SourceWatch needs your financial support to survive and thrive. If you've found this information on the people, organizations, and issues shaping the public agenda helpful, please make a tax-deductible donation now.

From SourceWatch

The People’s Republic of China is the world’s largest consumer of coal, using more coal each year than the United States, the European Union, and Japan combined.^[1] Coal power has been the dominant source of energy used to fuel the rapid economic development of China in the past two decades, with significant impact on its physical environment and human population. China relies on coal power for approximately 70-80% of its energy, with 45% used for the industrial sector and the remainder used to generate electricity.^[2] China’s coal production has more than doubled since 1990, from one billion tonnes then^[3] to 2.3 billion in 2006.^[4] (Other sources have slightly different estimates. For example, the World Coal Institute estimated China's 2006 hard coal production at 2.482 billion tonnes.)^[5] Coal power is managed by the State Power Grid Corporation.

In 2007, China’s demand for coal outpaced its supply and it became a net importer of coal for the first time.^[6]

Contents 1 Coal Reserves 2 Coal Plants 3 Coal Power Companies 4 GreenGen 5 Synthetic Fuels 6 Peabody Energy 7 Coal Gasification Plant Canceled 8 Air Pollution 9 Health Impacts of China's Reliance on Coal 10 International Consequences of Coal-Related Air Pollution 11 Mitigation Efforts 11.1 Beijing closes coal plants 12 Coal Mining 12.1 Coal output up over 10 percent in 2008 12.2 China's top coal province cutting coal production in 2009 12.3 Mining accidents 12.3.1 Blast kills 77 in China's worst industrial accident in over a year 12.3.2 Coal mine flood kills 7 in northeast China 12.3.3 Miners trapped for 25 days in flooded mine 12.4 Mine explosion kills more than 100 13 Economics 14 Citizen fighting coal mining sent to mental hospital 15 Articles and resources 15.1 References 15.2 Related SourceWatch Articles 15.3 External resources 15.4 Sources of Data on Coal Mining and Energy Sources in China 15.5 Reports 15.6 Articles on Chinese media coverage of coal 15.6.1 General Articles

Coal Reserves

China's reported coal reserves are 62.2 billion tons of bituminous coal, 33.7 billion tons of sub-bituminous coal and 18.6 billion tons of lignite. Subtracting the produced quantities since 1992 (the latest data update) results in remaining reserves of about 44 billion tons of bituminous coal, 33.7 billion tons of subbituminous coal and 17.8 billion tons of lignite, or 96.5 billion tons total.^[7] That represents approximately a 40-year supply at the current rate of consumption. The majority of China’s coal reserves are located in the north and north-west regions of the country, which poses logistical difficulties in supplying coal to more populated areas and urban centers. ^[8]

Some analysts estimate lower reserves than those officially reported. Using the Hubbert linearization technique that has successfully been used to predict oil reserves based on usage rates, David Rutledge of California Institute of Technology has estimated China's remaining reserves of coal at 70 billion tons, or less than 30 years at current usage rates.^[9] Zaipu Tao and Mingu Li of Northeastern University PRC School of Business and Administration place yet-to-produce reserves at 71.73 billion tons.^[10]

Coal Plants

Current estimates of the rate at which new coal plants are being built range widely. According to Greg Boyce, CEO of Peabody Energy, China is building 2 gigawatts (2,000 megawatts) of new power plants, mostly coal fired, per week.^[11] However, actual statistics gathered by the U.S. Energy Information Administration (EIA) indicate that the pace of building is significantly slower than that. According to the EIA, China's power capacity for all fuels grew from 1997 to 2005 as follows:

• 1997: 236.6 Gigawatts (GW)
• 1998: 254.5 GW
• 1999: 277.6 GW
• 2000: 298.8 GW
• 2001: 319.4 GW
• 2002: 338.6 GW
• 2003: 356.6 GW
• 2004: 391.4 GW
• 2005: 442.4 GW

Those figures imply a total growth in the eight years from 1997 to 2005 of 206,000 megawatts (206 GW) of capacity, or about 500 megawatts (MW) per week, about one-fourth the rate quoted by Peabody's Boyce.^[12]

One reason for difficulty obtaining accurate figures on Chinese coal plants is that in addition to government-sanctioned new coal plants, many illegal plants are built by local and provincial governments in an effort to maintain the energy supply necessary to sustain economic growth.^[13]

A difficulty in tracking Chinese coal data is that new plants frequently displace older ones. In 2007, the National Development and Reform Commission (NRDC) of China announced that the building of all new coal plants must be accompanied by the elimination of older, less efficient generators. For example, a new 300 MW power station will require the decommissioning of 240 MW of capacity of an older station. All coal plants with a capacity under 50 MW, and 100 MW generators older than 20 years, are to be closed by 2010.^[14] In February 2009, the Chinese government announced that by 2011 it will replace 31 GW of coal-fired power plants with newer, more energy-efficient models.^[15]

Coal Power Companies

China's power companies are primarily state-owned enterprises (SOE). In 2008, the ten largest power companies alone consumed 20% of China's total coal production. The top three power companies, Huaneng, Datong and Guodian, together in 2008 emitted more than the total greenhouse gas emissions of the United Kingdom in the same year. Although coal use is continuing to grow in China, in the last three years, the amount of inefficient coal-fired plants closed down in China reached 54.07 GW, more than the total installed electricity capacity of Australia.^[16]

A July 2009 Greenpeace China report lists the top ten power utilities as being^[16]:

• China Huaneng Group, commonly referred to as Huaneng, with power stations with total installed capacity of 85.86 GW;
• China Datang Corporation, commonly referred to as Datang, with power stations with total installed capacity of 82.42 GW;
• China Guodian Corporation, commonly referred to as Guodian, with power stations with total installed capacity of 70.24 GW;
• China Huadian Corporation, commonly referred to as Huadian, with power stations with total installed capacity of 69.08 GW;
• China Power Investment Corporation (CPI), has power stations with total installed capacity of 45.71 GW;
• China Three Gorges Project Corporation, commonly referred to as Three Gorges, with power stations with total installed capacity of 21.08 GW;
• the Guangdong Yuedian Group, commonly referred to as Yuedian, with power stations with total installed capacity of 21.05 GW;
• Zhejiang Provincial Energy Group, commonly referred to as Zhejiang Provincial Energy, with power stations with total installed capacity of 18.60 GW;
• Shenhua Group Corporation, commonly referred to as Shenhua, with power stations with total installed capacity of 18.50 GW;
• Resources Power Holdings Company (CRP), has power stations with total installed capacity of 17.40 GW;

Of these, the China Three Gorges Project Corporation, which built the controversial Three Gorges hydro project, is the only one of the top ten power companies which doesn't use coal.

GreenGen

In December 2007, the Huaneng Group, a power producer based in Beijing, partnered with Peabody Energy to develop the GreenGen project, which will be the first coal-fueled power plant to employ partial carbon capture and storage.

Synthetic Fuels

The Chinese government has pushed the development of a large coal-to-liquids industry. A Shenhua Group subsidiary is building the country’s first coal-to-liquids plant, scheduled to be operational in 2008, in the Inner Mongolia Autonomous Region.^[17] However, some reports have indicated that the Chinese government is moving away from its emphasis on coal-to-liquids technology to investing in biomass fuels.^[18]

Peabody Energy

In October 2008, three years after the opening of its Beijing office, Peabody Energy announced an estimated $2.5 billion project to pursue a large-scale coal mine and coal-to-liquids plant in Inner Mongolia. The plant, which would convert coal into methanol, would be developed by a group that includes Peabody, Inner Mongolia Jitong Railway Group Ltd., and the Chinese government. The mine would produce 10 to 20 million tons of coal per year. The project is a first for an American coal company in China.^[19]

Coal Gasification Plant Canceled

On September 10, 2008, Datang Huayin Electric Power Company, Ltd and GreatPoint Energy announced they would partner to build a pilot coal gasification plant in the Guangdong Province of China.^[20] Datang Huayin agreed to pay for design, construction, and initial operation costs, which was expected to be between one hundred million and two hundred million dollars.^[20][21] Coal or petroleum coke would have been used as feedstock, and the plant would have used 1,500 tons each day.^[20]

Datang Huayin is a subsidiary of China Datang Corp. and is one of the largest single polluters on Earth.^[20][21] In 2007, Datang Huayin generated 11.4 billion kilowatt-hours of electrical power.^[20] At the time of the agreement, the companies planned for follow-up projects, including a commercial facility in Inner Mongolia.^[20]

GreatPoint Energy is a coal gasification company based in Cambridge, Massachusetts. GreatPoint currently has two pilot gasification plants in the United States, and has also made deals with Peabody Energy and Dow Chemical Company.

Construction on the Datang's full-scale plant in Inner Mongolia - what would have been the first coal gasification plant in China - began in the last week of August 2009.^[22] Plant construction costs were estimated at $3.7 billion (£2.3 billion).^[22] The location for the plant was the city Chifeng of Inner Mongolia.^[22] The plant would have used gasification technology developed by GreatPoint Energy and required about 725 tons of coal each day.^[22] The synthetic gas was to be piped over 230 miles to Beijing.^[22] Datang was covering the majority of costs, with additional funds coming from Beijing Gas Group (a gas distributor) and New Horizon Capital (a private equity fund company in Hong Kong).^[22] Datang also planned to use the plant to make synthetic liquid oil.^[22]

On December 4, 2009, Datang announced the company decided to cancel its plans to build the demonstration facility "due to the low return rate after pre-feasibility studies."^[23]

Air Pollution

Carbon dioxide: In 2001 China’s carbon emissions from coal use constituted about 10% of world CO₂ emissions, which totaled 23,899 million metric tons.^[24] The Kyoto Protocol has called for a decrease of 483 million tons of worldwide carbon emissions by 2012, but by then it is expected that coal plants in China will increase CO₂ emissions by 1,926 million tons, or over four times the proposed reduction.^[25] China’s annual carbon emissions surpassed U.S. emissions in 2007, with three-fourths of these from coal; however, China's per-capita emissions were one-fifth of the U.S per-capita emissions.^[26]

Adding to emissions from coal-fueled plants, industry, and household use, coal mine fires burn about 200 million tons of coal each year in China. This results in an estimated additional 360 million metric tons, or 2-3% of total global output, of CO2 emissions annually. In the Xinjiang province of China, local miners using abandoned mines for shelter may intentionally set fires for heat, and elsewhere waste coal piles and natural coal seams are sometimes accidentally ignited by landscape clearing practices used in farming.^[27]

Mercury: China is currently the world’s largest emitter of mercury, largely as a byproduct of coal burning.^[28]

Sulfur dioxide and acid rain: Less than 15% of China's coal plants have desulphurization systems.^[29] Acid rain resulting from sulfur dioxide falls on one-third of the country.^[1]

Health Impacts of China's Reliance on Coal

China’s citizens suffer significant health threats from coal related pollution. Approximately one-third of China’s urban population lives with severely polluted air. The three most polluted cities in China are in the Shanxi province, the country’s biggest producer of coal and provider of half of the world’s coke supply. In 2003, the Chinese Academy of Environmental Planning estimated that 300,000 people suffer premature death each year due to the effects of air pollution.^[30] In 2005 Chinese environmental experts projected that annual deaths caused by outdoor air pollution would reach 380,000 in 2010 and 550,000 in 2020.^[30] In 2007, the World Bank completed a study with SEPA, China's national environmental agency, which estimated annual premature deaths caused by air pollution at 350,000 to 400,000. After protests by the Chinese government, the study's results were not published.^[30]

International Consequences of Coal-Related Air Pollution

China’s coal-produced air pollution also reaches beyond its borders to Korea, Japan, and even the United States.^[1]

Mitigation Efforts

The welfare cost of air pollution has been estimated to be between 3 and 8% of China’s GDP.^[31] Other studies put the overall environmental impact of China’s pollution problems between 5 and 15% of its GDP, almost exactly matching the figure of the country’s growth.^[32] A study released by Greenpeace in September 2008 found that the external costs to China of using coal - including air and water pollution, ecosystem degradation, infrastructure damage, and human injuries and death - reached RMB 7.1 trillion in 2007, or about 7 percent of China's 2007 GDP. Each tonne of coal used in China, on average, caused environmental damages of RMB 150.^[33]

Although the Chinese government has prioritized economic growth and tackling poverty ahead of environmental concerns for some time, there is growing acknowledgement of China’s coal related pollution crises. In addition to shutting down illegal plants, the government has banned the use of coal for heating and cooking in major cities such as Beijing and Shanghai, and is replacing coal-fired plants in urban areas with natural gas plants. By 2010, all new coal-plants must be fitted with devices that remove up to 95% of sulfur.^[1] The government has also announced plans to cut its reliance on coal to 62% of its energy needs by 2030 and to 35% by 2050, in favor of natural gas, nuclear, hydro, solar and wind power.^[34] In the meantime, new legal coal plants continue to be built, and for China to improve its emissions of global-warming gases and other pollutants, it must rely on new, more costly equipment and technology imported from other industrialized nations. A 2007 study found that increased energy efficiency in China could reduce the amount of energy consumed in the country by 40 percent, and that renewable energy could provide over 50 percent of China's energy needs.^[35]

Beijing closes coal plants

In July 2009, Beijing officials announced they were accelerating a plan to shut down smaller, less efficient coal-fired power plants. Because of a drop in demand for electricity, authorities were able to close coal plants totaling 7,467 generating units 18 months ahead of schedule. The closures are part of an effort to to improve energy efficiency and reduce demand for imported oil and gas. The closures are estimated to reduce sulfur dioxide emissions by 1.1 million tons and carbon dioxide emissions by 124 million tons each year.^[36]

Coal Mining

There are an estimated 23,000 coal mines in China. China's coal mining industry has the world's worst safety record, with coal mines in China responsible for 80% of mining deaths worldwide. In 2005, 5,986 mine workers were killed in China, compared for example, to 47 in the United States.^[37] Since 2006, a year in which 4,746 mine workers were killed, the Chinese government has shut down thousands of small, often illegal mines in an effort to increase safety. The number of miners killed in 2007 dropped by one-fifth, however China still led the world in mining fatalities with 3,786 deaths.^[38][39] The coal mining industry in China is divided among large state-owned mines, local state-owned mines, and thousands of smaller town and village mines. In February 2006, the NDRC began restructuring the coal sector towards the goal of shutting down all small coal mines by 2015, and establishing five or six large state-owned conglomerates. According to one industry report, in 2005 only 2,000 of China’s 28,000 coal mines were state-owned. Many thousands of these mines rely on outdated equipment and are inefficiently managed, contributing to both increased pollution and dangerous working conditions. One-fifth of the mines are illegal, and it is estimated that the Chinese government has shut down between 20,000 and 50,000 small coal mines in the past several years.^[40] While the central government continues to crack down on illegal mines, the great demand for coal by China’s power plants, economic growth rates, and the remote locations of many of the mines challenge the government’s ability to control the construction of both illegal mines and plants.

In April 2009, the Ministry of Land and Resources announced that it would not issue any new coal mining licenses until 2011 due to lagging demand for electricity and coal. The decision extends a 2007 ruling aimed at cutting coal output. While the ban was scheduled to end in 2008, the economic slowdown has resulted in an excess of coal production capacity.^[41]

Coal output up over 10 percent in 2008

China's raw coal output rose to 2.63 billion tons in 2008, a 12.8 percent increase over 2007. Coal profits were estimated at 130.4 billion yuan ($19.06 billion). China's National Development and Reform Commission said that although the country experienced rising demand in the first eight months of 2008, demand had shrunk since September because of the global financial crisis. The agency predicted that demand would continue to slow, and that China's output would grow at a slower pace in 2009.^[42]

China's top coal province cutting coal production in 2009

The top coal producing province in China, Shanxi, plans to reduce its production of raw coal to 650 million tonnes in 2009, a 2 percent decline from the previous year's 660 million tonnes. Shanxi's coal output saw double-digit rates of annual growth over the past few years. The Shanxi Province Coal Industry Administration also announced its decision to close 1,500 mines over the next two years.^[43]

Mining accidents

Chinese coal mines are the deadliest in the world. According to official figures, at least 3,200 people died in China's mines in 2008.^[44] The actual number could be even higher, as the Chinese government is suspected of covering up some accidents.^[45] Most accidents are blamed on a failure to follow safety regulations, including adequate ventilation and available fire control equipment.^[46]

Blast kills 77 in China's worst industrial accident in over a year

On February 22, 2009, a gas explosion at the Tunlan coal mine in northern China killed at least 77 miners and trapped dozens more. It was China's deadliest coal mine accident in more than a year.^[47] As of February 25, rescuers were still searching for one more miner, who faced slim chances of survival. More than 350 people survived the explosion, including 114 who were still hospitalized.

A preliminary investigation into the cause of the blast cited negligence. The state probe found that poor ventilation and gas management, and the absence of on-site security measures and supervision were to blame for the disaster.^[48] Three senior mine officials were fired, including the mine manager, chief safety officer, and chief engineer.^[49]

On February 25, 2009, the governor of the northern province of Shanxi wept as he apologized for the disaster. Governor Wang Jun replaced the province's former governor after an unlicensed tailings dam at an iron ore mine collapsed in September 2008, killing 277 people.^[50]

Coal mine flood kills 7 in northeast China

On April 4, 2009, about 4,000 cubic meters of water poured into the shaft of a mine in Heilongjiang Province, where 22 miners were working underground. Six miners escaped, and another four were rescued and taken to a nearby hospital. As of April 6, the death toll stood at seven, and rescue efforts were still ongoing. Officials said the mine was licensed, but that had not been authorized by safety inspectors and thus was operating. Police said they had detained the owner of the mine, which is reported to have an estimated yearly output of 40,000 tonnes.^[51]

Miners trapped for 25 days in flooded mine

Three miners were rescued on July 12, 2009 after spending 25 days trapped in a flooded mine in Guizhou province in southern China. Rescuers burrowed through a collapsed tunnel to reach the miners, who said they had survived by drinking dirty water and eating coal. The flood trapped 16 miners on June 17. Rescuers had previously recovered one body and were still looking for the remaining 12 miners.^[46][45]

Mine explosion kills more than 100

On November 21, 2009, a massive gas explosion at a coal mine in northeastern China killed at least 42 miners, with 66 more miners trapped about a third of a mile underground. By November 23, the death toll was at 104. The blast occurred while 528 miners were working underground in a state-owned mine in Hegang, in the northeastern province of Heilongjiang. About 400 miners were able to escape.^[52][53]

Economics

China’s demand for coal has driven global coal prices higher, and at the beginning of 2007 coal prices nearly doubled as China imported more coal than it exported for the first time. In 2002, China exported 83 million tons more coal than it imported. In 2007, that number fell to 2 million and it has been predicted that China will import a net of 15 million tons in 2008. The reduction of China’s coal exports due to its internal usage is equivalent to 12% of the international market. Coal prices also spiked 34% at the end of 2007 after severe winter storms in China hindered coal delivery to power plants and led to power shortages.^[6]

Many carbon-intensive industries in the U.S. are moving to China because of the less stringent environmental codes, cheap labor and vast coal resources.^[6]

Citizen fighting coal mining sent to mental hospital

An investigative report released in December 2008 said that public security officials in the city of Xintai in Shandong Province had been institutionalizing residents who persisted in efforts to expose corruption or the unfair seizure of their property. In one case, a 57-year-old farmer seeking compensation for land ruined by a coal-mining operation, was seized by authorities in October on his way to petition the central government in Beijing. He was taken to the Xintai Mental Health Center in October. He was detained for 20 days, during which time he said he was lashed to a bed, forced to take pills, and given injections that made him dizzy and numb.^[54]

Articles and resources

References

Related SourceWatch Articles

• Clean Energy Research Center
• Ten Year Framework on Energy and Environment Cooperation
• U.S.-China Shale Gas Resource Initiative
• U.S.-China Energy Efficiency Action Plan
• U.S.-China Electric Vehicles Initiative
• The U.S.-China Renewable Energy Partnership
• The U.S.-China Energy Cooperation Program
• U.S.-China Energy Policy Dialogue
• U.S.-China Shale Gas Resource Initiative

• Coal-to-Liquids in China
• Global use and production of coal
• Australia and coal
• Britain and coal
• Europe and coal
• Germany and coal
• GreenGen
• Indonesia and coal
• Japan and coal
• New Zealand and coal
• Shenhua Group
• South Africa and coal
• United States and coal

External resources

Sources of Data on Coal Mining and Energy Sources in China

• U.S. Geological Survey, country profiles 1994 - 2006
• U.S. Geological Survey, China’s Growing Appetite for Minerals report 2004
• International Energy Agency, "Coal in China, People's Republic of in 2005", International Energy Agency website, accessed June 2008.
• Joseph Romm, "China's immoral energy policy: Part I," Gristmill, 11/1/07
• "U.S -China Fact Sheet on Coal", The White House, November 2009.

Reports

• Mao Yushi, Sheng Hong and Yang Fuqiang, "The True Cost of Coal", Greenpeace, The Energy Foundation and WWF, October 2008.
• Greenpeace, "Polluting Power: Ranking China's Power Companies", July 2009.

Articles on Chinese media coverage of coal

• "Dai Xiaojun: I Wanted to Show People the Dark Side," China Digital Times
• "Charges due in China mine killing," BBC News< March 20, 2007

General Articles

• Zhao Xiaohui & Jiang Xueli, “Coal Mining: Most Deadly Job in China”, Xinhua, November 13, 2004.
• Susan Watts, “A Coal-Dependent Future?”, BBC News, March 9, 2005.
• Mines and Communities, "China Theme", Mines and Communities website, accessed June 2008. (This page provides a set of links to various articles related to China and mining issues).
• Tom Miles, "McKinsey Maps Out China's Options For Going Green", Reuters, February 26, 2009.

Wikipedia also has an article on China and coal. This article may use content from the Wikipedia article under the terms of the GFDL.