coming of peak coal is good news for China’s environment, especially for reduction of GHG (greenhouse gas) emissions. Climate change has been seen as the biggest environmental threat in the present and future development of human society, and anthropogenic GHG emissions, especially CO2 emissions mainly due to the usage of fossil fuels, have been considered as the dominant cause of the observed change in global climate.

A possible Chinese future coal production scenario is estimated using a modified Hubbert model, combining the previously mentioned URR and a constrained depletion rate, suggesting that Chinese coal production could reach its peak by around 2024, with a peak production of approximately 4.1 Gt. It is possible for China to increase its coal’s URR, however, peak timing proves to be insensitive to changes in URR, even with a doubling of URR, so Chinese coal production will still peak before 2040. A comprehensive conclusion for the date for peak coal in China is before 2040, with a very likely year of 2024.

Other potential constraints on Chinese coal production are also presented here and indicate that it is very difficult to increase Chinese coal production further even if coal reserves were abundant. The coming of peak coal is inevitable and immediate. Due to the importance of coal to Chinese economy, it can be expected that the coming of peak coal will threaten further growth in Chinese GDP, and energy strategies or policies based on abundant coal reserves and adequate coal supply must be adjusted as soon as possible to minimize its negative influence.