With oil’s price climbing, it’s only going to get harder to extricate the world from its dependence on coal.
Right now, oil delivers 5.8 million BTUs per barrel for $60, while a ton of coal delivers 25 million BTUs for $45, writes Gregor Macdonald. Is it an apples to apples comparison? Certainly not. But as the emerging nations emerge, they find “coal, with its versatility in both heating and industry, is the fossil fuel of choice.”
The bad news for anti-coal folks, the global economic conditions are making it more likely that the world will become more dependent on coal.
Gregor: The data clearly shows the total global call on Coal this decade, as a kind of panicked flight from expensive oil, was enormous. For these reasons, favourable coal conditions are now moving in because oil is lifting in part from dollar weakness and reflationary policy at a time when industrialism remains weak. These are exactly the kind of difficult, almost fetid, economic conditions in which coal thrives. Coal likes a swampy, stagflationary landscape. One where growth has trouble getting off the floor, but where the world’s 6.7 billion people still need heating and basic power generation.
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