The imminent reality of peak oil production should be clear to all by now.

Now some very serious people are suggesting that there is a lot less accessible coal out there than most folks believe. If we are nearing peak coal (and peak oil), then we would need to embrace the rapid transition to a clean energy economy almost as urgently as we need to embrace it to avoid destroying the climate.

Let’s start with the U.S. Geological Survey’s stunning 131-page analysis from December, “Assessment of Coal Geology, Resources, and Reserves in the Gillette Coalfield, Powder River Basin, Wyoming” [big PDF]:

The Gillette coalfield, within the Powder River Basin in east-central Wyoming, is the most prolific coalfield in the United States. In 2006, production from the coalfield totaled over 431 million short tons of coal, which represented over 37 percent of the Nation’s total yearly production.

The “total original coal resource in the Gillette coalfield” without applying any restrictions, “was calculated to be 201 billion short tons.” Then USGS subtracts out the inaccessible coal, and then mining and processing losses, which leaves 77 billion tons, and finally:

Coal reserves are the portion of the recoverable coal that can be mined, processed, and marketed at a profit at the time of the economic evaluation. With a discounted cash flow at 8 percent rate of return, the coal reserves estimate for the Gillette coalfield is 10.1 billion short tons of coal (6 percent of the original resource total) for the 6 coal beds evaluated.

Ouch! And this analysis was done at a time of soaring coal prices.

The National Research Council’s Committee on Coal Research, Technology, and Resource Assessments to Inform Energy Policy wrote in a 2007 report:

Present estimates of coal reserves are based upon methods that have not been reviewed or revised since their inception in 1974, and many of the input data were compiled in the early 1970s. Recent programs to assess reserves in limited areas using updated methods indicate that only a small fraction of previously estimated reserves are economically recoverable.

The NRC, however, decided not to seriously downgrade the very optimistic estimates still out there, certainly not by as much as the 2008 USGS report suggests may be warranted. Its press release states:

It is clear that there is enough coal at current rates of production to meet anticipated needs through 2030, and probably enough for 100 years, the committee said. However, it is not possible to confirm the often-quoted assertion that there is a sufficient supply for the next 250 years.

The “probably enough” claim does not appear to be based on any rigorous analysis, and the Committee itself called for a major 10-year assessment effort.

The group Clean Energy Action will be coming out soon with a mine-by-mine assessment that has been reported to conclude we have far less than a 100-year supply, perhaps as little as 10 to 20 years. I will blog on that when it hits the streets.

The Energy Watch Group, an independent group of scientist who investigate energy issues initiated by a German member of parliament, published a 2007 study [PDF] that found the data on coal reserves around the country are very poor, but estimates appear to dropping, in some cases sharply:

The timeline analyses of data performed here suggest that on a global level the statistics overestimate the reserves and the resources. In the global sum both reserves and resources have been downgraded over the past two decades, in some cases drastically.

The most dramatic example of unexplained changes in data is the downgrading of the proven German hard coal reserves by 99 percent (!) from 23 billion tons to 0.183 billion tons in 2004. The responsible German administration1 did not publish any explanation, and thus the downgrading went unnoticed in spite of the intensive public debate of the future of coal production in Germany. The World Energy Council briefly notes in its “2004 Survey of Energy Resources”: “Earlier assessments of German coal reserves (e.g. end-1996 and end-1999) contained large amounts of speculative resources which are no longer taken into account”. Thus, large reserves formerly seen as proven have been reassessed as being speculative.

Also the German lignite reserves have been downgraded drastically, which is noteworthy because Germany is the largest lignite producer world-wide.

Poland has downgraded its hard coal reserves by 50 percent compared to 1997 and has downgraded its lignite and subbituminous coal reserves in two steps since 1997 to zero.

The Group has equally pessimistic conclusions about American coal reserves:

The USA, being the second largest producer, have already passed peak production of high quality coal in 1990 in the Appalachian and the Illinois basin. Production of subbituminous coal in Wyoming more than compensated for this decline in terms of volume and — according to its stated reserves — this trend can continue for another 10 to 15 years. However, due to the lower energy content of subbituminous coal, US coal production in terms of energy has already peaked 5 years ago — it is unclear whether this trend can be reversed. Also specific productivity per miner is declining since about 2000.

Right now, I’m not certain there is enough hard data to draw a firm conclusion on this issue. Also, the amount of economically recoverable coal in this country and around the world clearly depends on the price of coal, which, until recently, had been soaring.

If the nations of the world get serious about avoiding catastrophic global warming, then we will either need to start reducing global coal-use pretty sharply starting around 2020 (if your target is 450 ppm) or immediately (if your target is 350 ppm). Such sharp reductions, which must begin before coal with carbon capture and storage (CCS) is likely to be practical and affordable on a large scale (see here), would inevitably lead to sharp declines in the price of coal.

Of course, if coal and oil are near peak production levels, then we urgently need to jumpstart the transition to a clean energy economy to replace those fossil fuels — almost as fast as that urgent transition is needed to avoid catastrophic climate impacts. And if coal is near peak production levels, then CCS is obviously a much less useful and scalable climate solution.

Part 2 will look at the recent work of Caltech’s David Rutledge on peak coal and its implication for greenhouse gas stabilization efforts.

This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.