BP's 2011 Statistical Energy Review confirms that shale gas is the difference between coal booming or busting. Last year, coal boomed globally, reaching its highest share of global energy consumption since 1969, but it busted in North America.
Why the stark difference between coal's fortunes in North America versus the rest of the world?
Simply put, shale gas production is taking place almost exclusively in North America, and the result is intense competition between coal and natural gas for electricity generation market share in the USA. Elsewhere in the world, coal remains the unchallenged king.
Here is the key fact from 2011. Coal energy consumption declined in North America by about 5% but jumped globally 5.4%, despite the substantial North American decline. http://www.bp.com/sectionbodycopy.do?categoryId=7500&contentId=7068481.
Saying "No" to shale gas is saying "Yes" to rising coal consumption around the world. Like it or not, that's the fact, one that some environmental groups will not face. Only in North America is shale gas booming, where it now provides 37% of total gas supply, and only in North America is coal consumption falling.
In the USA, natural gas challenges the 100-year reign of king coal, with coal's share of electric generation falling from 52% in 2000 to 34% in March 2012.
Indeed, outside of North America, coal had an exceptionally good year, because it faces weak competition from natural gas.
Coal consumption accounted for 30.3% of global energy consumption in 2011, again its highest share since 1969. The big coal consumption reductions in North America, where shale gas is booming, were more than offset by a 9.7% increase in coal consumption in China and 3.3% increase in Western Europe. Yes, coal even had a good year in Western Europe.
Coal consumption grew much more rapidly than oil or gas usage, and coal grew substantially, even though wind and solar production skyrocketed around the world.
Where shale gas is not yet exploited or even prohibited, gas is very expensive, as much as $18 for spot LNG into Japan for example, making gas a weak competitor to coal in most markets. Not surprisingly, high gas prices mean good news for coal producers around the world.
A prime energy lesson of 2011, therefore, is that the absence or reality of shale gas production spells the difference between coal's best or worst of times. And since shale gas remains almost exclusively a North American energy source, 2011 was a very good year for coal in most of the world.