China and coal

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This article is part of the CoalSwarm coverage of China and coal
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The People’s Republic of China is the world’s largest consumer of coal, using more coal each year than the United States, the European Union, and Japan combined.[1] Coal power has been the dominant source of energy used to fuel the rapid economic development of China in the past two decades, with significant impact on its physical environment and human population. China relies on coal power for approximately 70-80% of its energy, with 45% used for the industrial sector and the remainder used to generate electricity.[2] By 2010, China comprised 48% of world coal consumption.[3]

China's coal production has more than doubled since 1990, from one billion tonnes then[4] to 2.72 billion in 2008.[5] (Other sources have slightly different estimates. For example, the World Coal Institute estimated China's 2008 hard coal production at 2.761 billion tonnes.)[6] Coal production in China was estimated at almost 3.4 billion short tons (i.e. 3.084 billion tonnes) in 2009.[7] China's coal production was estimated to be 3.47 billion tonnes in 2011.[8] Coal power is managed by the State Power Grid Corporation. (Note, 1 tonne = 1000 kg or 2,205 pounds.)

In 2007, China’s demand for coal outpaced its supply and it became a net importer of coal for the first time. The World Coal Institute estimates that China imported 46 million tonnes of coal; imports reached 190 million tonnes in 2011.[9]

In March 2012, China reported that it expected to consume 270 million tonnes per year less standard coal equivalent for electricity generation by 2015, compared with 2011 levels. The country stated that this would be achieved through development of more non-fossil energies and improving coal consuming technologies. By 2020, China's electricity industry is estimated to save about 235 million tonnes per year of standard coal equivalent compared with the coal consumption level in 2015.[10]

Contents

Coal Reserves

China's reported coal reserves are 62.2 billion tons of bituminous coal, 33.7 billion tons of sub-bituminous coal and 18.6 billion tons of lignite. Subtracting the produced quantities since 1992 (the latest data update) results in remaining reserves of about 44 billion tons of bituminous coal, 33.7 billion tons of subbituminous coal and 17.8 billion tons of lignite, or 96.5 billion tons total.[11] That represents approximately a 40-year supply at the current rate of consumption. The majority of China’s coal reserves are located in the north and north-west regions of the country, which poses logistical difficulties in supplying coal to more populated areas and urban centers. [12]

Some analysts estimate lower reserves than those officially reported. Using the Hubbert linearization technique that has successfully been used to predict oil reserves based on usage rates, David Rutledge of California Institute of Technology has estimated China's remaining reserves of coal at 70 billion tons, or less than 30 years at current usage rates.[13] Zaipu Tao and Mingu Li of Northeastern University PRC School of Business and Administration place yet-to-produce reserves at 71.73 billion tons.[14]

Coal Production

Coal production in China was estimated at almost 3.4 billion short tons in 2009.[15] In November 2010, Chinese media reported that Beijing is considering capping domestic coal output in the 2011-2015 period, partly because officials worry miners are running down reserves too quickly to meet the needs of a rapidly expanding economy, which the Wall Street Journal said raises issues around China and peak coal.[16]

The top coal producing province in China, Shanxi, said it plans to reduce its production of raw coal to 650 million tonnes in 2009, a 2 percent decline from the previous year's 660 million tonnes. Shanxi's coal output saw double-digit rates of annual growth over the past few years. The Shanxi Province Coal Industry Administration also announced its decision to close 1,500 mines over the next two years.[17]

China's raw coal output rose to 2.63 billion tons in 2008, a 12.8 percent increase over 2007. Coal profits were estimated at 130.4 billion yuan ($19.06 billion). China's National Development and Reform Commission said that although the country experienced rising demand in the first eight months of 2008, demand had shrunk since September because of the global financial crisis. The agency predicted that demand would continue to slow, and that China's output would grow at a slower pace in 2009.[18]

In May 2011, it was reported that large power shortfalls for industrial users were expected for the summer. China's top power distributor said power deficits in areas serviced by the State Grid Corp of China (SGCC) would amount to 30 gigawatts in summer even if coal supplies are steady, water levels are normal and there are no persisting high temperatures, with the shortfalls increasing to around 40 GW if coal supplies tighten up, water stocks are less than normal and unusually high temperatures persist.[19]

China leads the world in longwall mining

World coal production in 2009 is estimated at 5,990 million metric tons (5,348 million short tons) for hard coal and 913 million metric tons (815 million short tons) for brown or lignite coal.[20] Worldwide, approximately half of coal production is produced via longwall mining, mainly due to the high proportion of Chinese mining performed using longwall methods. In China, underground mining accounted for 85.9% of total production in 2008. There are more than 20 underground coal mining methods in China, almost exclusively longwall. Applied to estimated 2009 production of 3,210 million short tons, the total amount of coal produced via longwall mining in China is 2,757 million short tons.[21] In 2008, China's 268 national strategic mines operated 1,545 longwall faces and 4,808 development faces. Of these, 88.3% are mechanized.[22]

Other countries with major amounts of longwall mining include:

  • United States: The United States operates 49 longwalls producing over 175 million metric tons (156 million short tons) per year.[23]
  • Australia: China has 29 operating longwall faces producing 47.5 million tonnes (42.4 million short tons)[23]

China to consolidate its coal industry

In November 2010 China announced it was going to consolidate its coal industry by forming 10 coal firms with about 100 million tonnes of annual production capacity each by 2015.

China's National Energy Administration also stated that the country would establish 10 firms that each produce some 50 million tonnes per year and raise the number of mines with capacity of 10 million tonnes each to 60 in five years.

As of November 2010, there were only two Chinese coal firms -- Shenhua Group and China National Coal Group -- that had production capacity above 100 million tonnes per year.[24]

Exports

Chinese coal exports are controlled and a quota is distributed by the central government to a few coal groups. It is adjusted periodically depending on the domestic situation of supply and demand. As of 2010, major receiving countries and areas for steam coal exports were India, Japan, South Korea and Taiwan, while Brazil, India, Japan and the U.S. imported Chinese coke.[25]

In May 2012 the Shenhua Group announced they were going to invest 3.82 billion yuan ($602.05 million) coal loading facility in eastern China.[26] Additionally, in May 2012 it was reported that at least 30 coal container vessels were floating off China's coast because traders who bought them have been unable to resell them to end-users.[27]

In March of 2013, the anti-dumping measures imposed on imports of Chinese coal coke expired, according to the European Commission. The ruling was made in March of 2008, and applied to pieces of coal coke with diameters greater than 80 millimeters. [28]

2010 China coal exports

In August 2010, China's General Administration of Customs announced that the country exported 1.39 million tons of coal in July, up 12% from the 1.24 million tons recorded the same month of last year. In the first seven months of 2010, China's coal exports were 11.53 million tons, 11% less than in the same period of last year. Also, during the period from January to July, China exported 1.98 million tons of coke, surging 599% from the same period in 2009.[29]

Jiangsu pier project approved

In December 2010, Huaneng Power International, China's largest power producer, said it had obtained regulatory approval for its 2 billion yuan ($300.2 million) coal pier project in China's Jiangsu province. The project will serve as a public terminal for the transhipment, storage and distribution of coal across the waterway network of Yangtze River Delta.[30]

Imports

Estimates are from the U.S. Energy Information Administration's International Energy Statistics:

China Coal Imports by year (million short tons)[31]
Country 2006 2007 2008 2009 2010
China 42.0 56.2 44.5 138.9 195.1

Note: 1 metric ton (tonne) = 1.10231 short tons

China’s demand for coal has driven global coal prices higher. At the beginning of 2007 coal prices nearly doubled as China imported more coal than it exported for the first time. In 2002, China exported 83 million tons more coal than it imported. In 2007, that number fell to 2 million.[9] Imports are highest for southeastern coastal areas, which are further from the coal producing areas and have greater demand due to industrialization and concentrated populations, such as Fujian, Guangdong, and Guangxi.[25]

Coalition Protests Ambre Energy's Push for Coal Exports.

China's 2009 net imports soared to over 100 million tons, despite China's domestic coal output of over 3 billion tons a year. According to Reuters, China's net coal imports could rise to 170 million tons or more in 2010,[32] and are expected to jump 63 percent to more than 200 million tons in 2011, as domestic output struggles to keep pace with demand.[33]

It was reported in May 2011 that China would likely see its import demand more than double by 2015 with India close behind, as both increase supplies from international markets to feed rapidly growing power industries. China's thermal coal imports could rise to 200 million tonnes in 2015 from around 90 million tonnes in 2011.[34] However, it was reported in August 2011 by the National Development and Reform Commission that during the first six months of 2011 coal exports from China was down 13.7 percent year from the same point 2010, while coal imports into China amounted were 11.8 percent at the same point in 2010. Thus, net coal imports decreased by 13 percent compared to the same period last year.[35] In October 2011 it was reported that coal imports to China could be around 150-160 million tonnes, or 5-10 percent of China's total consumption.[36]

In January 2012 it was announced that China had overtaken Japan as the world's largest coal importer. Japan held the No. 1 position since at least 1975 until 2010. China, also the world's biggest coal producer and consumer, imported 182.4 million tonnes of the fuel in 2011, 10.8 percent higher than a year earlier. Japan's customs-cleared imports fell 5.1 percent to 175.2 million tonnes in 2011.[37]

As of July 2012 coal prices in Australia have dipped 30% since the beginning of the year, largely because of a dip in Chinese demand.[38]

Imports from Mongolia

It was reported in October 2011 that Mongolia became Australia's lead supplier of foreign coal, overtaking Australia. It was estimated that China could save $6 billion annually by importing coal from Mongolia because of its low price. China imports coking coal from Mongolia through the Sehee border point.[39]

It was reported in June 2012 that the Mongolia Mining Corp. was planning the construction of an $800 million railway that would double export capacity to China.[40]

Imports from United States

Northwest ports to be used to export Powder River Basin coal to Asian markets

For more information on the proposed port developments in the western United States please visit the Coal exports from northwest United States ports article.

In September 2010 Peabody Energy announced that "Coal's best days are ahead." Peabody stated that exports of coal from the Powder River Basin in Montana and Wyoming will be central to its expansion goals. The Oregonian in September 2010 reported that Northwest ports, and in particular ports in Portland, Oregon, may be used in the future to export coal to Asia. The Port of Portland said it doesn't have the space for coal exports in the short-term, but its consultants cited coal as a potential long-term market if it adds terminals on West Hayden Island.

Coal Export Threatens the Northwest.

In early November 2010 Australia-based Ambre Energy asked Cowlitz County officials in southern Washington State, which borders Oregon, to approve a port redevelopment that would allow for the export of 5 million tons of coal annually. On November 23 Cowlitz County officials approved the permit for the port redevelopment, which is to be located at the private Chinook Ventures port in Longview, Washington. Coal terminals also are proposed at two other sites along the Columbia River.[41]

Environmentalists stated that they would oppose any such actions, arguing that coal contributes to pollution and global warming.[42] Early discussion of how many jobs the port would produce was roughly twenty total.[43]

Proposed Gateway Pacific Terminal

The Gateway Pacific Terminal is a proposed terminal at Cherry Point near Ferndale, Washington, and would have a maximum capacity of about 54 million tons. On February 28, 2011, SSA Marine applied for state and federal permits for the $500 million terminal, triggering formal environmental review. If approved, the terminal would begin construction in early 2013 and operations in 2015.[44]

On March 1, 2011, Seattle-based SSA Marine announced it had entered into an agreement with St. Louis-based Peabody Energy to export up to 24 million metric tons of coal per year through the Gateway Pacific Terminal. According to Peabody, the terminal in Whatcom County would serve as the West Coast hub for exporting Peabody's coal from the Powder River Basin of Wyoming and Montana to Asian markets. The project would ramp up potential U.S. coal exports to Asia from Washington state. Another coal export terminal proposed in Longview, the Millennium Bulk Logistics Longview Terminal in southwest Washington, has drawn environmental opposition. That Millennium Bulk Logistics terminal would be a joint venture between Australia-based Ambre Energy and Arch Coal.[45]

Environmental groups have appealed to Washington's Shoreline Hearings Board over a permit awarded for the port by Cowlitz County commissioners.[45]

According to Gateway Pacific Terminal's website the company plans on providing a "highly efficient portal for American producers to export dry bulk commodities such as grain, potash and coal to Asian markets." Additionally, the site contends that the "Gateway project will generate about 4,000 jobs and about $54 million a year in tax revenue for state and local services. Once in full operation, it's estimated that Gateway will provide almost $10 million a year in tax revenue, create about 280 permanent family-wage jobs directly, and nearly 1,400 additional jobs through terminal purchases and employee spending."[46]

During the week of June 6-10, 2011 SSA Marine filed a permit application the proposed Gateway Pacific Terminal. The application read: "The applications submitted herein will cover the difference in scope between that approved project and our full buildout plan."

The earlier permit was noted in the application was approved by the Whatcom County Council in 1997. At that time, it envisioned a 180-acre development that would handle 8.2 million tons of cargoes per year, including petroleum coke (produced by local refineries) iron ore, sulfur, potash and wood chips. Coal was not mentioned an an export commodity in the earlier permit.[47]

Later in June 2011, Whatcom County officials announced that SSA must apply for a new permit for its proposed Gateway Terminal.[48]

Port of St. Helens potential candidate for coal export to Asia

In June 2011, The Oregonian reported that the Port of St. Helens in Columbia City, Oregon was being eyed as a potential Northwest port that would export coal to Asian countries. It was also reported that Columbia Riverkeeper, which opposes coal export, asked a judge to require St. Helens Port to release all of its coal-related documents. In a response, a lawyer for the port stated that doing so would violate a confidentiality agreement and "would result in the greatest harm to the public interest which can be imagined -- a loss of jobs in our community."[49]

Oregon Democratic Gov. John Kitzhaber, wrote in a statement to The Oregonian that the terminal "should not happen in the dead of night. We must have an open, vigorous public debate before any projects move forward."[49]

Railroad company looks at Port of Grays Harbor in Washington State for coal exports

It was reported in July 2011 that a railroad was looking at a Port of Grays Harbor terminal in Hoquiam, Washington for a terminal to ship coal to China. RailAmerica Vice Predident Gary Lewis told The Daily World of Aberdeen the idea would require further study and the project is several years from being completed.

RailAmerica owns the Puget Sound and Pacific Railroad that serves Grays Harbor. The port's potential coal export terminal, located on a former log yard, could bring another 75 ship calls a year to Grays Harbor.[50]

In August 2011 it was announced that RailAmerica was canceling its plan for a coal storage and export facility at the port's Terminal 3. The company said they believed there are other uses for the terminal that are more likely to generate jobs, tax revenues and business for the port and for the company, said Gary Lewis. As such plans to export coal from Grays Harbor were cancelled.[51]

World Bank plans to limit financing of coal-fired power plants

The World Bank decided to limit the financing that it provided for coal power plants the day after president Barack Obama announced that the United States would stop investing in coal projects overseas. The World Bank Group wants to make a transition towards more sustainable energy. "Toward a Sustainable Energy Future for All," a paper submitted to board members for review is in preparation for discussion on July 19th. If coal is phased out than natural gas could play an important role in the future. "Natural Gas" which has half the carbon footprint of coal at the point of combustion, can be the least-cost means of providing flexible electricity supply where demand and supply fluctuate," the report said.[52] [25]

Obama's Promises to Go Over GOP Heads for Climate Change.

China's coal use

In 2000 coal use globally was: China 28%, other Asia 19%, North America 25% and the EU 14%. By 2010 China's global use rose to 48% of the worldwide total.[53][54]

History

In 2006, the Chinese government deregulated coal prices, undoing its practice of specifying coal prices for electricity producers. Since China deregulated its coal market in 1992, the government had set coal prices for power-plants at a much lower level than the prevailing market price in order to sustain low electricity retail prices.[55]

In 2007, China’s demand for coal outpaced its supply and it became a net importer of coal for the first time. The World Coal Institute estimates that in 2008 China imported approximately 47 million tons of coal.[9]

In 2009, China overtook the U.S. as the world’s biggest energy user (annually), according to the International Energy Agency. China surpassed the U.S. in carbon emissions in 2007, according to the U.S. Department of Energy. China released 6.533 million tons of carbon dioxide in 2008, compared with 5.832 million for the U.S.[56]

In 2010, China increased energy consumption by 5.9 percent, according to data from the National Bureau of Statistics. Energy use climbed to 3.25 billion metric tons of coal equivalent in 2010. Economic growth accelerated to 10.3 percent in 2010, the fastest pace in three years, as industrial production rose, boosting demand for fuel and electricity. Power use grew 13.1 percent, according to the bureau.[57]

Coal Plants

Current estimates of the rate at which new coal plants are being built range widely. According to Greg Boyce, CEO of Peabody Energy, China is building 2 gigawatts (2,000 megawatts) of new power plants, mostly coal fired, per week.[58] However, actual statistics gathered by the U.S. Energy Information Administration (EIA) indicate that the pace of building is significantly slower than that. According to the EIA, China's power capacity for all fuels grew from 1997 to 2005 as follows:

  • 1997: 236.6 Gigawatts (GW)
  • 1998: 254.5 GW
  • 1999: 277.6 GW
  • 2000: 298.8 GW
  • 2001: 319.4 GW
  • 2002: 338.6 GW
  • 2003: 356.6 GW
  • 2004: 391.4 GW
  • 2005: 442.4 GW

Those figures imply a total growth in the eight years from 1997 to 2005 of 206,000 megawatts (206 GW) of capacity, or about 500 megawatts (MW) per week, about one-fourth the rate quoted by Peabody's Boyce.[59]

One reason for difficulty obtaining accurate figures on Chinese coal plants is that in addition to government-sanctioned new coal plants, many illegal plants are built by local and provincial governments in an effort to maintain the energy supply necessary to sustain economic growth.[60]

A difficulty in tracking Chinese coal data is that new plants frequently displace older ones. In 2007, the National Development and Reform Commission (NRDC) of China announced that the building of all new coal plants must be accompanied by the elimination of older, less efficient generators. For example, a new 300 MW power station will require the decommissioning of 240 MW of capacity of an older station. All coal plants with a capacity under 50 MW, and 100 MW generators older than 20 years, are to be closed by 2010.[61] In February 2009, the Chinese government announced that by 2011 it will replace 31 GW of coal-fired power plants with newer, more energy-efficient models.[62]

Coal-fired power stations financed by international public investment institutions

Coal-fired power stations financed by international public investment institutions include:[63]

Ningxia plant

The proposal for a coal-to-fuels plant in the northwestern Chinese province of Ningxia, a planned venture with South Africa’s Sasol, is awaiting approval from the National Development and Reform Commission, according to head of Shenhua Group’s science and technology development department Gu Dazhao in November 2010.[64]

Sasol and Shenhua submitted an application to China's National Development and Reform Commission (NDRC) in 2009 to build the 94,000 barrel-a-day plant to convert coal into motor fuel. On March 7, 2011, it was announced that the companies received approval from the Chinese environmental ministry for the plant.[65]

GE invests in China IGCC project

On January 18, 2011, GE announced that it would be forming a "clean coal" technology joint venture in China with the Shenhua Group, a state-owned coal mining and energy company. The joint venture company will sell industrial coal gasification technology licenses, conduct research and development and develop facilities around integrated gasification combined cycle (IGCC).[66]

Peabody teams with China

In January 2011, Peabody Energy announced two partnerships with Chinese energy companies to build coal mines near newly planned power plants in China. China Huaneng Group, the largest power generator in China, and California-based Calera Corp., agreed to develop a 1,200-megawatt power plant and adjacent coal mine in China's Inner Mongolia. Peabody would operate the surface mine. Huaneng and Calera plans to convert a percentage of the plant's carbon dioxide emissions into cement and other building materials. In the second project, Peabody said it will partner with Yankuang Group Co. to develop a 20-million-ton-per-year surface coal mine to fuel a 2,000-megawatt power plant in the Zhundong region of Xinjiang in northwestern China. The massive project also includes a facility to convert coal to natural gas. Peabody expects the Xinjiang region to nearly triple its coal production by 2015 to increase its output to 1 billion metric tons by 2020.[67]

On July 11, 2011, Peabody Energy announced the company’s partnership with the government of the Xinjiang Uighur Autonomous Region and Communist Party on a plan to develop a surface coal mine in China that will produced 50 million tons of coal a year “over multiple decades.” The Xinjiang Region is China’s largest administrative region with vast reserves of coal estimated to account for approximately 40 percent of China’s reserves. The government expects Xinjiang’s coal output will increase from approximately 100 million tonnes in 2010 to more than 1 billion tonnes.[68]

Coal Power Companies

China's power companies are primarily state-owned enterprises (SOE). In 2008, the ten largest power companies alone consumed 20% of China's total coal production. The top three power companies, Huaneng, Datong and Guodian, together in 2008 emitted more than the total greenhouse gas emissions of the United Kingdom in the same year. Although coal use is continuing to grow in China, in the last three years, the amount of inefficient coal-fired plants closed down in China reached 54.07 GW, more than the total installed electricity capacity of Australia.[69]

A July 2009 Greenpeace China report lists the top ten power utilities as being[69]:

  • China Huaneng Group, commonly referred to as Huaneng, with power stations with total installed capacity of 85.86 GW;
  • China Datang Corporation, commonly referred to as Datang, with power stations with total installed capacity of 82.42 GW;
  • China Guodian Corporation, commonly referred to as Guodian, with power stations with total installed capacity of 70.24 GW;
  • China Huadian Corporation, commonly referred to as Huadian, with power stations with total installed capacity of 69.08 GW;
  • China Power Investment Corporation (CPI), has power stations with total installed capacity of 45.71 GW;
  • China Three Gorges Project Corporation, commonly referred to as Three Gorges, with power stations with total installed capacity of 21.08 GW;
  • the Guangdong Yuedian Group, commonly referred to as Yuedian, with power stations with total installed capacity of 21.05 GW;
  • Zhejiang Provincial Energy Group, commonly referred to as Zhejiang Provincial Energy, with power stations with total installed capacity of 18.60 GW;
  • Shenhua Group Corporation, commonly referred to as Shenhua, with power stations with total installed capacity of 18.50 GW;
  • Resources Power Holdings Company (CRP), has power stations with total installed capacity of 17.40 GW;

Of these, the China Three Gorges Project Corporation, which built the controversial Three Gorges hydro project, is the only one of the top ten power companies which doesn't use coal.

Yanzhou coal buys 51% of Mongolian company

In September 2010, China's fourth-largest coal miner Yanzhou Coal said it will pay $682 million in an effort to acquire 51% of Inner Mongolia Haosheng Coal Mining. Yanzhou said it is looking to bolster reserves as Chinese coal consumption continues to surge. Yanzhou will pay $682.1 million to two sellers for a 35.5 percent stake in the developer of the Shilawusu coal field, and seek to buy a further 15.5 percent through an open bidding process, according to Bloomberg News. Yanzhou's last major acquisition was the $3 billion purchase of Australia's Felix Resources.[70]

Coal officials found to be taking bribes

According to the China provincial government's supervision department, 906 government officials have been found to have received bribes or committed other crimes related to the coal mining sector, including a former vice-mayor and the former public security head of Datong city. Xing Shunxi, Deputy Director of the supervision department of the Shanxi government, said that in a campaign to crack down on corruption in the industry, launched in July 2008, 2,353 people so far have been punished in 2,185 cases. An amount of 30.4 billion Yuan (4.6 billion dollars) of illegal funds, a figure equal to one-third of the provincial government's revenue in 2009, has been retrieved. Shanxi possesses 260 billion tons of known coal deposits that are about one-third of the country's coal resources. Xing also said that the anti-corruption campaign is focused on detecting officials who have invested in the coal industry, a practice that is banned in China, and those taking bribes or illegally reselling State assets during property reconstruction.[71]

Coal Waste

In September 2010, Greenpeace reported that China's huge number of coal-fired power plants generate so much toxic coal ash that the coal waste could fill an Olympic-sized swimming pool every two and a half minutes. According to the report, China consumed more than 3 billion tons of coal in 2009, more than triple what is used by the second-ranked United States, and generated 375 million tons of coal ash in its single-largest source of solid waste.[72]

China depends on coal-fired power for 70 per cent of its energy, and Greenpeace found that China's methods for disposing of the ash are inadequate, with disposal sites often located near residential areas, allowing for contamination of surface water and deeper well water. China's coal ash production has grown by 2.5 times since 2002, when the country began a rapid expansion of coal-fired plants. Roughly one coal-fired power plant was being built each week in China, which currently has an estimated 1,400 such plants. China claims it recycles up to 60 per cent of the ash by mixing it to create construction materials such as bricks. However, the Greenpeace report said it doubted that the recycling rate was even half that. A team collected coal ash samples from 14 power stations nationwide and found more than 20 kinds of heavy metals and chemical compounds. Samples of groundwater and well water samples close to disposal sites showed chemical pollutants in excess of amounts the government deems safe for drinking water. Residents living near disposal areas have complained of health issues ranging from skin to respiratory illnesses, according to the report.[72]

A 2011 Greenpeace report, "The True Cost of Coal: Coal Dust Storms" cites research from scholars in China that frequent dust storms in the country also carry high amounts of potential toxins found in coal ash, such as arsenic, lead, and sulfur compounds. Levels have been steadily rising, suggesting it is due in part to the increase in coal plants and the lack of regulations around the disposal of coal ash.

Clean Coal, Synfuels and Carbon Capture and Storage

The Chinese government has pushed the development of a large coal-to-liquids and carbon capture and storage (CCS) industry. According to a September 2010 speech by Du Minghua, Deputy Director of China Shenhua CTL (Coal-to-Liquids) & CTC (Coal-to-Chemicals) Research Institute, China so far has finished construction on 8 pilot "clean coal" conversion projects. Annual coal-to-liquid capacity stands at 1.68 million tons, coal-to-gas 15 billion cubic meters, and coal-to-olefin 1.7 million tons.[73] China has also started construction of four pilot coal-to-gas projects in Inner Mongolia, Liaoning, and Xinjiang, due to become operational from 2011 to 2013, with output of 15.1 cubic meters per year. China National Offshore Oil Co. (CNOOC) intends to invest up to 100 billion yuan on a coal-to-gas project in Shanxi with annual output of 10 billion cubic meters in the coming five years, according to the company's general manager, Fu Yucheng.[74] According to Wang, "China should better use coal-produced liquid fuel and chemical products to make up for the shortage of oil."[73]

GreenGen

In December 2007, the Huaneng Group, a power producer based in Beijing, partnered with Peabody Energy to develop the GreenGen project, a coal-fueled power plant to employ partial carbon capture and storage (CCS).

In October 2008, three years after the opening of its Beijing office, Peabody Energy announced an estimated $2.5 billion project to pursue a large-scale coal mine and coal-to-liquids plant in Inner Mongolia. The plant, which would convert coal into methanol, would be developed by a group that includes Peabody, Inner Mongolia Jitong Railway Group Ltd., and the Chinese government. The mine would produce 10 to 20 million tons of coal per year. The project is a first for an American coal company in China.[75]

First commercial scale Coal-to-Liquids plant

A Shenhua Group subsidiary is building the country's first commercial-scale coal-to-liquids (CTL) plant, scheduled to be operational in 2008, in the Inner Mongolia Autonomous Region.[76] The plant in Erdos will burn coal to make, at the outset, a little over 1 million metric tons per year of diesel and other petrochemicals.[77] In early June 2010, it was announced that the Shenhua Group would start operating the plant by the end of year. The U.S.$1.5 billion project is expected to capture 100,000 tons of carbon dioxide annually. The company stated that a facility capable of handling 3 million tons annually is being planned, but no timetable for construction has been set. The plant releases 3.6 million tons of carbon dioxide a year.[78]

Coal gasification plant canceled

On September 10, 2008, Datang Huayin Electric Power Company, Ltd and GreatPoint Energy announced they would partner to build a pilot coal gasification plant in the Guangdong Province of China.[79] Datang Huayin agreed to pay for design, construction, and initial operation costs, which was expected to be between one hundred million and two hundred million dollars.[79][80] Coal or petroleum coke would have been used as feedstock, and the plant would have used 1,500 tons each day.[79]

Datang Huayin is a subsidiary of China Datang Corp. and is one of the largest single polluters on Earth.[79][80] In 2007, Datang Huayin generated 11.4 billion kilowatt-hours of electrical power.[79] At the time of the agreement, the companies planned for follow-up projects, including a commercial facility in Inner Mongolia.[79]

GreatPoint Energy is a coal gasification company based in Cambridge, Massachusetts. GreatPoint currently has two pilot gasification plants in the United States, and has also made deals with Peabody Energy and Dow Chemical Company.

Construction on the Datang's full-scale plant in Inner Mongolia - what would have been the first coal gasification plant in China - began in the last week of August 2009.[81] Plant construction costs were estimated at $3.7 billion (£2.3 billion).[81] The location for the plant was the city Chifeng of Inner Mongolia.[81] The plant would have used gasification technology developed by GreatPoint Energy and required about 725 tons of coal each day.[81] The synthetic gas was to be piped over 230 miles to Beijing.[81] Datang was covering the majority of costs, with additional funds coming from Beijing Gas Group (a gas distributor) and New Horizon Capital (a private equity fund company in Hong Kong).[81] Datang also planned to use the plant to make synthetic liquid oil.[81]

On December 4, 2009, Datang announced the company decided to cancel its plans to build the demonstration facility "due to the low return rate after pre-feasibility studies."[82]

Shenhua Coal-To-Liquids output may quadruple by 2015

It was announced in late November 2010 that Shenhua Group, China’s sole producer of liquid fuels from coal, may more than quadruple its output to 3 million metric tons annually by 2015 compared with 2010 to help meet demand from the country's growing economy.[83]

China to increase syngas production

In a December 2010 report, China said it may meet a quarter of its natural gas demand by gasifying domestic coal. Such domestic coal gasification capacity may be about 50 billion cubic meters by 2015 based on plans by companies including China National Offshore Oil Corp. and the Shenhua Group. Gas consumption may reach 200 billion cubic meters by 2015, from 89 billion in 2009. China’s demand in 2015 may be met by 120 billion cubic meters from domestic conventional sources and the rest by imports and unconventional deposits. Datang International Power Generation is spending more than 50 billion yuan ($7.5 billion) on coal gasification in plants in Inner Mongolia and Liaoning.[84]

Peabody and Chinese companies to pursue clean coal project

In January 2011 it was announced the U.S. based Peabody Coal, China Huaneng Group and Calera Corporation agreed to pursue the development of a clean coal project in the Xilinguole Region of Mongolia. The energy project would include a 1200 MW coal-fired power plant. The proposed plant would seek to capture a portion of carbon dioxide (CO2) and convert it into green building materials, advancing carbon capture technology. The plant would be fueled by a 12 million tonne per year surface mine operated by Peabody Coal.

It was stated that China Huaneng would serve as the power plant operator. Calera would use its technology to convert CO2 into solids that can be used as cement building materials. As of 2011, engineering plans were underway, with more announcements to come later in the year.[85]

Health Impacts of China's Reliance on Coal

China’s citizens suffer significant health threats from coal related pollution. Approximately one-third of China’s urban population lives with severely polluted air. The three most polluted cities in China are in the Shanxi province, the country’s biggest producer of coal and provider of half of the world’s coke supply. In 2003, the Chinese Academy of Environmental Planning estimated that 300,000 people suffer premature death each year due to the effects of air pollution.[86] In 2005 Chinese environmental experts projected that annual deaths caused by outdoor air pollution would reach 380,000 in 2010 and 550,000 in 2020.[86] In 2007, the World Bank completed a study with SEPA, China's national environmental agency, which estimated annual premature deaths caused by air pollution at 350,000 to 400,000. After protests by the Chinese government, the study's results were not published.[86]

Air Pollution

Living in China's coal heartland.

Average air quality in 45 major cities was rated as "poor" in the first half of 2011, according to statistics.[87] A 2011 study published in the peer-reviewed Natural Hazards estimates that air pollution from industrial fossil-fuel combustion (sulfur dioxide and particulate matter 10) caused 370,000 deaths and a million hospital admissions in 2007, with industrial air pollution costing the Chinese economy 3% of GDP, 43% of which (250 billion Yuan) was due to pollution from coal-fired power plants (the Value of Statistical Life used for China is lower than in industrialized countries - 410,000 Yuan/life, or $65,000 USD).[88]

In March of 2013, readings near Tiananmen Square in Beijing measured the concentration of PM2.5—fine particles in the air that are smaller than 2.5 micrometers in diameter and are considered dangerous because they tend to penetrate the gas exchange regions of the lungs—at 469 micrograms per cubic meter, which corresponds to a U.S. EPA Air Quality Index reading of 479 (the scale stops at 500). Anything above 301 is considered “hazardous” in that it can cause “serious aggravation of heart or lung disease and premature mortality in persons with cardiopulmonary disease and the elderly,” and there is a “serious risk of respiratory effects in general population.” The PM2.5 levels in other famously polluted cities pale in comparison to those in Beijing; for instance, the highest PM2.5 level in a 24-period recorded in Los Angeles was 43 micrograms per cubic meter. The poor air quality, according to a leading Chinese public health expert, is worse than SARS because nobody can escape it. Research suggests that air pollution can “raise the risk of cardio-respiratory death by 2 to 3 percent for every increase of 10 micrograms per cubic meter of pollutants.” Only 1 percent of China’s 560 million urban residents breathe air considered safe by the European Union, according to a 2007 World Bank study. A report released by China’s Ministry of Environmental Protection in November 2010 showed that “about a third of 113 cities failed to meet national air standards.” [89]

Carbon dioxide:

CO2 emissions 1980-2009

In 2001 China’s carbon emissions from coal use constituted about 10% of world CO2 emissions, which totaled 23,899 million metric tons.[90] The Kyoto Protocol has called for a decrease of 483 million tons of worldwide carbon emissions by 2012, but by then it is expected that coal plants in China will increase CO2 emissions by 1,926 million tons, or over four times the proposed reduction.[91] China’s annual carbon emissions surpassed U.S. emissions in 2007, with three-fourths of these from coal; however, China's per-capita emissions were one-fifth of the U.S per-capita emissions.[92]

China surpassed the U.S. in carbon emissions in 2007, according to the U.S. Department of Energy. China released 6.533 million tons of carbon dioxide in 2008, compared with 5.832 million for the U.S. According to head of the National Energy Administration’s general office Zhou Xi'an, the IEA’s data are “not very credible": “When the IEA came to China to publish its energy outlook a couple of days ago, they also over-estimated China’s energy consumption and carbon dioxide emissions. We think that’s because of a lack of knowledge about China, especially about China’s latest developments of energy conservation and renewable energy."[56]

Adding to emissions from coal-fueled plants, industry, and household use, coal mine fires burn about 200 million tons of coal each year in China. This results in an estimated additional 360 million metric tons, or 2-3% of total global output, of CO2 emissions annually. In the Xinjiang province of China, local miners using abandoned mines for shelter may intentionally set fires for heat, and elsewhere waste coal piles and natural coal seams are sometimes accidentally ignited by landscape clearing practices used in farming.[93]

Mercury: China is currently the world’s largest emitter of mercury, largely as a byproduct of coal burning.[94]

Sulfur dioxide and acid rain: Less than 15% of China's coal plants have desulphurization systems, or scrubbers; sulfur dioxide is a large contributor to acid rain.[95] In 2008, approximately 22.5 million tons of sulfur were released in 2004, and over 30% of the country now experiences acid rainfall.[96][1]

Smog: On December 5, 2011, Beijing authorities cancelled hundreds of flights and shut motorways as thick smog descended on the Chinese capital, reducing visibility at one of the world's busiest airports. Air quality in Beijing reached "hazardous" levels, according to the US embassy, which conducts its own measurements, while the official Xinhua news agency said pollution was likely to reach "dangerous" levels. By the middle of that afternoon, Beijing's main airport -- the second busiest in the world by passenger traffic -- had cancelled 233 domestic and 17 international flights. Another 400 flights were cancelled on Sunday.[97]

Soot: In November 2011, the NY Times reported that many top leaders in China have work buildings and homes that are filtered by high-end, air-purifying devices. That month, readings from the United States Embassy’s rooftop air monitoring device in Beijing repeatedly registered unsafe levels of particulate matter in the city. Those readings, posted hourly on Twitter or aniPhone app, have prompted a public debate over whether the Chinese government is purposely obscuring the extent of the nation’s air pollution. Unlike the American Embassy readings, Chinese environmental officials do not publicly release data on the smallest particulates, those less than 2.5 micrometers, which are considered most harmful because they are able to penetrate the lungs so deeply. Instead, government data covers only pollutants larger than 10 micrometers.[98] The World Health Organization considers a safe level of exposure to particulates less than 2.5 micrometers to be 25 micrograms per cubic meter. Certain districts of Beijing have more that 900 micrograms per cubic meter of these particulates.[99]

Particulate matter: A 2013 PNAS study, "Evidence on the impact of sustained exposure to air pollution on life expectancy from China’s Huai River policy," found that increases in total suspended particulates from coal use in Northern China may have cut the life expectancy of 500 million people there by 5.5 years on average, as compared to those in southern China where less coal is used.

Increased cancer rates

In May 2011, it was reported that cancer was now the leading cause of death in China. Chinese Ministry of Health data implicated cancer in close to a quarter of all deaths countrywide, in both wealthy cities and rural areas. The Earth Policy Institute wrote that: "Reports from the countryside revealed a dangerous epidemic of “cancer villages” linked to pollution from some of the very industries propelling China’s explosive economy." More than 450 “cancer villages” have emerged across China in recent years, according to an analysis by geographer Lee Liu published in Environment magazine in 2010. These communities—where an unusually high number of residents are struck by the same types of cancer—tend to cluster in poorer areas along polluted waterways or downstream from industrial parks. Whereas much of China’s early industrial development took place along the coast, factories more recently have been locating where labor is cheaper and environmental oversight is less strict, pushing the so-called “cancer belt” inland.

Lung cancer was the most common cancer in China. Deaths from the typically fatal disease shot up nearly fivefold since the 1970s. In China’s rapidly growing cities, like Shanghai and Beijing, where particulates in the air are often four times higher than in New York City, nearly 30 percent of cancer deaths are from lung cancer. In rural areas, liver, lung, and stomach cancers each account for close to 20 percent of cancer mortality. Liver cancer is more than three times as likely to kill a Chinese farmer as the average global citizen; for stomach cancer, rural Chinese have double the world death rate. These cancers are linked to water polluted by chemicals and sewage, along with other environmental contaminants.

Government data indicate that half of China’s rivers and more than three out of every four lakes and reservoirs are too polluted for safe drinking, even after treatment. Nevertheless, they remain a primary source of water for many people. For villages once largely self-sufficient, the poisoning of their water and soil is often devastating.

The Earth Policy Institute went on to say that: "It is easy to point a finger at unscrupulous industries and government officials willing to look the other way, but some responsibility for China’s unhealthy environment originates outside the country’s borders. Waste is frequently loaded up in container ships overseas and delivered directly to China. More insidiously, Western consumers lapping up artificially cheap “made in China” components and products have outsourced pollution to this factory for the world."[100]

The 2012 Cancer Registry Annual Report revealed that lung cancer is top among all types of cancer in terms of the number of cases and deaths in China. Indeed, the number of lung cancer-caused mortality in China has increased by 465 percent in the past three decades. In Beijing, the number of lung cancer patients has increased by 60 percent in the last ten years.

For years, public health experts considered smoking the leading risk factor of lung cancer. Yet a recent report prepared by some prominent Chinese public health experts and economists did not find any significant change in China’s overall smoking rate over the last decade. A group of scientists analyzed historical records of aerosol particles and lung cancer incidence in Guangzhou and found that a dramatic increase in the occurrence of air pollution from 1954 to 2006 was followed by a large increase in the lung cancer incidence rate despite the drop in the overall smoking rate. It was found that 750,000 Chinese die prematurely each year, primarily because of air pollution in large cities. According to more recent estimates by Greenpeace and Peking University’s School of Public Health, exposure to PM2.5 contributed to more than 8,500 premature deaths in Beijing, Shanghai, Guangzhou, and Xi’an in 2012 alone.[101]

Subsidence of mined areas

In early 2011, the local government of the Shanxi province reported that excessive coal mining had made an area of 8,000 square miles, roughly the size of Wales, unstable and dangerous. Shanxi Huang Jia Po is a village of about 500 farmers who have lived there for centuries, but the children of the farmers will most likely have to live somewhere else. At Liulin, 94 families have already abandoned their homes and moved down the mountain after their farmland sheared away beneath them from subsidence. Soon, they will have to leave their new homes as well. For the villagers of Pangpangta it is already too late: at the beginning of June 2011, when the villagers were out working in the fields, more than 200 houses collapsed. Of the 700 people who lived in Pangpangta, 500 have left. The remaining villagers are too old and too poor to leave and have now moved into the dormitories that used to house the miners.[102]

Water use

Coal vs. Water

According to a 2013 World Resources Institute analysis, more than half of China’s proposed coal-fired power plants are slated to be built in areas of high or extremely high water stress. If these plants are built, they could further strain already-scarce resources, threatening water security for China’s farms, other industries, and communities.[103]

International Effects of Chinese Coal Use

Air Pollution

China’s coal-produced air pollution also reaches beyond its borders to Korea, Japan, and even the United States.[1]

In December 2011, the Scripps Institution of Oceanography said its research suggested that pollution from central Asia affects the intensity of winter storms in California's Sierra Nevada, which provides drinking water. Two storms were measured during February and March 2009, the latter of which deposited 1.4 times as much precipitation as the first. The clouds in each storm contained a mix of particles that had originated in Asia. An analysis of the particles contained in the first storm revealed large quantities of potassium and other elements that created by the burning of biomass such as wood and grasses. The aerosols contained in the second storm comprised iron, titanium and other elements typically sent airborne by dust storms in central Asia. Thus the second 2009 storm transporting Asian dust to California created more precipitation than the other Asian storm dominated by soot from biomass burning.[104]

In July 2013, A controversial study published by the National Academy of Sciences, suggested that the life expectancy in North China has been years lower than the life expectancy of those in Southern China. Air pollution from coal-fired heating was 55 percent higher in the North than in the South. A study analyzed pollution and mortality information for 90 cities between 1981 and the year 2000. This study found that 500 million residents north of the Huai River lost more than 2.5 billion life years during the 1990s, or 5.5 years on average. However, Chen Yuyu, a professor with the Guanghua School of Management stated in an interview that the results had been taken out of context by some journalists. "It's indisputable that people's life expectancy has been increasing thanks to economic development and improvements in other aspects. It's just that it could have increased more were it not for air pollution," said Chen. Long-term exposure with an increase of 100 micrograms of particulate matter per cubic meter in TSPs will lead to a three-year decline in life expectancy, the findings suggested. Chen was hopeful that this study could help the government to assess the pressing issue of health inflicted by environmental pollution and to come up with more forceful legislative and administrative measures.[105]

Economics

China’s demand for coal has driven global coal prices higher, and at the beginning of 2007 coal prices nearly doubled as China imported more coal than it exported for the first time.[9]

Many carbon-intensive industries in the U.S. are moving to China because of the less stringent environmental codes, cheap labor, and vast coal resources.[9]

In May 2011 it was reported that China's state-owned utility companies were defying government economic planners by deliberately holding back the amount of electricity they produced. The power companies said they would face financial ruin if the government continues to tightly limit the prices they can charge consumers. The chairwoman of one giant utility, China Power International, said that one-fifth of China’s 436 coal-fired power plants could face bankruptcy if the utilities cannot raise rates.[106]

Chinese coal projects outside China

Chinese mining, power, and construction companies are involved in a number of overseas projects in Bangladesh, Bosnia and Herzegovina, Burma, Cambodia, Canada, India, Indonesia, Iran, Malawi, Malaysia, Mongolia, Pakistan, Romania, Russia, Serbia, South Africa, Tanzania, Turkey, the Ukraine, the United States, Vietnam, Zambia, and Zimbabwe. For details, see International Chinese coal projects.

Coal Mining

The changing face of China's coal industry.

There are an estimated 23,000 coal mines in China. China's coal mining industry has the world's worst safety record, with coal mines in China responsible for 80% of mining deaths worldwide. In 2005, 5,986 mine workers were killed in China, compared for example, to 47 in the United States.[107] Since 2006, a year in which 4,746 mine workers were killed, the Chinese government has shut down thousands of small, often illegal mines in an effort to increase safety. The number of miners killed in 2007 dropped by one-fifth, however China still led the world in mining fatalities with 3,786 deaths.[108][109] The coal mining industry in China is divided among large state-owned mines, local state-owned mines, and thousands of smaller town and village mines. In February 2006, the NDRC began restructuring the coal sector towards the goal of shutting down all small coal mines by 2015, and establishing five or six large state-owned conglomerates. According to one industry report, in 2005 only 2,000 of China’s 28,000 coal mines were state-owned. Many thousands of these mines rely on outdated equipment and are inefficiently managed, contributing to both increased pollution and dangerous working conditions. One-fifth of the mines are illegal, and it is estimated that the Chinese government has shut down between 20,000 and 50,000 small coal mines in the past several years.[110] While the central government continues to crack down on illegal mines, the great demand for coal by China’s power plants, economic growth rates, and the remote locations of many of the mines challenge the government’s ability to control the construction of both illegal mines and plants.

In April 2009, the Ministry of Land and Resources announced that it would not issue any new coal mining licenses until 2011 due to lagging demand for electricity and coal. The decision extends a 2007 ruling aimed at cutting coal output. While the ban was scheduled to end in 2008, the economic slowdown has resulted in an excess of coal production capacity.[111]

A report in UK's Telegraph in September 2011 reported that three million people lived on grounds that could collapse at any moment due to extensive coal mining taking place underneath their homes and communities.[112]

History

According to Dr. Syd S. Peng in Understanding the Chinese Coal Industry, coal production in the area was insignificant until the People’s Republic of China was established in 1949: "From 1949 to 1980, the national strategic mines were established to mine coal under a planned economy in which production, sales, and pricing were strictly controlled, and production fluctuation was kept to minimum. In the early 1980s, economic reform and a more open policy brought about vibrant economic activity in all walks of Chinese life and demands for energy increased sharply. Consequently from 1980 to 1997, in addition to an accelerated production increase in national strategic mines, township mines were developed to meet demand. As a result, there were a total of 64,000 mines in 1997 of which 61,000, or 95.3%, were small mines."[25]

From 2000 to present, according to Peng, the coal industry has been re-organized and more centralized, with larger coal production groups formed and small and medium coal mines consolidated. Township mines in particular were consolidated with larger national strategic mines under government guidance. By 2010, China had about 15,000 mines of which 12,000 mines produce less than 300,000 mt annually. In 2008, there were 268 mines producing 836 million mt and accounting for one third of the total production. Among them, 25 extra-large companies produced more than 30 million mtpy. Another 14 conglomerates or groups of extra-large coal mines have been under construction.[25]

Coal mine types

Coal mines in China are traditionally grouped into three types: national, provincial national, and township mines. National strategic mines are mines developed and operated directly by the central government under the original planned economy. In recent years, consolidated small mines have been included. There are a total of 268 national mines located in 22 provinces. In 2008, their production accounted for 50.7%. Provincial national mines are mines developed and operated directly by the 26 provincial governments in which the mines are located, and in recent years the consolidated small mines have been included. In 2008, their production accounted for 12.7%. Township mines are those developed after coal markets opened in 1980 and operated by the county and city governments in which the mines are located or by private citizens. They are located in 26 provinces and in 2008, their production accounted for 36.6%.[25]

This type of classification of mines was only valid before the Ministry of Coal Industry was abolished in 1997. Thereafter, control and operation of all types of mines was transferred to the provinces. As of 2010, only two large groups of mines are controlled directly by the central government, Shenhua and China Coal, while many provincial national mines have been transferred to township and/or private contractors.[25]

In 2008, underground mining accounted for 85.9% of total production, open-pit mining 6%, and other types 8.1%. There are more than 20 different underground coal mining methods in China, almost exclusively longwall mining.[25]

U.S. L&L Energy buys DaPing coal mine

In March 2011, U.S.-based L & L Energy - which has coal mining and distribution businesses in China - announced that it has entered into a contract to acquire a majority controlling interest (60%) of the DaPing coal mine, located in PanXian, Guizhou Province in China. The mine currently produces approximately 150,000 metric tons per year (mtpy) of low-sulfur metallurgical coal and is expanding to 300,000 mtpy, which is expected to be completed in 2012. Under the agreement, L&L and the current owner of DaPing will form a U.S. joint venture company in China. L&L will contribute approximately $18 million in exchange for management control and 60% equity of the new joint venture company on a net equity basis. An additional $3 million in capital expenditures is planned to be injected by L&L.[113]

Peabody Energy announces large coal project in China

It was reported in July 2011 that Peabody Energy would pursue a large coal mine project in China's western Xinjiang region in partnership with the local provincial government. Plans called for a surface mine that would produce 50 million metric tons of coal annually to feed China's energy needs, Peabody wrote in a joint statement with its partner, the government of the Xinjiang Uyghur Autonomous Region.

The mine plan was reported as being very ambitious, with an output forecast at around half the 105.8 million short tons that Peabody last year sold from its flagship North Antelope Rochelle Mine in Wyoming's portion of the Powder River Basin. The deal came as Peabody pursues coal projects in Mongolia and Australia that are likewise designed to serve unbridled demand in China, the world's largest energy user whose top energy source is likely to remain coal, even as the country expands its new energy industries.[114]

China closes 1,289 illegal coal mines

It was announced in August 26, 2011 that China was going to crack down on illegal coal mines in the country. Illegal mines were blamed for a large number of disasters in China and authorities stated they would shut down 1,298 such mines. The nationwide effort is designed to end illegal coal production. As of August 2011, 86 people had been arrested on criminal charges related to mine safety.[115]

U.S. based company to purchase stake in 14 China mines

It was announced on September 6, 2011 that L&L Energy signed letters of intent to buy 14 coal mines in southwestern China. L&L Energy stated the mines produce mostly coking coal used for steelmaking. The mines have been approved for combined annual capacity of 3 million tons and will yield about $500 million a year in revenue.[116]

Mongolian mine to go public

In September 2011 it was reported that Mongolia will be selling a stake in its Tavan Tolgoi coal deposit mining company to the public in 2012, raising more than $3 billion. The sale would be the nation’s largest IPO.[117]

Major financiers

The 2011 report, "Bankrolling Climate Change: A Look into the Portfolios of the World’s Largest Banks" by Earthlife Africa Johannesburg and BankTrack, researched the coal financing of 93 large banks and found that 53 were involved in financing the following companies in China: China Datang Group, China Guidian Group, China Huadian Group, China Huaneng Corporation, China Power Investment Corporation, China Resources Power, Guandong Yudean Group, SDIC, and Zhejiang (Provincial) Energy Group Company. All together, banks supplied these companies with over 21.2 billion Euro from 2005-2011. The top financiers were the China Construction Bank, the Industrial and Commercial Bank of China, Bank of China, China Merchants Bank, and the Agricultural Bank of China.[118]

Opposition to coal and government repression

For more see Opposition to coal in China.

April 2012: Chinese villagers riot over coal mine, killing 1 cop

In April 2012 it was reported that villagers in Southern Beijing with sickles and clubs protested against mining activities. Villagers gathered at a township government office in the Yunnan Province when violence erupted. They protested their concerns that activities at the coal mines could trigger geological disasters. The villagers camped out for several days with luggage and cooking utensils, threatening officials and damaging government property. The police had tried to persuade the villagers to leave before violence erupted. The protesters killed one officer and injured 15 others.[119]

October 2012: Chinese protesters clash with police over power plant

In October 2012 it was reported that Chinese protesters against the building of a coal-fired power plant in a southern Chinese town threw bricks at police who fired volleys of teargas and detained dozens in the country's latest environmental dispute. It was not clear what occurred first.

At least 1,000 people in Yinggehai, on China's Hainan island, began several days of protests after construction resumed at the plant, which had been halted by earlier demonstrations. Dozens had been injured and many were detained by police[120]

March 2012: Hainan residents protest new plant

On March 11, 2012, an estimated ten thousand residents of the southern Chinese island province of Hainan took to the streets of Ledong county in protest of plans to build a 1.9 billion yuan (U.S. $301 million) Yinggehai coal-fired power plant in their hometown. Protesters arrived at the venue for the March 12 opening ceremony kick-starting construction work on the plant, and closed their businesses as a strike against the plant. Local sources said some protesters also attacked local government buildings, clashing with riot police who were deployed to restore order. Online news reports related to the protest appeared on microblogs and chat rooms, but were quickly deleted. A Ledong county resident surnamed Mao said the villagers were afraid that the sea pollution caused by a coal-fired power plant would wipe out their fishing businesses and farmland.

Plans for the plant began in 2007, but did not receive approval from the National Resources Bureau in Beijing until November 2011. The plans were opposed by more than 8,000 local residents during a consultation exercise carried out by China Power's Hainan division in January 2012. An official at the Yinggehai township government offices said the government was trying to persuade the villagers to accept the project, and that it was "not likely" that the project would be stalled by the protests: "This is a project which has been ordered by the government at national level, so we will implement it regardless of how much resistance we meet."

A Yinggehai resident surnamed Hu told Radio Free Asia that the government had failed to take local people into account when making its plans: "They think they can implement any plans they like, but there is no benefit to us that will come from this at all. This project is just 900 meters (2,952 feet) from our homes."[121]

December 2011: Thousands protest new coal plant

China: 30,000 Haimen Residents "Occupy" Public Highway In Protest Of Coal-Fired Power Plants

On December 20, 2011, tens of thousands of residents in "a key economic area" of China’s southern Guandong Province gathered in the streets, occupying a highway to demonstrate against an existing coal plant and the development of a new coal plant near Shantou city. The residents say existing coal plants in the area are already fouling local air and water, making people sick and damaging their livelihoods. Police moved in with tear gas, according to CNN, who also said the protest was initially censored on Twitter by the Chinese government.

According to Climate Progress: "Each year, protests spring up to counter the construction of dirty coal plants. But this appears to be the biggest yet. Officials now say they will abandon plans to build a new coal plant in the area. Two people were reportedly killed in clashes with police, but the government is denying those reports."[122]

June 2011: Death sentence for Chinese coal truck driver in protester's death

On June 3, 2011 Chinese official stated the government and local agencies are addressing pollution concerns that sparked clashes leading to a wave of ethnic protests across Inner Mongolia. Vice Environment Minister Li Ganjie said that local governments and environmental protection agencies will hold companies accountable that break laws and regulations.[123]

On June 8, 2011 it was reported that a court in China sentenced a coalmine worker to death for killing a Mongolian herder named Mergen was killed while attempting to block a coal truck. The herder's death sparked protests across the northern Chinese region.

The co-driver of the coal truck was given a life term for his role in the killing of Mergen, which led to a series of protests in towns and cities across Inner Mongolia.[124]

It was reported that on August 25, 2011 that the truck driver who killed Mergen was executed by the Chinese government.[125]

May 2011: Protests against coal mining operations break out in Inner Mongolia

In May, 2011 China's Inner Mongolia began an overhaul of its mining sector, China's state media Xinhua reported, in an effort to quell ethnic Mongol anger over charges of resource exploitation and environmental damage. At the time the northern Chinese region launched a push to bring order to the rapid exploitation of its rich coal deposits. This accelerated mining activity sparked a wave of Mongol protests against the coal mining activities.[126]

The one-month campaign by China's Inner Mongolia mining sector was aimed at "ensuring the healthy, orderly, harmonious and green development of the coal industry" the region's coal mining bureau stated.[126]

The vast region saw significant demonstrations over a period of a week, sparked by the May 10, 2011 killing of an ethnic Mongol protester who had tried to block a coal truck driven by a member of China's dominant Han ethnicity. The protester named Mergen was a Mongolian herder. He was with about 20 other protesters at the time of his death as he tried to stop the coal truck driving across pastureland. Mergen was run over and dragged nearly 150m (490ft) before he died, officials said.[124]

Five days later, a forklift operator named Yan Wenlong was killed at a coal mine near Xilinhot after he and other locals clashed with company employees in a protest over pollution from the mine.[127]

The incidents led to protests across the region, which separates the rest of China from the Republic of Mongolia to the north and has traditionally been home to nomadic Mongol herders.[126]

It was reported that China moved swiftly to tighten security, including sealing off some restive college campuses, and residents in protest-hit areas have reported a tense calm had returned. However, hundreds of Mongols marched later in the regional capital of Hohhot on May 31, 2011, the US-based Southern Mongolian Human Rights Information Center stated.[126]

Southern Mongolian Human Rights Information Center said a protest march also took place on May 30, 2011. AFP reported that the coal industry crackdown would include stepped-up checks on all existing and future projects and require all proposed mines to first submit environmental impact statements, the Inner Mongolia coal bureau's notice was quoted as saying.[126]

December 2008: Citizen fighting coal mining sent to mental hospital

An investigative report released in December 2008 said that public security officials in the city of Xintai in Shandong Province had been institutionalizing residents who persisted in efforts to expose corruption or the unfair seizure of their property. In one case, a 57-year-old farmer seeking compensation for land ruined by a coal-mining operation, was seized by authorities in October on his way to petition the central government in Beijing. He was taken to the Xintai Mental Health Center in October. He was detained for 20 days, during which time he said he was lashed to a bed, forced to take pills, and given injections that made him dizzy and numb.[128]

November 2009: China families protest mine disaster

Relatives of miners killed by a gas blast in Heilongjiang and demanded answers from the owners on Monday, Novermber 23rd, 2009 as the fatality rate reached 204 people. They hoped to find more survivors. This protest came a day after 11 miners were killed in a blast in the southern province of Hunan. China has the world’s deadliest coal-mining industry, killing more than 3,000 people in mine floods, explosions, collapses and other accidents said a 2008 census. The day of the explosion, a gas detector had shown levels five times the trigger for an evacuation and the mine operators had failed to evacuate the mine. Around a dozen relatives of the workers gathered in the freezing temperatures to complain about that lack of information on the mine’s eneternce. One woman shouted "None of the officials have died, all of the dead are the workers, Not one of those officials has even been down into that mine." The protesters were taken inside the mine compound, put into large white vans or were stopped from speaking to reporters. This particular coal mine is owned by Heilongjiang Longmei Mining Holding Group, making it larger than most operations where accidents occur.[129]

Mining accidents

For more information and listing of accidents, see China coal mine accidents
Chinese coal mines are the deadliest in the world. According to official figures, at least 3,200 people died in China's mines in 2008.[130] The actual number could be even higher, as the Chinese government is suspected of covering up some accidents.[131] Most accidents are blamed on a failure to follow safety regulations, including adequate ventilation and available fire control equipment.[132] In 2009, China had the most mining accident fatalities in the world, with a total of 2,631 coal miners dying in accidents, according to an official figure released by State Administration of Work Safety,[133] which could be a conservative estimate.[131] Mining deaths jumped again in the first half of 2010. Coal mine deaths through June 2010 were 1,261, up from 1,175 in the same period in 2009.[134]

In 1997, the central government decided to abolish the ministries of several industries, including the Ministry of Coal, which oversaw coal worker safety. In 2005, the State Administration of Coal Mine Safety was established in its place, and is responsible for supervising coal mine safety at a national level. It is under the management of the State Administration of Work Safety (SAWS).[25]

July 2013: Four Officials Detained Over Mine Explosions

Four officials in Xinhua are being investigated for a coal mine blast that killed 53 people last spring. The four suspects were accused of failing to detect the company’s breach of safety regulations and they allowed for the mine to continue their operations under “dangerous conditions.” The blast that occured in in Jilin Province of Northeast China was one of the worst that has occured in recent years. There were two explosions, one on March 29, that killed 36 people at the Baobao Coal Mine in Baishan and a second explosion on April 1 killing 17 more people. Tonghua Mining Group continued to opperate these mines against the orders from the provincial government to hault opperations.[135]


Worker deaths by year

Year Number of accidents Deaths Death rate per
million tons of coal
2000 2,863 5,798 5.80
2001 3,082 5,670 5.11
2002 4,344 6,995 4.93
2003 4,143 6,434 4.00
2004 3,639 6,027 3.01
2005 3,341 5,986 2.73
2006 2,945 4,746 1.99
2007 3,770 1.44
2008 3,210 1.18
2009 1,616 2,631 0.89

Source: State Administration of Work Safety[citation needed]

China has reported major progress in reducing deaths in coal mines last year (SAWS chief engineer reported a 29.9 percent drop), however China's fatality rate was still about 18 times as high as the U.S. coal industry in 2011. 43 percent of major accidents in the past decade took place at illegal or unlicensed mines. Research by Kevin J. Tu, an energy expert and senior associate at the Carnegie Endowment for International Peace in Washington, has found that some provinces exceed their government-assigned production limits by as much as 18 percent. In a 2011 paper for Stanford University, Tu also reported that annual provincial figures for coal production have topped national totals by over 500 million tons. The surplus is suspected to be part of an illegal coal trade. The official fatality figures may be off by similar margins, but without other sources of information, it is impossible to tell. Improvements in death tolls and fatality rates are evident, but the claims of a near 30-percent drop in one year may be at the limit of credibility. [136]

Global corporations, coal, and China

British Petroleum's future projects: coalbed methane in China

On July 14, 2010, China National Petroleum Corporation's PetroChina Co., the nation’s largest oil producer, announced it is working with BP to assess a “huge” coal- bed methane deposit in the northwestern province of Xinjiang, as companies intensify the search for unconventional energy. Tuha Oilfield Co., a unit of PetroChina, and BP’s technical experts have carried out initial studies of the geological conditions at the Shaerhu block and completed preparatory work. Coal-bed methane, gas in shale, and tight gas held between rocks are collectively known as unconventional gas resources. PetroChina plans to accelerate production of gas found on the surface of coal in the next decade to meet domestic demand, and annual output may exceed 10 billion cubic meters by 2020, compared with a projected 4 billion cubic meters by 2015. The work on the coal-seam gas deposit in the Tuha area is part of a “new stage of cooperation” between the companies on coal-bed methane: PetroChina said it would welcome cooperation with BP and has contacted the company to see if there was anything they could help with following the oil "spill" in the Gulf of Mexico.[137]

GE

In September 2011 Keith White, director of GE Energy’s coal gasification business in the United States stated, "We make a majority of our money in China today. They use their coal for quality high-end products." White said that leaders in Wyoming should continue their support of coal-gasification and keep in mind the need to expand to additional markets like plastics and other refined products. He noted that a high volume of coal in China is refined into liquid byproducts "such as naphtha, and other products that are the feedstock of plastics and the Chinese garment industry."[138]

On January 18, 2011, GE announced that it would be forming a "clean coal" technology joint venture in China with the Shenhua Group, a state-owned coal mining and energy company. The joint venture company will sell industrial coal gasification technology licenses, conduct research and development and develop facilities around integrated gasification combined cycle (IGCC).[139]

Peabody

In September 2010 Peabody Energy stated that exports of coal from the Powder River Basin in Montana and Wyoming will be central to its expansion goals. On March 1, 2011, Seattle-based SSA Marine announced it had entered into an agreement with Peabody Energy to export coal through the Gateway Pacific Terminal. In June 2011, Whatcom County officials announced that SSA must apply for a new permit for its proposed Terminal.[48]

In January 2011, Peabody Energy announced two partnerships with Chinese energy companies to build coal mines near newly planned power plants in China. China Huaneng Group, the largest power generator in China, and California-based Calera Corp., agreed to develop a 1,200-megawatt power plant and adjacent coal mine in China's Inner Mongolia. Peabody would operate the surface mine.[140]

On July 11, 2011, Peabody Energy announced the company’s partnership with the government of the Xinjiang Uighur Autonomous Region and Communist Party on a plan to develop a surface coal mine in China that will produced 50 million tons of coal a year “over multiple decades.”[141]

Arch Coal and Ambre Energy

Ambre Energy and Arch Coal have proposed a terminal for Longview, Washington - the Millennium Bulk Logistics Longview Terminal - to export coal to Asia, mainly China.[45] In January 2011, Arch Coal acquired a 38 percent interest in MBT "for $25 million plus additional consideration upon the completion of certain project milestones." Arch said it aims to commence exports through the new terminal to Asia in 2012.[142]

In early March 2011 MBT CEO Joe Cannon stated that the firm would withdraw consideration of the coal export proposal from its initial application and seek approval for it separately since "it's clear there's been a lot of controversy. Our view is OK, we'll pull back and do an [environmental impact statement] that everyone can participate in, so everyone gets their full innings on the issue of coal."[143]

In May 2011 Arch Coal announced that it was establishing a new subsidiary, Arch Coal Asia-Pacific Pte. Ltd., and named Renato Paladino president. A press release stated that Paladino will be responsible for Asia-Pacific regional business development, marketing and sales of thermal and metallurgical products, and regional supply chain expansion for the company. The new office will be located in Singapore.[144]

Transportation of Coal

Most coal in China is mined in the less populated western and northeastern regions. The population is concentrated in the southeastern coastal areas. Coal transportation relies on railroads, trucks, inland waterways and offshore shipping. In 2008, railroads handled roughly 60% of the total production, inland waterways and offshore shipping 30%, and trucking 10%. Despite the recent completion of many railroads, coal transportation to the consuming areas, especially to the southeastern coastal areas, remains very tight.[25]

Shen Neng 1 coal carrier collision with the Great Barrier Reef, Australia

Raw Video: Oil Leak Threatens Great Barrier Reef

On April 3, 2010, Chinese-owned bulk coal carrier named Shen Neng 1 rammed into the Great Barrier Reef in Australia, the planet's largest coral reef and selected as a World Heritage Site in 1981. The reef is more than 1,200 miles long and comprises more than 3,000 individual reefs, cays, and islands, providing a habitat for countless sea species. The 700 foot vessel was hauling more than 65,000 tons of coal, and hit the reef at full speed in a restricted zone of the marine park, rupturing the vessel's fuel tanks and prompting Australian officials to activate a national oil spill response plan. Besides physical damage to the reef, the greatest threat to the reef was signs of leakage of the roughly 300,000 gallons of heavy low-grade fuel oil the vessel carries to run its engine. The fuel oil is a byproduct of oil production that is used by many cargo ships because it is cheap, but also full of contaminants and very gooey, making it dangerous for animals and hard to clean up. A light aircraft was seen spraying a chemical dispersant on the spilled oil. [145]

The Australian Transport Safety Bureau said it would be conducting a full investigation of the incident.[145] The Chinese freighter was in a no-shipping zone, and the owners of the ship could face a fine of $1 million if found to have violated Australia's shipping laws. It is possible that the Captain was attempting to make his voyage shorter by taking a short cut through the reef. Critics say commercial ships are supposed to be monitored by Australian authorities, but the monitoring is weak. The Australian group World Wide Fund for Nature (Australia) claims the Chinese company that owns the ship, Shenzhen Energy, a subsidiary of the COSCO Group, has had three similar incidents occur during the past four years.[146]

Mitigation Efforts

The welfare cost of air pollution has been estimated to be between 3 and 8% of China’s GDP.[147] Other studies put the overall environmental impact of China’s pollution problems between 5 and 15% of its GDP, almost exactly matching the figure of the country’s growth.[148] A study released by Greenpeace in September 2008 found that the external costs to China of using coal - including air and water pollution, ecosystem degradation, infrastructure damage, and human injuries and death - reached RMB 7.1 trillion in 2007, or about 7 percent of China's 2007 GDP. Each tonne of coal used in China, on average, caused environmental damages of RMB 150.[149]

Although the Chinese government has prioritized economic growth and tackling poverty ahead of environmental concerns for some time, there is growing acknowledgement of China’s coal related pollution crises. In addition to shutting down illegal plants, the government has banned the use of coal for heating and cooking in major cities such as Beijing and Shanghai, and is replacing coal-fired plants in urban areas with natural gas plants. By 2010, all new coal-plants must be fitted with devices that remove up to 95% of sulfur.[1] The government has also announced plans to cut its reliance on coal to 62% of its energy needs by 2030 and to 35% by 2050, in favor of natural gas, nuclear, hydro, solar and wind power.[150] In the meantime, new legal coal plants continue to be built, and for China to improve its emissions of global-warming gases and other pollutants, it must rely on new, more costly equipment and technology imported from other industrialized nations. A 2007 study found that increased energy efficiency in China could reduce the amount of energy consumed in the country by 40 percent, and that renewable energy could provide over 50 percent of China's energy needs.[151]

July 2009: Beijing closes coal plants

In July 2009, Beijing officials announced they were accelerating a plan to shut down smaller, less efficient coal-fired power plants. Because of a drop in demand for electricity, authorities were able to close coal plants totaling 7,467 generating units 18 months ahead of schedule. The closures are part of an effort to to improve energy efficiency and reduce demand for imported oil and gas. The closures are estimated to reduce sulfur dioxide emissions by 1.1 million tons and carbon dioxide emissions by 124 million tons each year.[152]

July 2010: Chinese Government Considers Cap on Coal Production

In late 2009, a plan announced by President Hu Jintao called for China to reduce its carbon emissions per unit of economic output by 40 to 45 percent by 2020, compared with 2005 levels. Even if China meets its energy-efficiency goal in 2010, however, and its carbon goal by 2020, the International Energy Agency forecasts the country's total carbon emissions are still on track to rise steeply in the next decade, due to factors including rapid growth in the Chinese economy, growing car ownership and rising ownership of household appliances.[153]

In late July 2010 the Chinese government announced they were considering whether or not to impose a cap on coal production in the country that would go into effect by 2015: “There must be a ceiling on coal output in the future, and energy needs can be met with new and renewable energy,” Wu Yin, a deputy director at the National Energy Administration, told the official China Energy News weekly newspaper in an interview. Wu didn’t specify any production targets.

China is world’s biggest producer and consumer of coal and wants 15 percent of its energy mix to come from non-fossil fuel sources by 2020, stated government officials. The Chinese government believes this will help them meet emissions targets by 2015. Currently coal makes up 70 percent of the country’s energy needs, but they want that number to drop to 65 percent by 2020.[154]

But surging production by heavy industry since winter 2009 has put in question China’s ability to meet the target. China’s energy consumption rose so sharply in winter that it produced the biggest surge ever of greenhouse gases by a single country. Power plants burned more coal to generate enough electricity to meet demand. According to the New York Times, as China has become increasingly dependent on imported oil and coal, its national security establishment has become more visibly involved in energy policy and energy security, including efforts to improve energy efficiency. Efficiency improved 14.4 percent in the first four years of the current plan, only to deteriorate by 3.6 percent in the first quarter of 2010, according to official statistics. Energy analysts said those statistics indicated improvement in efficiency in the second quarter that nearly offset the deterioration in the first quarter, although the government has not released separate figures for the second quarter.[153]

August 2010: China closes over 2,000 factories to lower energy usage

In August 2010, the Ministry of Industry and Information Technology quietly published a list of 2,087 steel mills, cement works and other energy-intensive factories required to close by Sept. 30, 2010 as part of China's energy reduction plan. The current Chinese five-year plan calls for using 20 percent less energy in 2010 for each unit of economic output than in 2005. The ministry said in its statement that the factories to be closed would include 762 that make cement, 279 that produce paper, 175 that manufacture steel and 84 that process leather. The factories were chosen after discussions with provincial and municipal officials to identify industrial operations with outdated, inefficient technology, the ministry said. The list of steel mills to be closed appeared to emphasize smaller, older mills producing fairly low-end grades of steel. Edward Meng, the chief financial officer of China Gerui Advanced Materials, a steel-processing company in central China’s Henan Province, said that the closing of such mills was consistent with the government’s broader goals of consolidating the steel sector and pushing steel makers into the production of more sophisticated kinds of steel.[153]

To prevent local obstruction, the ministry said in a statement on its Web site that the factories on its list would be barred from obtaining bank loans, export credits, business licenses and land. The ministry even warned that their electricity would be shut off, if necessary. The announcement was the latest in a series of Chinese moves to increase energy efficiency. The National Development and Reform Commission, the government’s most powerful economic planning agency, announced on August 6 that it had forced 22 provinces to halt their practice of providing electricity at discounted prices to energy-hungry industries like aluminum production. Energy analysts described the plant closings as a significant step toward the country’s energy-efficiency goals, but not enough by itself to achieve them.[153]

China to close old, small coal plants

As part of the Chinese government's five-year plan to address air pollution, "Notice of the General Office of the State Council about Forwarding Guiding Opinions on Pushing Forward the Joint Prevention and Control of Atmospheric Pollution to Improve the Regional Air Quality Developed by the Ministry of Environment Protection and Relevant Departments," the country is looking to: "Eliminate conventional thermal power generating units which have been operated for 20 years and whose capacity of each unit is less than 100 MW, various generating units whose service is up and whose capacity of each unit is less than 200 MW, and various coal burning units whose power supply standard coal consumption is 10 percent higher than average level of the province (autonomous region and municipality) in 2010 or 15 percent higher than national average level."[155]

The plan is a continuation of policy established in the previous five-year plan, which mandated the shutdown of old coal plants under 50 MW. In the past five years, China has shut down over 50 GW of older and smaller coal plants. Xue Jing, director of statistics and information at the China Electricity Council (CEC), said at an earlier conference that China will invest more in the power grid and clean energy, and gradually decrease the proportion of power plants that are coal-fired. Statistics from the CEC report show that in 2008, China’s investment in nuclear power and wind power increased 72 percent and 88 percent year on year, respectively. At the same time, investment in coal-fired plants declined 22 percent.[155]

Cap on carbon emissions

In August 2011, Reuters reported that Chinese officials had settled on a total energy cap of 4.1bn tonnes of coal equivalent (TCE) by 2015. Analysts warn that the plan has yet to be nailed down and that a cap could still be delayed by disagreements, to re-emerge in a later policy document. Another key issue will be whether the plan spells out targets for individual provinces on energy and carbon intensity.[156]

In May 2013 China introduced a five point plan to reduce emissions, including:[157]

  • Establishing pilot carbon emissions trading programs in five cities (Shanghai, Beijing, Shenzhen, Tianjin, and Chongqing) and two provinces (Guangdong and Hubei);
  • Capping total energy consumption at 4 billion tons of coal equivalent by 2015 (a non-binding target with no penalties in place yet for non-compliance);
  • Considering a tax on resources, including coal, in order to account for the external costs of coal;
  • Finalizing new emissions control limits for six heavily-polluting industries; and
  • Planning regional coal consumption cap pilots in regions such as Beijing-Tianjin-Hebei, the Pearl River Delta, the Yangtze River Delta and the Shandong city cluster.

China to spend $372 billion on cutting energy use, pollution

In August 2012 it was reported that China planned to invest $372 billion dollars into energy conservation projects and anti-pollution measures over the next three-and-a-half years. The goal is to cut energy consumption by 300 million tonnes of standard coal. A report from China's State Council, or cabinet, said the investments will take China almost halfway to meeting its target to cut the energy intensity 16 percent below 2010 levels by 2015. It was also reported that the government earmarked $155 billion of the money for projects that shrink energy use, however no information was given about what sectors would receive the funds.[158]

Coal regulations

2011: New standards for pollutants

In September 2011, China announced a new emission standard for thermal power plants for nitrous oxide and mercury, and tightening of sulfur dioxide and soot standards. The standards replace ones that were introduced in 2003, and will require emission reduction investments for new projects beginning 2012 and old power plants by mid-2014. About 260 billion yuan ($40.7 billion) needs to be invested on upgrading industrial facilities to meet the standards, the Ministry of Environmental Protection predicted.

Average air quality in 45 major cities was rated as "poor" in the first half of 2011, according to statistics.[159]

In November 2011, the NY Times reported that many top leaders in China have work buildings and homes that are filtered by high-end, air-purifying devices. That month, readings from the United States Embassy’s rooftop air monitoring device in Beijing repeatedly registered unsafe levels of particulate matter in the city. Those readings, posted hourly on Twitter or aniPhone app, have prompted a public debate over whether the Chinese government is purposely obscuring the extent of the nation’s air pollution. Unlike the American Embassy readings, Chinese environmental officials do not publicly release data on the smallest particulates, those less than 2.5 micrometers, which are considered most harmful because they are able to penetrate the lungs so deeply. Instead, government data covers only pollutants larger than 10 micrometers.[160]

In February 2013, it was reported that China will proactively introduce a set of new taxation policies designed to preserve the environment, including a tax on carbon dioxide emissions, according to a senior official with the Ministry of Finance (MOF). To conserve natural resources, the government will push forward resource tax reforms by taxing coal based on prices instead of sales volume, as well as raising coal taxes. A resource tax will also be levied on water.[161]

Air and water pollution, declining water levels lead to protests

Click here for photos of the environmental effects of coal mining in China.

Increasing Chinese air and water pollution, declining water levels in rivers and aquifers have led to protests against coal plants. At least some 10 billion cubic meters of water—equivalent to about one-sixth of the annual total water volume of the Yellow River—will be consumed by 16 new coal power bases in China in 2015, triggering severe water crises in the country’s arid Northwest, a new Greenpeace report claims. [162]

The World Bank estimates that China has 16 of the world’s 20 most-polluted cities. The burning of coal is the main source of air pollution. [163]

An estimated 40 percent of China's rivers and 90 percent of groundwater is polluted. [164]

According to the American Geophysical Union, some of the highest rates of groundwater depletion are in India and China. [165] Chinese and Indian Rivers are drying. Himalayan glaciers are among the fastest retreating glaciers globally due to the effects of global warming, and this will eventually result in water shortages for hundreds of millions of people who rely on glacier-dependent rivers in China, India and Nepal. [166]

Major Chinese pollution problems, much of it caused by coal, has sparked unrest. The number of environmental protests in China has increased by an average of 29 percent every year since 1996, while in 2011 the number of major environmental incidents rose 120 percent. Environmental pollution is one of three main factors driving popular protests in China. [167]

The 2012 Greenpeace report, "Thirsty Coal: A Water Crisis Exacerbated by China's New Mega Coal Power Bases," estimates that by 2015, the water demand of coal power bases in Inner Mongolia, Shaanxi, and Ningxia will either severely challenge or exceed the respective areas’ total industrial water supply capacity.

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