IEA Predicts Coal to Nearly Overtake Oil as Top Energy Source by 2017

IEA17 December 2012: The International Energy Agency's (IEA) newly released Medium-Term Coal Market Report (MCMR) predicts that coal will come close to overtaking oil as the world's top energy source by 2017. The report expects rising coal use in every region of the world, except the United States, where cheap and abundant shale gas is displacing coal.

The report forecasts additional coal consumption equal to the United States' and Russia's current combined consumption of 1.2 billion tonnes per year for a total of 4.32 billion tonnes of oil equivalent (btoe), nearly equal to oil's predicted 4.40 btoe. According to the report, China and India will be responsible for most of the increase, with India passing the United States to become the second largest consumer of coal. China, in the report's Base Case Scenario, will account for over half of global coal consumption by 2014. Even in an alternative scenario, the Chinese Slowdown Case, where China's GDP growth slows to 4.6%, the country's coal consumption continues to grow.

IEA Executive Director, Maria van der Hoeven, pointed out the consequences of rising coal consumption in combination with the lack of carbon capture and sequestration (CCS) technologies, stating, “CCS technologies are not taking off as once expected, which means CO2 emissions will keep growing substantially. Without progress in CCS, and if other countries cannot replicate the US experience and reduce coal demand, coal faces the risk of a potential climate policy backlash.”

The IEA finds the coal-to-gas shift in the United States has led to a gas-to-coal shift in Europe, as coal suppliers in the United States increased exports across the Atlantic. By 2017, however, the report foresees European natural gas consumption to recover to its prior levels by 2017, even while gas consumption remains elevated in the United States.

The MCMR is part of the IEA's medium-term market report series. Other editions focus on renewable energy, natural gas and oil, which together complement IEA's longer-term World Energy Outlook. [IEA Press Release] [Publication: Executive Summary of the MCMR 2012] [IISD RS Story on IEA Medium-Term Renewable Energy Market Report] [IISD RS Story on IEAWorld Energy Outlook]