The Climate III: Return of the Coal & Gas ?

Council on Pacific Affairs Exclusive – 30 DECEMBER 2021 – Nikolay N. Goryachev, CPA

Therefore, now we have come to the following conclusion. In the short term, humanity will not be able to use renewable energy sources as desired. It is possible to increase their share, but a complete transition seems unlikely.

The reason is that the energy balance is a very fragile system. In addition, the constantly growing consumption of electricity exerts serious pressure on the existing structure of its generation. The development of technology makes the devices and materials that we use in everyday life more and more energy efficient in work. However, there are more and more devices in our life. If you go to any supermarket of household appliances (whether it is online or not), there are many appliances that were almost never used in households before. Now these devices make our life more convenient. However, their production requires more and more power capacities.

We have already given an example of electric vehicles, the development of the production of which requires an increase in the generation of electricity. The COVID-19 pandemic has affected the production of many things, in fact it was stopped. Moreover, the increased demand for electronics (including in connection with remote work) has led to a shortage of electronic components. And when this deficit will end is still unclear.

         Such problems led to many consequences, including an energy deficit in the PRC. This has spurred the demand for coal. In addition, the situation that developed in the coal market in the future is interesting in itself. North American coal producers in September overtook Russian ones in terms of supplies of coking coal to China and became China’s largest source of coal. According to Chinese customs statistics, since the beginning of the year, coal exports from the United States and Canada to China have grown by 870.6% and 92%, respectively. At the same time, in September, the United States, which a year ago did not supply coking coal to China at all, came out on top among exporters, supplying 1.46 million tons and overtaking Russia (927 thousand tons). Given that this is taking place against the backdrop of an unfinished trade war, it can be called an outstanding achievement. This tells us that the role of coal in the world energy balance is very significant.

         The same thing happens with natural gas. China has an increasing demand, and thereby fueling the gas price on the spot market. In addition, given that Europe has refused long-term contracts for gas supplies from Russia, preferring market relations, it is difficult to predict the situation on the gas markets during the cold weather. Considering that in the recent past the price per cubic meter of gas in the markets has already exceeded $ 1000, it is very likely that we will see new records in the near future.

However, even in these conditions, the pressure on traditional energy sources from politicians continues. Most likely the problem is not that these are traditional energy sources, but also where they were mined… Even here these politicians are already looking for a carbon footprint. How justified is that – we will see in the near future. But even now we see that there is no unity among politicians about the fate of coal and gas. The Glasgow Climate Pact, which was supposed to usher in a new era in the fight against emissions and proclaim a coal-free state, did not go as planned. And Australia was one of those countries that questioned British Prime Minister B. Johnson’s “death knell for coal.” As a result, only agreements were reached on the phased reduction, but not the abandonment of the use of coal.

At the moment, the situation is such that in the structure of the world energy balance, the share of oil accounts for 31.2%, coal accounts for 27.2%, the share of natural gas – 24.7%, hydropower – 6.9%, renewable energy sources – 5. 7%, nuclear energy – 4.3%. Given that industrialization on a global scale continues, and developing countries need stable energy sources, it is unlikely that the share of renewable energy sources will grow in the short term enough to replace even only oil, or only gas, or only coal. Nevertheless, the use of renewable energy sources as the main (or one of the main) can be justified in small isolated communities of people – for example, on islands, or near geothermal sources – as is done in Kamchatka or Iceland.

In addition, in this case, we can assume that another point is also important. Namely, what they prefer not to talk about, focusing on climate change. Eco-bags and eco-fur coats are touching care for nature. Nevertheless, this concern does not solve a larger problem – the pollution of the planet with plastic. At its core, this threat is comparable to climate change. When we seemingly plans to stop using oil or gas, then we think about electric transport and the ban on gasoline. However, many things are being made from oil, including plastic, which surrounds us in everyday life. Yet there is no substitution of oil as a raw material for this production. However, these questions are no less difficult and deserve separate reflection on them.

Formally, throughout its history, humanity has already faced a shortage of energy resources – just not so large-scale. You can also recall the famous “year without summer” – 1816, “eighteen hundred and froze to death”. We cannot deny the changes taking place on the planet, but we are also unable to solve them at once – with one stroke of the pen. It is obvious that humanity has a long and hard work to achieve in the future. And, perhaps, each of us will have to participate in this.  


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