The IEA (International Energy Agency), has just released its Medium Term Coal Market report in which it has predicted that coal will grow to rival oil as the world's largest source of energy over the next five years.
The increase in coals popularity has been driven by the falling price, in turn caused by the shale gas boom in the US. The vast quantities of cheap shale gas in the US have drastically reduced demand for coal, which has led to an excess supply in the world market and therefore a drop in price.
Related Article: Is the US Coal Industry Drawing its Last Few Breaths?
Coal has always been a popular fuel source due to its abundance and the fact that it is cheap to extract. It has accounted for nearly half of the increase in global energy demand over the past decade, and the IEA states that demand will continue to grow into the future, led by China and India.
Maria van der Hoeven, the executive director of the IEA, said that, "coal's share of the global energy mix continues to grow each year, and if no changes are made to current policies, coal will catch oil within a decade."
The IEA report states that the world will burn an extra 1.2 billion tonnes of coal per year by 2017, making a total of 4.3 billion tonnes of oil equivalent, compared with oil consumption which will be at 4.4 billion tonnes.
Van der Hoeven has suggested that without some very high carbon prices to discourage the use of coal, only cheap natural gas could impact on the growing demand for coal. "The US experience suggests that a more efficient gas market, marked by flexible pricing and fuelled by indigenous unconventional resources that are produced sustainably, can reduce coal use, carbon dioxide emissions and consumers' electricity bills, without harming energy security. Europe, China and other regions should take note."
By. James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also… More