Coal is troubled in U.S., but it will be the world's top fuel source by 2020, consulting firm predicts

Despite President Obama's efforts to replace coal with more climate-friendly fuels, the high demand for coal in China and India, and the fact that in Asia coal is cheaper than other resources, will cause coal to surpass oil as the most in-demand fuel in the world by 2020, energy consultancy firm Wood Mackenzie said Monday at the World Energy Congress in South Korea, Florence Tan reports for the Huffington Post. "Global coal consumption is expected to rise by 25 percent by the end of the decade to 4,500 million tonnes of oil equivalent, overtaking oil at 4,400 million tonnes," the firm said. (Associated Press photo by Andy Wong: Coal mine in Mongolia)

William Durbin, president of global markets at Wood Mackenzie, told Tan that China, the leading consumer of coal, has no alternative to the resource "with its domestic gas output limited and liquefied natural gas imports more costly than coal." China "will drive two-thirds of the growth in global coal use this decade" with about 50 percent of the 600 gigawatt of new power generators to be built over the next five years to be coal-fired.

"Abundant supply is also supporting demand for coal," Tan writes. "Excess supply and faltering demand growth have depressed global coal prices this year. European coal futures have tumbled more than 20 percent, while Australian coal prices have plummeted from the record $130 per tonne hit in 2011 to around $80 per tonne as China's demand grew slower than expected. High fuel import costs and nuclear issues will support coal use throughout Northeast Asia, while in North America coal is still competitive in many locations despite abundant low-cost shale gas." That is not the case in Central Appalachia, where coal has become much more expensive to mine than in other areas. (Read more)