Table 5 shows the trend in world coal production and supply between the years 1980 and 2009 (IEA, 2012). The time series also shows coal industry related consumption, where some is transformed into liquefaction plants and used by the coal industry. In these data series, losses refer to deductions after production but before the coal is consumed by the end-user. It probably does not include losses in the mine or coal preparation plant, or losses during energy conversion during power, steam or heat generation.
The IEA statistics, att first glance, appear to show negligible losses, the percentage is a fraction of one per cent every year. What the statistics show is that recorded losses are minimal, perhaps 0.05–0.10% of production, and so perhaps little concern should be paid to supply chain loss. However, in some of the most crucial coal producing countries, there are no data for losses. One example of this is India. This is probably due to the fact that losses are not reported or properly verified, or in either case lost in statistical differences.
Figure 15 shows the percentage losses and shows a disparity between those countries that are able to record losses, and those that cannot due to the immense task of keeping track of such losses. To assume that the global average for losses in the coal supply chain at just 0.4% must logically be a gross under estimate. Interestingly, the UK and Kazakhstan record some of the highest losses, 1% of production, but these markets could not be more different. Kazakhstan is a large lignite based industry operating opencast mines while the UK comprises of smaller producers of bituminous coals coming from both opencast and underground mines.
It seems highly unlikely that operations in the three largest producers in the world – India, China, and the USA – would be able to accurately record losses due to the scale of the coal markets in these countries However, it is unlikely losses would be zero which is seen for the data in India, for example. A greater understanding of such losses would be valuable for those large coal producing countries. Perhaps for the purpose of preserving global reserves, there might be some value in taking care in minimising losses and maximising efficient production and usage of all fossil fuels. While the losses in the coal supply might be considered unacceptable, it is worth noting that, based on similar IEA data, losses in the natural gas transport chain average 0.8% worldwide. This ignores the gas that could
Table 5 World coal balance 1980-2009, Gtce (IEA, 2012)
Gtce 1980 1990 2000 2004 2005 2006 2007 2008 2009 Production 2.57 3.19 3.18 3.95 4.2 4.43 4.59 4.85 4.92 Total primary energy supply 2.55 3.18 3.27 3.96 4.14 4.37 4.55 4.73 4.71 Statistical differences 0.0 –0.02 0.03 -0.04 -0.02 0.0 0.03 -0.01 –0.04 Liquifaction plants 0.0 –0.02 –0.02 –0.03 –0.03 –0.03 –0.03 –0.03 –0.03 Energy industry own use –0.05 –0.05 –0.07 –0.09 –0.09 –0.09 –0.11 –0.12 –0.12 Losses –0.01 –0.02 0.0 0.0 0.0 0.0 0.0 0.0 0.0 % Losses 0.381 0.554 0.118 0.073 0.085 0.081 0.081 0.062 0.049 % Losses and statistical
be flared off or leaked at production facilities. While coal may be a fairly benign product in its raw form, natural gas methane has a high global warming potential and so from a greenhouse gas emission point of view, coal losses are less of an immediate concern.
On a global scale, coal losses between production and the end-user are therefore not fully understood. Local losses may be well documented, and often written off, but when aggregated worldwide the losses could be meaningful, especially for global mining companies. Global coal producing
companies wish to maximise value from each tonne of coal, and so care is taken wherever necessary. Vast quantities of coal produced in developing countries are sold at below market prices, how much is not precisely known, and so the true value would be considerably less. Given that losses are more likely to occur in industrialising countries, it remains difficult to assess how much losses are worth in monetary terms on a global scale. Conservatively, if both low cost coal and historically low market prices were considered, financial losses due losses in coal supply might be around $10 billion. Assuming market coal prices are at 2009 levels (steam: 100 $/t; coking coal: 200 $/t; brown coal: 30 $/t), the global coal industry was worth $687 billion (probably closer to $400 billion if 2012 prices are considered). With percentage losses of 0.049%, potential financial losses would be $336 million to the global industry. Assuming losses of 1% then losses would be 20 times ($6.7 billion).
If 2011 production figures of 7695 Mt (BP, 2012) are taken, losses could be as little as 3.75 Mt. This would suggest that the world supply of coal is an extremely efficient process, but unless a better understanding of losses in India and China is improved, no such conclusion can be made. Naturally, these losses might be partly due to force majeure occurrences such as storm and flood damage, the capsizing of vessels, the derailment of train wagons, and so on, it is further difficult to partition the losses due to normal operating practice.
Problems with estimating global losses using statistics
1.0 0.8 0.6 0.4 0.2 0 P e rc e n ta g e 1.2 1.4 Col um bia Ind ia Ind ones ia Vie tnam Kaz akhs tan Pol and Rus sian Fed erat ion Sou th A fric a Sp ain Turk ey Ukr aine US A UK