Coal - July 2
by Staff
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... In short, China has encouraged rapid export-led economic growth as a way of putting off dealing with its internal political and social problems. Economic growth requires energy, and China's energy comes overwhelmingly from coal. The nation's short-term survival strategy thus centers on producing enormous quantities of coal today, and far more in the future. However, there are signs that China's domestic coal production growth may not be able to keep up with rising demand for much longer. ... China's furious pace of economic growth, which is often touted as a sign of success, may turn out to be a fatal liability. Simply put, the nation appears to have no Plan B. No fossil fuel other than coal will be able to provide sufficient energy to sustain current economic growth rates in the years ahead, and non-fossil sources will require unprecedented and perhaps unachievable levels of investment just to make up for declines in coal production - never mind providing enough to fuel continued annual energy growth of seven to ten percent per year. If and when China ceases to have enough new energy to support continued economic growth, there are likely to be unpleasant consequences for the nation's stability. If such consequences are to be averted, the country's leadership must find ways to rein in economic growth while reducing internal social and political tensions, meanwhile investing enormous sums in non-fossil energy sources. A serious attempt to reduce greenhouse gas emissions would entail an identical prescription. It is a tall order by any standard, but serious contemplation of the alternative-which, in the worst instance, could amount to social, economic, and environmental collapse-should be bracing enough to motivate heroic efforts.
... Due to higher coal prices the production cost of aluminium has increased, forcing smaller smelters operating at close to marginal costs to close, according to UBS. As a measure to provide more power for civilian use, authorities in some countries have curtailed power to energy-intensive industrial users like aluminium smelters, making less aluminium available to the market.
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