Data from the BP Statistical Review of World Energy shows global energy consumption fell by 1.1% last year, with oil and and natural gas usage down across the board.

Global coal use, however, has remained steady.  In fact, as a percentage of world primary energy usage, coal has risen to levels not seen since 1971.

On the other hand, oil’s percentage of global energy usage has fallen consistently over the past decade; from 39.00% in 1999 down to 34.77% in 2009.

As oil production becomes more difficult and expensive, coal is increasingly being employed as a source of transportation fuels.  Nations like South Africa and China have been expanding their coal-to-liquid (CTL) programs, and China reportedly has six major CTL projects under development.

CTL processes may present an alternative way to generate liquid fuel, but it comes at a price.  CTL produces nearly double the greenhouse gas emissions of conventional fuel production from oil, and many climate and environmental advocates worry that if CTL programs become more widespread the world would experience increased emissions levels.

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In the latest example of its global hunt for natural resources, China recently signed a $60 billion, 20-year coal supply contract with Australian mining company Resourcehouse.   Under the terms of the deal, which Clive Palmer, Chairman of Resourcehouse says is “Australia’s biggest ever export contract,” Resourcehouse will supply 30 million tons of coal each year for the next two decades to a unit of China Power Investement Corp., one of China’s major power producers.

Although China is rich in domestic coal resources, the energy-hungry nation has been reaching beyond its borders to secure future supplies for its rapidly industrializing population.  In December 2009, total Chinese coal imports reached a record monthly high of 16.38 million tons, jumping up 29.5% from November 2009.  Analysts say these high import levels were the result of insufficient supply in the domestic market, and are likely to remain high until March of 2010.

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China, the world’s largest emitter of greenhouse gases, is often blamed for its role in world pollution, but the giant nation has a strong appetite for alternative energy. Click thumbnail below to view short video

According to the Energy Information Agency (EIA), there were no new coal-fired power plants built in the United States during 2009.  Twenty-six new plant proposals were either defeated or scrapped due to rising concerns over high costs, pollution threats to public health, and uncertainty over the future regulation of carbon emissions, bringing total coal use down this year.

The Obama administration has implemented tougher regulations on mountain-top removal mining practices, and is increasing scrutiny on existing plants.  The administration may also place new limitations on emissions of mercury, soot and smog from coal mining and combustion.

Coal enjoyed a “rush” of new activity beginning in 2001, when more than 150 new plant proposals were announced.  Since then, it appears public favor of the resource is decreasing as pollution concerns grow.  A recent Washington Post survey discovered that nearly 2/3 of Americans approve of federal regulations to limit greenhouse gas pollution from coal plants.

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New Study Puts Price Tag on Pollution Externalities

The “hidden costs” associated with energy production in the United States are much more significant than anyone realizes, says a new report from the National Research Council (NRC).  Applying a price tag to the far-reaching side effects of energy production, such as the effect of air pollution from dirty power plants on human health, the NRC estimates that energy production cost us $120 billion in 2005.  The true figure is likely a lot higher, as the report did not include environmental damage as a result of climate change, threats to national security or the effects of certain pollutants such as mercury.

If these externalities were included into the baseline price of the energy sources we rely upon, like coal or oil, the market price would increase dramatically.  Because of this, many consumers and governments “may not realize the full impact of their choices.”  When “market failures” like this occur, the report deems that “a case can be made for government interventions – such as regulations, taxes or tradable permits – to address these external costs.”

Coal plants are the “single largest source of greenhouse gas emissions in the United States” and supply the nation with approximately half its electricity needs.  According to the NRC, total annual external damages from coal amounted to $62 billion.  These damages would add on average about 3.2 cents for every kilowatt-hour (kwH) of coal- produced energy.  The external costs from natural gas-burning plants were lower than coal-burning ones.  This resource resulted in $740 million in total annual external damages in 2005, which would amount to a 0.16 cent increase per kwh.  The life cycle damages of wind power are markedly lower than either coal or natural gas, as are nuclear power plants, concluded the NRC report.

Agency Says 100 New CCS Projects Needed by 2020

Nobuo Tanaka, the head of the International Energy Agency (IEA), says the world needs to make progress on carbon capture and storage (CCS) projects.  One hundred major projects are needed by 2020, he said at a recent CCS conference, and “thousands more” will be required by 2050 in order to help fight the effects of climate change by burying carbon dioxide emissions from fossil fuel-fired power plants underground.  Securing funding for large scale CCS projects needs to be a priority at the Copenhagen climate talks this December, Tanaka stated.  At a minimum, building the amount of CCS plants suggested by the IEA will cost $56 billion by 2020.  From 2021 to 2030, that number will skyrocket to nearly $646 billion.  CCS technology must “quickly expand in the developing world where we see the vast majority of emissions growth,” Tanaka said, echoing IEA estimates that say 65% of new CCS projects need to be built in non-OECD nations.  British Energy Secretary Ed Miliband concurred with Tanaka’s statements.  “The world’s biggest coal-using nations recognize we cannot continue with business as usual on coal.  I think we are sending a very clear signal to the Copenhagen talks that coal and carbon capture and storage need to be a very important part of the final agreement.”

Solar Power + Coal Plants = Lower Costs?

A novel project led by a Colorado solar company and Colorado’s largest electrical utility would install solar thermal technology at a coal-fired power plant to reduce the plant’s carbon emissions and “dramatically” cut the cost of solar power.  Agengoa Solar and Xcel Energy plan to install parabolic mirrors (which capture and concentrate heat from the sun) to generate steam to help drive the coal plant’s turbines and generators to make electricity.  By using already existing boilers, turbines and generators, Hank Price, director of technology at Abengoa Solar says “you only have to buy the solar field portion of the plant, which is 50-60% of the cost of the plant.”    He estimates this approach could make solar-thermal power 30-50% cheaper, and is “potentially the most cost-effective way to get significant solar power on the grid.”  Abengoa, the Spain based parent of Abengoa Solar, is working on integrating this type of solar thermal technology with natural gas-fired plants in two different projects in North Africa.