Despite all the attention paid to cleaner, alternative energies, coal is still going strong. In fact, the demand for the “dark fuel” is rising faster than the supply, according to recent reports.

The consumption of coal, which in the past few years has increased sharply in its share of world energy use, is projected to increase significantly in the near term, according to the United States Energy Information Administration (EIA) in its International Energy Outlook 2008, released earlier this year.

The New York Times this week reports that, while the dirtiest of fossil fuels “may be the most visible villain of global warming . . . its use is up and projected to go higher.”

This is thanks to the fact that demand for electricity is increasing, and “there are really no alternatives,” Joel Darmstadter, a senior fellow at nonprofit energy organization Resources for the Future, explained to the Times. “While alternative and renewable energy sources will take a larger share of the energy pie, the use of fossil fuels, including oil and coal, will still grow, as escalating sales of air-conditioners, dishwashers, and everything else electric will push up total demand.”

Coal’s share of world energy use accounted for 24 percent of total world energy use in 2002 and 27 percent in 2005, largely as a result of rapid increases in use in China, IMT reported of the EIA report in July.

Moreover, “a relatively weak dollar has made U.S. coal more attractive overseas, boosting exports to Europe and Asia,” the Wall Street Journal (subscription required) reports this week. “This year, U.S. coal companies are expected to export 81.5 million tons, up from 59.2 million tons last year and 39.6 million tons in 2002.”

On the other hand, “a deepening world economic slowdown could hurt demand for coal, pushing prices lower even though supplies are likely to remain tight due to equipment and labor shortages and safety-related shutdowns,” reports the Journal, which goes on to point out:

At the moment, coal prices are well above last year’s levels. Spot market prices for thermal coal to power U.S. utilities remain above $100 a ton, up from $56 a ton at the beginning of the year, while thermal coal in northern Europe is selling at $166 a ton, up from $152 a ton on Sept. 16. Prices peaked in the summer months of June and July and began falling in August and early September, before edging up again in the past two weeks.

Recently, however, some analysts have been lowering their price forecasts, because “emerging signs of softening reverses what had been a steady climb for coal prices as developing nations burned more of the mineral to generate electricity and run blast furnaces.”

Moreover, the demand outlook is beginning to change, as China’s steel production and electricity generation slowed in August. Although some of this could be chalked up to the Olympic effect — the government ordered factories around Beijing to shut down in August and September to lift the blanket of smog over the city — in the U.S., consumption was up 1.3 percent at power companies in the first five months of the year, compared to last year, but down 2.8 percent at steelmakers and other industrial users, according to the EIA.

Nonetheless, the Wall Street Journal notes that “coal mines continue to operate at full tilt around the world” and that “industry officials said they see no signs of a price collapse.”

“In the absence of national policies and/or binding international agreements that would limit or reduce greenhouse gas emissions, world coal consumption is projected to increase from 123 quadrillion Btu in 2005 to 202 quadrillion Btu in 2030, at an average annual rate of 2.0 percent,” according to the EIA report.

Still, some analysts and environmentalists are skeptical about the forecast. They argue that increasingly more states are setting renewable energy mandates, which “will surely meet increasing fractions of power demand, so ‘business as usual’ will surely not continue.”

Earlier/Related:

Global Energy Demand to Grow by 50 Percent

Dirtiest Fossil Fuel the Future’s Cleanest?

Resources

International Energy Outlook 2008
U.S. Energy Information Administration, June 2008

Coal, a Tough Habit to Kick
by Matthew L. Wald
The New York Times, Sept. 23, 2008

Coal Price May Fall Despite Tight Supply (subscription required)
by Kris Maher
The Wall Street Journal, Sept. 24, 2008