James G. Speight - Coal-Fired Power Generation Handbook

Table 1.7 Estimated Coal Reserves by Country (Energy information Administration, 2011).

Source: US Energy Information Administration, International Energy Outlook, September 2011.

Figure 1.4Energy Resources of the Earth (Speight, 2013).

Figure 1.5Resource and reserve terminology (Speight, 2013).

In addition, an issue which concerns the estimation of reserves, is the rate at which the coal is consumed. When considering the worldwide reserves of coal, the number of years that coal will be available may be more important than the total amount of coal resources. For example, the coal reserves may be estimated using the current rates of consumption, which may indicate that the world coal reserves should last more than 300 to 500 years. However, a large amount of additional coal is present in Earth but cannot be recovered using current technology and these resources, sometimes called geologic resources, are even more difficult to estimate, but may be much greater than the amount of proven reserves.

Thus, in the current context, the proven reserves ( proved reserves ) are those coal reserves that are actually found (proven), usually by drilling and coring. The estimates have a high degree of accuracy and are frequently updated as the mining operations proceed. However, even though the coal reserves may be proven, there is also the need to define the resources on the basis of what further amount of coal might be recoverable (using currently available mining technology without assuming, often with a very high degree of optimism) extravagantly, that new technology will miraculously appear or will be invented) and non-recoverable coal reserves will suddenly become recoverable .

If economic aspects are not considered, the term for the total technologically extractable amount of coal is the producible fraction , which is often confused with the proven reserves . The term proven reserves is further subdivided into proved developed reserves and proved undeveloped reserves . This should not be confused with unproven reserves , which are broken down into probable reserves and possible reserves – those reserves that only have a 10% likelihood of being recoverable.

These reserve categories can, as in the crude oil industry (Speight, 2011b, 2014), be cumulatively summed by the measures 1P, 2P, and 3P, which are inclusive, so include the previous safer measures as (i) 1P reserves – proven reserves consisting of both proved developed reserves plus proved undeveloped reserves), (ii) 2P reserves – consisting of 1P proven reserves plus probable reserves, and (iii) 3P reserves – consisting of the sum of 2P reserves plus possible reserves.

On the other hand, the estimated ultimate recovery of coal (or any resource) is the sum of the proven reserves at a specific time and the cumulative production up to that time.

The term inferred reserves ( unproved reserves ) is commonly used in addition to, or in place of, potential reserves . The inferred coal reserves are regarded as being of a higher degree of accuracy than the potential reserves and the term is applied to those reserves that are estimated using an improved understanding of seam structure (see Proven reserves – above).

In the United States, inferred reserves (reserve growth) include those resources expected to be added to reserves as a consequence of extension of known fields, through revisions of reserve estimates, and by additions of seams (or coal strata) in discovered coal domains. Also included in this category are resources expected to be added to reserves through application of improved mining techniques.

This category thus includes both the indicated reserves and the inferred reserves described in earlier United States Geological Survey assessment publications. Predictions of reserve growth may refer to coal fields found before a specified year and the analysis of reserve growth in discrete conventional coal accumulations is based on the definitions and reports of the United States Energy Information Administration (EIA). In summary, inferred reserves are assessed by preliminary exploration and are part of probable reserves – the level of their probability assessment is low.

Potential reserves ( probable reserves , possible reserves ) are the additional reserves of coal that are believed to exist in the earth. The data are estimated (usually from geologic evidence) but have not been substantiated by any drilling or coring operations. Other terminology such as probable reserves and possible reserves are also employed but fall into the subcategory of being unproven.

In summary, potential reserves are those contingent reserves that, as of a specified date, are potentially recoverable from known accumulations coal fields but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Potential reserves may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality.

One major issue in the estimation of coal (or for that matter any fossil fuel or mineral) resource is the all too frequent use of the term “undiscovered” resources. Caution is advised when using such data, as might be provided to “substantiate” such reserves, as they are very speculative and are regarded as many energy scientists as having little value other than being unbridled optimism. And perhaps, opportunism and/or charlatanism are being applied depending upon the resource under speculation and the potential market for the product.

The differences between the data obtained from these various estimates can be considerable but it must be remembered that any data related to the reserves of natural gas (and, for that matter, related to any other fuel or mineral resource) will always be open to questions related to the degree of certainty (Speight, 2104).

There are three important items that counteract the guesswork applied to undiscovered resources: (a) the actual discoveries of new coal reserves; (b) the development of improved mining technologies for already known coal reserves; and (c) estimates of the coal resource base that are derived from known resource properties where the whole of the resource is not explored.

It should also be remembered that the total resource base of any fossil fuel (or, for that matter, of any mineral) will be dictated by economics (Nederlof, 1988). Therefore, when coal resource data are quoted some attention must be given to the cost of recovering those reserves. And, most important, the economics must also include a cost factor that reflects the willingness to secure total, or a specific degree of, energy independence, including some serious consideration of the very real environmental aspects of coal usage.