The world market of fuel: coal, coke and briquettes; oil, oil products and goods similar to them

Date: 2015-10-07; view: 452.

Theme 6. Markets of energy resources: coal, oil and gas

1. The world market of fuel: coal, coke and briquettes; oil, oil products and goods similar to them.

2. The world market of fuel: natural and artificial gas; electric power. Features and problems of the modern markets of energy resources.

3. Organization of the countries of producers and oil exporters (OPEC). Main objectives and OPEC tasks.

Fuel is any material that stores potential energy in a form that can be practicably released and used as heat energy. The concept originally applied solely to those materials storing energy in the form of chemical energy that could be released through combustion, but the concept has since been also applied to other sources of heat energy such as nuclear energy (via nuclear fission or nuclear fusion), as well as releases of chemical energy released through non-combustion oxidation (such as in cellular biology or in fuel cells).

The heat energy released by many fuels is harnessed into mechanical energy via an engine. Other times the heat itself is valued for warmth, cooking, or industrial processes, as well as the illumination that comes with combustion. Fuels are also used in the cells of organisms in a process known ascellular respiration, where organic molecules are oxidized to release un-usable energy. Hydrocarbons are by far the most common source of fuel used by humans, but other substances, including radioactive metals, are also utilized.

Fuels are contrasted with other methods of storing potential energy, such as those that directly release electrical energy (such as batteries and capacitors) or mechanical energy (such as flywheels, springs, compressed air, or water in a reservoir).

Chemical fuels are divided in two ways. First, by their physical properties, as a solid, liquid or gas. Secondly, on the basis of their occurrence: primary (natural fuel) and secondary (artificial fuel). Thus, a general classification of chemical fuels is:

Coal (from the Old English term col, which has meant "mineral of fossilized carbon" since the 13th century) is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure. Coal is composed primarily of carbon along with variable quantities of other elements, chiefly hydrogen, sulfur, oxygen, and nitrogen.

Throughout history, coal has been a useful resource. It is primarily burned for the production of electricity and/or heat, and is also used for industrial purposes, such as refining metals. A fossil fuel, coal forms when dead plant matter is converted into peat, which in turn is converted into lignite, then sub-bituminous coal, after that bituminous coal, and lastly anthracite. This involves biological and geological processes that take place over a long period.

Coal is the largest source of energy for the generation of electricity worldwide, as well as one of the largest worldwide anthropogenic sources of carbon dioxide releases. In 1999 world gross carbon dioxide emissions from coal usage were 8,666 million tonnes of carbon dioxide. Coal-fired electric power generation emits around 2,000 pounds of carbon dioxide for every megawatt-hour generated, which is almost double the approximately 1100 pounds of carbon dioxide released by a natural gas-fired electric plant per megawatt-hour generated. Because of this higher carbon efficiency of natural gas generation, as the fuel mix in the United States has changed to reduce coal and increase natural gas generation, carbon dioxide emissions have fallen. Those measured in the first quarter of 2012 were the lowest of any recorded for the first quarter of any year since 1992.

Coal is extracted from the ground by coal mining, either underground by shaft mining, or at ground level by open pit mining extraction. Since 1983 the world top coal producer is China, in 2011 China produced 3,520 millions of tonnes of coal - 49.5% of 7,695 millions tonnes world coal production. In 2011 other large producers were United States (993 millions tonnes), India (589), European Union (576) and Australia (416).^[5] In 2010 largest exporters were Australia with 328 million tonnes (27.1% of world coal export) and Indonesia with 316 millions tonnes (26.1%), while largest importers were Japan with 207 million tonnes (17.5% of world coal import), China with 195 million tonnes (16.6%) and South Korea with 126 million tonnes (10.7%).

In North America, Central Appalachian coal futures contracts are currently traded on the New York Mercantile Exchange (trading symbol QL). The trading unit is 1,550 short tons (1,410 t) per contract, and is quoted in U.S. dollars and cents per ton. Since coal is the principal fuel for generating electricity in the United States, coal futures contracts provide coal producers and theelectric power industry an important tool for hedging and risk management.

In addition to the NYMEX contract, the IntercontinentalExchange (ICE) has European (Rotterdam) and South African (Richards Bay) coal futures available for trading. The trading unit for these contracts is 5,000 tonnes (5,500 short tons), and are also quoted in U.S. dollars and cents per ton.

The price of coal increased from around $30.00 per short ton in 2000 to around $150.00 per short ton as of September 2008. As of October 2008, the price per short ton had declined to $111.50. Prices further declined to $71.25 as of October 2010.

Coal (by liquefaction technology) is one of the backstop resources that could limit escalation of oil prices and mitigate the effects of transportation energy shortage that will occur under peak oil. This is contingent on liquefaction production capacity becoming large enough to satiate the very large and growing demand for petroleum. Estimates of the cost of producing liquid fuels from coal suggest that domestic U.S. production of fuel from coal becomes cost-competitive with oil priced at around $35 per barrel, with the $35 being the break-even cost. With oil prices as low as around $40 per barrel in the U.S. as of December 2008, liquid coal lost some of its economic allure in the U.S., but will probably be re-vitalized, similar to oil sand projects, with an oil price around $70 per barrel.

In China, due to an increasing need for liquid energy in the transportation sector, coal liquefaction projects were given high priority even during periods of oil prices below $40 per barrel. This is probably because China prefers not to be dependent on foreign oil, instead utilizing its enormous domestic coal reserves. As oil prices were increasing during the first half of 2009, the coal liquefaction projects in China were again boosted, and these projects are profitable with an oil barrel price of $40.

China is by far the largest producer of coal in the world. It has now become the world's largest energy consumer but relies on coal to supply about 70% of its energy needs. An estimated 5 million people work in China's coal-mining industry.

In 2006, China was the top producer of coal with 38% share followed by the United States and India, according to the British Geological Survey. As of 2012 coal production in the United States was falling at the rate of 7% annually with many power plants using coal shut down or converted to natural gas; however, some of the reduced domestic demand was taken up by increased exports.