Coal is set to remain a major energy source alongside oil over the next 25 years on strong Asian demand, an uncertain outlook for nuclear power and despite the popularity of natural gas.
"Coal will be very competitive for a long time," Richard Jones, deputy executive director of the International Energy Agency told AFP in an interview.
"Coal will remain the main energy in many countries, principally China and India," Jones said last week as the IEA published its 25-year outlook.
"By 2020, when it comes to coal imports, India will be a new China as the largest importer of coal in the world." China is currently also the world's biggest consumer of the fossil fuel.
Companies in China and India are snapping up the world's coal assets to generate power, in particular electricity, that can fuel the countries' fast-growing economies.
Meanwhile new technologies helping to make coal a cleaner form of energy, and an expected decline in the use of nuclear power across developed nations after Japan's recent disaster, is set to boost demand for the mined fuel.
Germany recently announced that it plans to phase out nuclear energy by 2022 in the wake of the disaster at Japan's Fukushima plant in March.
"The immediate impact of the decision in Germany is to import more electricity from their neighbours, and a lot of this imported electricity is coal-fired," Jones said.
World coal production stood at 4.928 billion tonnes in 2009, providing around a quarter of the globe's total energy output, according to the IEA.
"The world ... coal market is perceived as structurally tight by many," Societe Generale analyst Emmanuel Fages said in a recent research note.
He added that that coal-hungry nations would continue to depend on the United States -- the world's second biggest producer of coal after China -- to boost supplies.
"The US have been a large coal exporter in the past. Recently they proved able to balance the market by increasing their export volumes ... The US export capacity evolution is thus important to the future global supply-demand equilibrium," Fages said.
The United States is increasingly looking to natural gas to meet its own huge energy needs, enabling it to help feed Asia's thirst for coal.
The US has become a global leader in the production of natural gas extracted from underground shale rock, helping to drive down the commodity's price on markets. Coal prices have meanwhile risen.
"Coal prices have benefited greatly in recent years because of this strong demand from China, and I don't see that changing," said Jones.
"We are looking at a modest increase (in prices) over the next 25 years, and at the same time, production cost will be stable."
China is also seeking to tap its vast shale gas reserves to reduce its reliance on coal. The world's biggest emitter of greenhouse gases relies on coal for nearly 70 percent of its energy needs.
Over the past eight years China has on average built one coal-fired power station a week -- and this after it used to be a major exporter of the natural resource.
The cost of securing coal from within China can be fatal however. Last week, at least 20 workers were killed and another 23 trapped underground after a blast at one of the country's mines.
Coal mine accidents are common in China, where work safety is often neglected by bosses seeking a quick profit.
Last year, 2,433 people died in coal mining accidents in the country, according to official statistics -- a rate of more than six workers per day.
Tuesday, October 12, 2010
Brown Plan May Curb California Pension Risk: State Analyst
Governor Jerry Brown’s plan to raise retirement ages and force new public employees into a hybrid 401(k)-style pension plan would “substantially ameliorate” California’s financial risk, a state analysis said.
Brown’s proposal to trim pension benefits for future workers and require them to contribute more toward retirement represents a “bold, excellent starting point” toward reining in California’s long-term liabilities, the state Legislative Analyst’s Office said today in a report. The analysis doesn’t estimate projected savings from the governor’s 12-point plan.
“His proposals would shift more of the financial risk for public pensions -- now borne largely by public employers -- to employees and retirees,” Deputy Legislative Analyst Jason Sisney said in the report. “These proposals would substantially ameliorate this key area of long-term financial risk.”
Brown, 73, proposed his changes to pensions Oct. 27, saying they would cut in half the most-populous state’s projected $1.8 billion in pension obligations this year. He would raise the retirement age for full benefits to 67 from 55 for all except public-safety workers, require employees to pay for at least half of their pension benefits, and replace the traditional defined-benefit pension with a hybrid in which the retiree bears some risk.
Unmet Concerns
The report faulted Brown as well. The governor failed to deal with “huge” funding shortfalls in the California California State Teachers’ Retirement System and the pension for University of California employees, Sisney said in the study. Brown also didn’t come up with a way to pay for retiree health benefits, he said.
“We welcome the LAO’s analysis as we move forward to achieve these critical reforms,” Evan Westrup, a Brown spokesman, said by e-mail, referring to the Legislative Analyst.
The state hasn’t contributed toward the University of California system’s pension costs, forcing it to divert money from other areas, according to a statement today from the president’s office. The Board of Regents plans to vote next week on asking for $87.6 million for pensions covering the 10-campus system, representing only a quarter of the state’s designated contribution of $255.6 million, the statement indicated.
Brown also would curb “pension spiking,” the practice in which a worker’s pension is inflated by artificially boosting late-career pay, and “double dipping,” in which an employee receives a pension while working another government job.
Calpers Board
The Democrat also would add two outsiders to the board of the $228.1 billion California Public Employees’ Retirement System, the biggest U.S. public pension.
Rising retirement obligations are straining the budgets of states such as California and cities across the U.S. still grappling with income- and sales-levy revenue slammed by the longest recession since the Great Depression. A weak recovery has churned up a backlash against the pay and benefits of public workers nationwide as taxpayers see their own job prospects and 401(k) retirement funds shrink.
California’s pensions in 2010 had assets to provide almost 81 percent of projected benefits, down from about 87 percent in the preceding year, according to an annual study by Bloomberg Rankings. The median for all states was almost 75 percent.
Brown’s proposal to trim pension benefits for future workers and require them to contribute more toward retirement represents a “bold, excellent starting point” toward reining in California’s long-term liabilities, the state Legislative Analyst’s Office said today in a report. The analysis doesn’t estimate projected savings from the governor’s 12-point plan.
“His proposals would shift more of the financial risk for public pensions -- now borne largely by public employers -- to employees and retirees,” Deputy Legislative Analyst Jason Sisney said in the report. “These proposals would substantially ameliorate this key area of long-term financial risk.”
Brown, 73, proposed his changes to pensions Oct. 27, saying they would cut in half the most-populous state’s projected $1.8 billion in pension obligations this year. He would raise the retirement age for full benefits to 67 from 55 for all except public-safety workers, require employees to pay for at least half of their pension benefits, and replace the traditional defined-benefit pension with a hybrid in which the retiree bears some risk.
Unmet Concerns
The report faulted Brown as well. The governor failed to deal with “huge” funding shortfalls in the California California State Teachers’ Retirement System and the pension for University of California employees, Sisney said in the study. Brown also didn’t come up with a way to pay for retiree health benefits, he said.
“We welcome the LAO’s analysis as we move forward to achieve these critical reforms,” Evan Westrup, a Brown spokesman, said by e-mail, referring to the Legislative Analyst.
The state hasn’t contributed toward the University of California system’s pension costs, forcing it to divert money from other areas, according to a statement today from the president’s office. The Board of Regents plans to vote next week on asking for $87.6 million for pensions covering the 10-campus system, representing only a quarter of the state’s designated contribution of $255.6 million, the statement indicated.
Brown also would curb “pension spiking,” the practice in which a worker’s pension is inflated by artificially boosting late-career pay, and “double dipping,” in which an employee receives a pension while working another government job.
Calpers Board
The Democrat also would add two outsiders to the board of the $228.1 billion California Public Employees’ Retirement System, the biggest U.S. public pension.
Rising retirement obligations are straining the budgets of states such as California and cities across the U.S. still grappling with income- and sales-levy revenue slammed by the longest recession since the Great Depression. A weak recovery has churned up a backlash against the pay and benefits of public workers nationwide as taxpayers see their own job prospects and 401(k) retirement funds shrink.
California’s pensions in 2010 had assets to provide almost 81 percent of projected benefits, down from about 87 percent in the preceding year, according to an annual study by Bloomberg Rankings. The median for all states was almost 75 percent.
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