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PESD has concluded a two year collaborative study on the Indian natural gas market with three India research groups- A.T. Kearney, Indian Institute of Management - Ahmedabad, and Integrated Research and Action for Development (IRADe). The study explores gas demand to the year 2025 in the three main gas consuming sectors within India - electricity generation, nitrogenous fertilizer production, and industrial applications - under a range of different policy and economic scenarios.

The study concludes that coal is likely to remain the dominant fuel in the power sector, but opportunities exist for gas in reducing regional air pollution and providing peaking power. For the fertilizer sector, significant opportunities exist to import cheap fertilizer, thereby reducing domestic gas demand, but political constraints will likely buoy gas demand. Industrial consumers will benefit from increased supplies from LNG to displace expensive liquid fuels, but cheap coal remains the dominant fuel for many industrial applications.

Regional air pollution constraints in the power sector - already underway in certain parts of India could reduce carbon dioxide emissions by over 100 million tonnes per year. Reforms underway in the Indian coal sector, however, could bring a surge in new supplies, which would undermine the opportunities for gas in the power sector.

From an international supply standpoint, India doesn't appear able to guarantee the offtake of a proposed large natural gas pipeline from Iran within the next 10-15 years, making the project very difficult to justify from a financial risk standpoint.

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PESD has concluded a two year collaborative study on the Indian natural gas market with A.T. Kearney. The study explores gas demand to the year 2025 in industrial applications under a range of different policy and economic scenarios.

Industrial consumers will benefit from increased supplies from LNG to displace expensive liquid fuels, but cheap coal remains the dominant fuel for many industrial applications.

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Program on Energy and Sustainable Development Working Paper #68
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PESD has concluded a two year collaborative study on the Indian natural gas market with the Integrated Research and Action for Development (IRADe). The study explores gas demand to the year 2025 in nitrogenous fertilizer production under a range of different policy and economic scenarios.

For the fertilizer sector, significant opportunities exist to import cheap fertilizer, thereby reducing domestic gas demand, but political constraints will likely buoy gas demand. Industrial consumers will benefit from increased supplies from LNG to displace expensive liquid fuels, but cheap coal remains the dominant fuel for many industrial applications.

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Program on Energy and Sustainable Development Working Paper #67
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PESD has concluded a two year collaborative study on the Indian natural gas market with the Indian Institute of Management - Ahmedabad. The study explores gas demand to the year 2025 in the electricity sector under a range of different policy and economic scenarios.

The study concludes that coal is likely to remain the dominant fuel in the power sector, but opportunities exist for gas in reducing regional air pollution and providing peaking power.

Regional air pollution constraints in the power sector - already underway in certain parts of India could reduce carbon dioxide emissions by over 100 million tonnes per year. Reforms underway in the Indian coal sector, however, could bring a surge in new supplies, which would undermine the opportunities for gas in the power sector.

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Program on Energy and Sustainable Development Working Paper #66
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David G. Victor
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PESD has concluded a two year collaborative study on the Indian natural gas market with three India research groups- A.T. Kearney, Indian Institute of Management - Ahmedabad, and Integrated Research and Action for Development (IRADe). The study explores gas demand to the year 2025 in the three main gas consuming sectors within India - electricity generation, nitrogenous fertilizer production, and industrial applications - under a range of different policy and economic scenarios.

The study concludes that coal is likely to remain the dominant fuel in the power sector, but opportunities exist for gas in reducing regional air pollution and providing peaking power. For the fertilizer sector, significant opportunities exist to import cheap fertilizer, thereby reducing domestic gas demand, but political constraints will likely buoy gas demand. Industrial consumers will benefit from increased supplies from LNG to displace expensive liquid fuels, but cheap coal remains the dominant fuel for many industrial applications.

Regional air pollution constraints in the power sector - already underway in certain parts of India could reduce carbon dioxide emissions by over 100 million tonnes per year. Reforms underway in the Indian coal sector, however, could bring a surge in new supplies, which would undermine the opportunities for gas in the power sector.

From an international supply standpoint, India doesn't appear able to guarantee the offtake of a proposed large natural gas pipeline from Iran within the next 10-15 years, making the project very difficult to justify from a financial risk standpoint.

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Program on Energy and Sustainable Development Working Paper #65
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PESD researcher BinBin Jiang, working with collaborators in three coastal provinces, releases a new paper that estimates demand for natural gas in China. The study shows that gas competes mainly in niche markets but can't unseat coal for power generation unless very tight regulations on local air pollution are applied. If local pollution is regulated, however, the study suggests that China would also make a substantial dent in its CO2 emissions.

A multi-year study of natural gas demand in China and India concludes with a forty-three paged document of startling conclusions from the cases of Guandong, Shanghai, and Beijing provinces. PESD researcher BinBin Jiang writes the results of market modeling of natural gas in these three coastal regions and comments on industrial, residential, and commercial demand for the commodity. Her report includes plans for future infrastructure, possible leverage for mitigation of carbon dioxide, the grip of coal on power in China, and estimations of energy usage.

Natural gas demand in China is not only an important concern for potential suppliers, but a global point of interest given the growing consumption of the developing country and associated emissions. The CO2 savings of natural gas as a less carbon intense fuel source for power could make a significant dent in future emissions. One surprising result Ms. Jiang writes on is the potential carbon savings of Chinese policy to reduce sulfur emissions--a concern for local and regional air quality--by switching fuel sources from coal to natural gas.

The report also focuses on China's demand and use for domestic coal and its consequences. The three regions studied have varied dependencies on fuel sources and the transport of fuel for power generation. With the help of three local Chinese academic teams and professional modelers, Ms. Jiang was able to get a full and in depth perspective of the real influences on Chinese decisions in fuel choice.

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PESD has been studying the emerging global market for natural gas through a series of closely integrated research projects. The topics of these studies range from focusing on the geopolitical implications of a shift to a global gas market, the factors that affect gas pricing and flows as LNG links the U.S. and European markets across the Atlantic basin, and how gas projects fare in privately-owned independent power projects (IPPs) in emerging markets.

 

One of the open questions in all these studies concerned China--the country uses relatively small amounts of gas now but could use much more in the future. The role of natural gas in the Chinese economy is of critical import both domestically and for global energy and environmental issues. The competition between coal and natural gas in this market has tremendous implications for local air pollution and for climate change. Rising demand for imported gas in China will also shape the LNG market in the Pacific Basin and could lead to the construction of major international pipeline projects to monetize gas supplies in Russia and the Middle East. The present paper is one in a series that looks at the Chinese market in detail.

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Program on Energy and Sustainable Development Working Paper #62
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Program on Energy and Sustainable Development
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Mark C. Thurber is Associate Director of the Program on Energy and Sustainable Development (PESD) at Stanford University, where he studies and teaches about energy and environmental markets and policy. Dr. Thurber has written and edited books and articles on topics including global fossil fuel markets, climate policy, integration of renewable energy into electricity markets, and provision of energy services to low-income populations.

Dr. Thurber co-edited and contributed to Oil and Governance: State-owned Enterprises and the World Energy Supply  (Cambridge University Press, 2012) and The Global Coal Market: Supplying the Major Fuel for Emerging Economies (Cambridge University Press, 2015). He is the author of Coal (Polity Press, 2019) about why coal has thus far remained the preeminent fuel for electricity generation around the world despite its negative impacts on local air quality and the global climate.

Dr. Thurber teaches a course on energy markets and policy at Stanford, in which he runs a game-based simulation of electricity, carbon, and renewable energy markets. With Dr. Frank Wolak, he also conducts game-based workshops for policymakers and regulators. These workshops explore timely policy topics including how to ensure resource adequacy in a world with very high shares of renewable energy generation.

Dr. Thurber has previous experience working in high-tech industry. From 2003-2005, he was an engineering manager at a plant in Guadalajara, México that manufactured hard disk drive heads. He holds a Ph.D. from Stanford University and a B.S.E. from Princeton University.

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David G. Victor
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In Newsweek International, David Victor writes on geoengineering as a possible means to mitigate carbon emissions.

President George W. Bush averted a nasty rift when he agreed in the final hours of the recent G8 summit to "consider seriously" the need to halve the world's emissions of global-warming gases by 2050. Canada, the European Union and Japan had already embraced that goal, leaving America the dirty stand-out. The deeper truth is that these eight industrial countries control.

Only part of the world's emissions, and the industrial activities that cause emissions are slow to change. Coal will be the hardest to tame because it is so cheap and abundant. Many coal-power plants coming online today will still be in service by 2050, and advanced plants that store effluent safely underground won't be used widely for many more decades. The geopolitical hurdles are also high. The plan introduced with much fanfare earlier this month by China, which next year will become the world's top emitter of greenhouse gases, contains nothing beyond what Beijing already had in place. The world, therefore, is in for some warming.

Pessimism about stopping global warming is leading some scientists to wonder out loud if it is possible through "geoengineering" to force the Earth to cool. The idea is not entirely new and is fraught with dangers, but it is likely to get more attention in coming years. At least since the 1950s, weather makers have dreamed of steering clouds and rain to crops (though they failed in practice). From there it was a small step to dreaming on the global scale. Indeed, when the thesis of global warming was first proposed a few decades ago, some analysts envisioned putting mirrors in space or on deserts to deflect a small fraction of sunlight--just enough to offset, crudely, the buildup of warming gases in the atmosphere. These premature plans were wildly costly and faltered also because climate is sensitive to a lot more than just the gross amount of sunlight that warms the planet.

Today's plans are looking more practical, though still fraught with danger. One would spread iron, a nutrient for algae, in the ocean to stimulate photosynthesis, a natural process in which plants absorb carbon dioxide. Injecting iron in parts of the ocean where it is scarce could trigger algal blooms and help remove even more CO2. Experimental "iron fertilization," as well as careful measurement around natural iron sources, offers tantalizing support for the theory, though nobody knows what biological horrors might follow from messing with the ocean ecosystem on a large scale. Nobel laureate Paul Crutzen helped touch off the current pondering about geoengineering with an editorial in the August 2006 issue of the scientific journal Climatic Change. He revived a Russian idea from the 1970s to inject sulfur particles into the stratosphere with balloons, artillery guns or jumbo jets. (Full disclosure: I am on the journal's board of editors.) Sulfur, in turn, can produce aerosols (particulates) and clouds that reflect some sunlight back to space.

The plan has some drawbacks. Nasty chemistry, including that which caused the hole in the ozone layer, might follow--nobody is sure. Sulfur can also cause acid rain and respiratory diseases. But such ideas are worth a close look, says Crutzen, because unchecked changes in climate might be even worse. And nature already does this--through volcanoes such as Mount Pinatubo, which cooled the planet for a while after it erupted in 1991. None of this is ready for prime time, and the mere mention causes environmentalists to shudder because it distracts from the urgent need to reduce emissions. But it will get more attention as the difficulties in making deep cuts in emissions and adapting to climate change become more apparent.

Geoengineering will raise at least two awkward questions. First, it turns the geopolitics of global warming on its head. Cutting emissions requires many nations to cooperate. Geoengineering can be done by just a few, or even one. Who will determine if geoengineering is safe, and what if the rest of us don't like the consequences? The second is humanity's relationship to nature. Climate warming is already causing stress on natural ecosystems, and it is a small step to imagine engineering rare and special ecosystems to help protect them. But if mankind extends management to the whole planet, do we, in effect, turn Earth into a zoo?

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