President Obama’s climate regulations are projected to reduce coal consumption in the U.S., but India’s projected increase in coal use could offset any gains in greenhouse gas emission reductions through 2040, according to a new report from the Energy Department’s analysis arm.
The Energy Information Administration issued its International Energy Outlook for 2016 on Wednesday, outlining key factors driving global energy demand over the next 25 years.
The analysis modeled the effects of the administration’s Clean Power Plan on the consumption of coal in the U.S., compared with China and India, the three largest consumers of the coal in the world.
The analysis found that the Clean Power Plan, Obama’s new restrictions on power plants, “substantially” lowers coal use. But India is projected to increase its use of coal.
In fact, as coal use slows in the U.S., coal production in India, China and Australia is projected to grow through 2040, increasing from 60 percent in 2012 to 64 percent by 2040. The three countries account for all major new growth in the coal production.
The agency said it is not basing its projections on the final version of the Clean Power Plan, which the Supreme Court stayed in February. Instead, it based its projections on its analysis of the proposed regulations. It plans to release a final analysis of the Clean Power Plan soon, which the agency says shows similar impacts to global coal consumption as it projected for the proposed rule.
Its previous modeling showed potential reductions of 21 percent in U.S. coal consumption in 2020 and 24 percent in 2040. The resulting global reduction in coal use would be 165 quadrillion units of thermal energy by 2020, and 176 quadrillion thermal units by 2040 or about 6.3 billion tons of coal.
India’s coal use is expected to surpass the U.S. by 2030, doubling from 8 percent to 14 percent of its energy mix. At the same time, coal use in China would start to fall, slipping from 48 percent of its energy mix to 44 percent.
Coal industry groups say the final version of the Clean Power Plan is stricter than the proposed rule, focused more on transitioning away from fossil fuels toward increased reliance on solar power. Many scientists blame greenhouse gas emissions from burning fossil fuels for driving manmade climate change.
Adam Sieminski, the head of the Energy Information Administration, said in releasing the new outlook that Asia will be a key driver of energy demand through 2040, although it projects in its reference case that China will cut back on its coal use based on new programs and policies it has in place.
Nevertheless, global energy demand is still expected to grow nearly 50 percent over the next quarter century. “Developing Asia accounts for more than half of the projected increase in global energy use through 2040,” Sieminski said. “This increase will have a profound effect on the development of world energy markets.”
The biggest growth in fossil fuel use will come from increased use of natural gas, which will grow 1.9 percent each year through 2040, driven by shale gas development. “By 2030, natural gas surpasses coal to become the world’s second-largest energy source after liquid fuels,” according to the agency.
Outside of fossil fuels, clean energy technologies will play a significant role in meeting global energy demand, “with renewables expected to be the fastest-growing energy source.”
“By 2040, coal, natural gas, and renewable energy sources provide roughly equal shares,” providing 28-29 percent of the world’s electric power. The rest will be picked up by nuclear energy.
The outlook notes that this represents a significant shift from 2012, when coal comprised 40 percent of all electricity generation.
Wind and hydroelectric power are the two biggest contributors to growth in renewables by 2040, accounting for two-thirds of the total increase from 2012 to 2040.
