Coal, China, Heinberg, Growth, Truth, wow….

This is a guest post on TheOilDrum from Richard Heinberg. It says, far more eloquently, what I’ve been saying for years.

The post was originally published by the Post Carbon Institute.

Here are a few excerpts:

“Most of this conventional wisdom is correct, but some of it is plain wrong—so wrong, in fact, that environment-, economic-, and energy-policy wonks are constructing scenarios for the future of U.S. and world energy, and for the global economy, that bear little or no resemblance to the reality that is unfolding.”

“Let’s see if we can sort what’s right from what’s not, and see also if doing so can help us paint a more accurate picture of where China, and the rest of the world, are actually headed. China’s coal output grew an astonishing 28.1 percent from first quarter 2009 to first quarter 2010, to over 750 million metric tons consumed in just the past three months.”

“Start with the stats and do some simple math. China is now mining and burning over three billion tons of coal per year. If the nation’s coal consumption grows at, say, seven percent per year, that means consumption will double in ten years (its annual growth rate was actually over nine percent in one or two of the last several years, implying a doubling every eight years—but let’s be conservative and assume seven percent growth). In that case, by 2020 China would be using about six billion tons per annum.”

“Combine unprecedented consumption levels with furious growth rates and you quickly arrive at absurdities and impossibilities. As in, it won’t happen. The wheels will fall off the wagon first.”

It takes infrastructure to mine and use coal. Rails and rail wagons, plus trucks and roads, are needed to move coal from mines to power plants.  China is building all of these at a frenetic pace—but the relentless math of exponential growth is starting to hit home.”

“According to the World Coal Institute, China has reserves totaling a little over 110 billion tons. That’s almost 37 years’ worth of coal at current rates of consumption (i.e., three billion tons per year). But to assume that China won’t have coal supply problems until 37 years have passed is also to assume two absurdities: that Chinese demand, production, and consumption of coal will remain constant; and that after maintaining this steady rate of extraction and consumption for 37 years, China will one day suddenly discover that its coal has run out.”

“In the real world, China’s demand for coal is expected to grow. Adding ten percent annual consumption growth to the forecast would yield a reserves lifetime of only 16 years. While a sustained rate of growth this high is extremely unlikely, the principle is worth keeping in mind.”

“A bursting of China’s property bubble could collapse the nation’s economy quickly and soon. But it is essentially a problem of money, and money is a creation of the human mind. Currencies can be reformed; banking systems can be reorganized. Such things are painful and take time, but they are certainly possible—and historic examples are numerous.”

“Energy is different. Without energy, nothing happens. Transport systems stall; building construction and manufacturing cease. The lights go out. You can’t make energy out of nothing and you can’t call it into existence with computer keystrokes, as bankers can do with money. Generating electrical power requires physical resources, infrastructure, and labor. And so there are natural limits to how much energy we can summon for our human purposes at any given time.”

“China has become a great manufacturing powerhouse largely because it was able to grow its energy supply quickly and cheaply. And so China’s contribution to the world economy is to this extent a function of China’s contribution to world energy. One significant gauge of this link is the fact that Chinese coal production represents more than double the amount of energy contributed to the world economy as compared to Saudi Arabia’s oil production (1,100 million tons of oil equivalent vs. 540 Mtoe.)”

“If China faces hard energy limits, that means its economy is living on borrowed time. That also means the world as a whole confronts energy and economic constraints that are harsher, and closer, than we are being told. This fact in itself is really peculiar and disturbing. We are participating in a slow-motion train wreck, yet all we can manage to discuss is the quality of the food in the dining car.”

“Maybe this is because acknowledging the train wreck would require us to confront a slew of contradictions at the core of the entire modern industrial project.”

“But further growth may be unattainable anyway, as the world approaches fundamental resource limits. Nobody wants to think about these things, much less talk about them. Not China’s leaders, nor economists elsewhere, nor many environmentalists, nor politicians, nor journalists.”

“But we can’t wish these limits away. Impossible things (like unending economic growth) won’t happen just because people want them to. And awful things (like the wreck of the China train) won’t be averted just because acknowledging them makes us uncomfortable.”

“There are of course steps that Chinese officials—everyone, in fact—could take to make the situation better. We should be developing and deploying renewable energy as fast as possible, with a wartime mentality in terms of priority and commitment. And we should be planning for the end of growth, indeed for economic contraction. These things will be difficult, there’s no getting around it. Still, they are possible in principle. But we will fail for sure if we remain sunk in denial and do not even make the effort.”

“It is all a remarkable spectacle. Sit back, watch, and marvel if you wish. But know one thing: unless we collectively wake up, engage the brakes on this runaway train (and here I am speaking not just of China), and start discussing how we will adjust to the end of economic growth as we have known and defined it, none of this will end well.”

Great man, great writer, great read. Compare that to the ODT  effort I mentioned yesterday.


One Response

  1. this guy puts it rather well….

    we need to be urgently creating a new narrative ourselves

    observational hang gliders…..none of this is indeed is looking like it is going to end well

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