What’s
Wrong Today:
Time Magazine calls the chart below
the scariest
environmental fact in the world. That is hyperbole, but the combination of
China’s dependence on Coal and its lack of renewable water resources must be a nightmare for China’s
central planners.
Coal
Consumption in China:
Coal
consumption in China grew by 325 million
tons, or more than 9% in 2011, continuing its upward trend for the 12th
consecutive year. China’s coal use totaled
87% of the world’s 374 million ton increase in coal use. Of the 2.9
billion tons of global coal demand since 2000, China accounted for 82%.
China now
accounts for 47% of global coal consumption, almost as much as the entire rest
of the world combined. Add the two amounts to get total annual global
consumption:
Robust demand for coal in China is the result of a 200% increase in Chinese
electric power generation since 2000, which is fueled primarily by coal.
China’s coal demand has increased at 9% per year from 2000 to 2010, significantly higher than global growth
excluding China, which averaged only 1%. Platts, the premier provider
of energy-related information, reported that China
imported 289 million tons of coal in 2012, up 57.9% over the prior year.
China is
now burning almost as much coal as the rest of the world combined. And despite support from Beijing for
renewable energy and a dawning understanding about the dangers of air
pollution, coal use in China is poised to continue rising to support its
industrial growth and demand for electric power.
The reason
why coal is so popular in China is that it’s very, very cheap. And that’s why,
despite the danger coal poses to health and the environment, neither China nor
any other developing nation is likely to turn away from it.
Water
Consumption in China
CNN
reports that China contains only 7% of the world’s
potable water but must feed almost 20% of the world’s population.
Meanwhile, its people are living longer and eating more, especially more
water-intensive food,
such as meat and dairy.
Earlier
this year, Greenpeace released
a study implicating
China’s reliance on coal power for its water problems. Despite Greenpeace’s obvious
agenda, the reality is that Beijing plans to build 16 new coal-fired power
stations in four provinces by 2015; which will end up consuming billions more cubic
meters of water.
Shale gas also uses up copious amounts of water, and academics have
warned
that water shortages could hamper China’s shale gas production ambitions.
The
clearest message is that water shortages are a chief constraint on energy and
power. Cooling a coal power plant without water is not easy.
Look at
this chart taken from the IEA report, page 518, figure
17.9:
65% of
China’s water use is for irrigation, and 23% for industry, mostly in coal production/power
generation. Notice how much of China’s coal industry is in areas with water
troubles. You can’t mine the stuff or use it in a power plant without copious
amounts of water. You can’t recover shale gas as an alternative to coal without
water. So while China has the world’s biggest shale gas reserves at 36 trillion
cubic meters, much of it is in the Sichuan Basin, which the chart above shows
has stress or vulnerability to water scarcity.
Non-renewable
aquifers are being depleted throughout China. Under the latest five-year plan,
in north and eastern China, home to Beijing, Tianjin and Shanghai, water use
has outpaced supply, prompting the construction of the South-to-North Water
Diversion Project, which aims to transfer water from the wet south to the dry
north. However, the Guardian says the water along
the project’s path is contaminated by pollution and that it’s barely
usable, even after treatment.
Water may have
to be rationed more severely by price, as will electricity. That will be an
extra cost/tax, a loss of competitive advantage, and a drag on GDP growth.
Water-adjusted
GDP may become a new economic term.
So,
where is this heading?
Combining
the realities of the demographic pressures discussed yesterday and the clearly growing
inability to mine/use its coal resources, China has serious economic problems
just over the horizon that may be difficult to solve.
There are
many moving parts in their plan. They seem committed to continuing their
significant annual GDP growth. And in order to grow:
- They
need to solve their looming worker shortage
- They
need to bring more electrical power plants on line
- To
fuel those plants, they need more coal and more water
- To
feed their growing urban middle class, they need water to meet the demand for more
meat and dairy
- They
must enhance the safety net for the
world’s largest elderly population which will reach 300 million (the
size of the US) by 2025
How they
solve all of these simultaneous equations will determine what kind of society
they will become and what level of economic power they wield in the first half
of the 21st Century.
Frightening.
Funny too. While sources of energy are all the rage, it turns out, water will be the next big thing. The issues surrounding frakking are really about water – how much good water should we use to get oil and gas, and is it even worth the risk to our groundwater.
In a few decades we will know, but it may be too late.
@ Terry: Agree that water shortage is looming as a limit on global growth. Fracking is a dilemma: it uses water and pollutes groundwater, a truly vicious cycle.
It creates contradictions like the one shown at this link: http://agonist.org/flare-the-gas-and-the-fat-pipe/
Check out how in the middle of the Texas drought, they are using immense amounts of water in fracking.
Tis a shame at very least. And shows just how skewed to the big deal our policies are. By the big deal, i mean capital resource intensive. This is entirely different from development that encourages small business and prudent development. Sometimes we get both (like large chem/pharm in the corridor in NJ from woodbridge to princeton – we have both large pharma and small consulting firms, labs etc. But energy development, has far less benefit to the economy overall. (this point needs a little development, but its morning and i am squeezing in real work.)