The Shame of Chinese Coal

I note much discussion around a recent WUWT post entitled “China: USA is “Selfish” for Wanting to Burn Coal“. It featured the Chinese telling us that we are “selfish” to burn coal and that we should reduce our coal use, because carbon.

Now, in the way of conflicts of interests, I should disclose that I have indeed worked in the oil industry. I served as the Chief Financial Officer for the largest oil import and distribution company in the Solomon Islands … which is a very small market. Our gross sales were US$40 million per year, trivially tiny in the world of fossil fuels. We used to joke that we weren’t Big Oil, heck, we weren’t even Small Oil. We were Baby Oil …

However, there’s nothing like working in an industry to drive a man to understand it, root and branch. I quickly found out that one of the best sources of current information about the energy industry was Platts. In addition to reading their public announcements and analyses, we used to subscribe to their newsletter. From memory, it was about US$1,500 per year or something, and worth every dime. They put a lot of research into their info. Platts have a bureau in Singapore, which is the center of Asian energy dealings.

So it was no surprise to see Platt’s name on the following document:  

China’s coal-fired generation strong despite renewables push: Citi

Singapore (Platts)–31 Mar 2017 156 am EDT/556 GMT

China’s coal-fired power generation as a percentage of the total energy mix is on the rise for the second year, despite the push towards renewable capacity additions in the country, Citi analysts said Friday.

The share of thermal power in the generation mix declined to 73% in 2015 from 83% in 2011.

Thermal has since grown to 74% of the mix in 2016 and to 78% in January-February this year, the analysts said.

“Hydropower generation was down 5% year on year in January-February 2017 and that contributed to thermal power growing faster than overall power demand,” they said.

A 5% growth in China’s coal-fired power generation would mean an additional consumption of about 65 million mt of coal, with the size of the entire seaborne market at about 850 million mt, the analysts said.

China’s January-February total coal imports have surged 48.5% year on year to 42.61 million mt, according to customs data.

Nuclear and wind — which account for about 4.8% of the mix — and solar, which accounts for less than 1%, are continuing to grow at double-digit percentages, but they are “still a small proportion” of the overall electricity demand balance, the analysts said.

Short version? Chinese coal use is rising and there’s no end to that rise in sight.

Smog hangs over a construction site in Weifang city, Shandong province, Oct 16. 2015. Air quality went down in many parts of China since Oct 15 and most cities are shrouded by haze. [Photo/IC]

Now, everyone knows the law of supply and demand. Per the article quoted above, China imports on the order of a QUARTER-BILLION METRIC TONNES of coal per year. If there are more global customers for the coal, that immutable law says that with increasing demand, coal prices will go up.

So should we be surprised when China tries in every way it can to discourage the use of coal?

No surprise at all. Expected. About the only interesting thing is how they are trying to do it.

In Chinese culture, given the focus on the family and the state, being selfish is a bad thing. It means you’re not willing to sacrifice for your people, that you are a bad family member or an uncaring member of society.

In the US, however, being selfish is a mixed bag. Although public generosity is high in the US, you don’t get to be rich without a certain amount of selfishness. In addition, there is a political division—liberals would say that being selfish is a larger issue than would conservatives.

So I suspect that such an accusation is not a bad tactic for China, given that concern about CO2 is equally politically divided. Liberals seem more likely to both think CO2 is an issue and to also care whether the Chinese think they are selfish … which latter concern, I must confess, is not a major feature on my planet.

(I’m reminded of a friend in college. After three years studying Chinese, he quit the major. When I asked why, he said, “I finally realized that no matter how well I can pronounce it, almost nobody Chinese will give a damn what I say” … and the feeling is somewhat mutual. And rightly so, it’s the nature of economic nationalism and international competition. The Chinese are not acting in our best interests, regarding coal and many other things. Nor would I expect them to. But I digress …)

Sunshine today, I’ve been working in my shop, getting my bodyboard ready to paint. I surfed a lot at Frigates Passage in Fiji when I lived there, including on my sixtieth birthday.

On that memorable day I swore a big swear to my mates that I’d surf Frigates on my seventieth birthday … which was last month. I couldn’t make it then because the plan has since expanded to include Clan Eschenbach, meaning my gorgeous ex-fiancee, and daughter and son-in-law. So I’m headed southwest in a couple weeks to surf Frigates, more adventures to come.

Always more to write about, much of which I do at my own blog, Skating Under The Ice.  Come by and take a look, all are welcome.

w.

PS—When you comment PLEASE QUOTE THE EXACT WORDS YOU ARE DISCUSSING so we can all understand your subject.