MuseLetter #189 / January 2008
by Richard Heinberg

MuseLetter #190 / February 2008
by Richard Heinberg

MuseLetter #192 / April 2008
by Richard Heinberg

Resilient Communities: A Guide to Disaster Management

Resilience: The ability to recover quickly from illness, change, or misfortune; buoyancy; the ability to absorb shocks.

The following is a proposal to help make communities better able to respond to the coming economic shocks from resource depletion, beginning with Peak Oil, and perhaps also to shocks from other causes (such as the ongoing subprime mortgage and credit collapse). In searching for a name for the strategy, I have settled on the phrase "Resilient Communities," which comes with considerable baggage—useful baggage in this instance. Once I have described and discussed the proposal, I will offer some background materials regarding the terms resilience and resilient communities, mentioning some other projects that have used the same title or that pursue similar goals.

Making existing petroleum-reliant communities truly sustainable is a huge task. Virtually every system must be redesigned—from transport to food, sanitation, health care, and manufacturing. Some fine efforts are under way in towns such as Kinsale, Ireland; Totnes, England; Portland, Oregon; and several cities in northern California to catalog the needed changes and initiate the transformative process. The Powerdown Project, Energy Descent Action Plans, and local Climate Protection initiatives are all important efforts in this direction. However, even in places that began such work two or three years ago, actual oil dependence remains largely unaffected. The transition that is required will take many years, huge shifts in both private and public investment, and fundamental changes in public policy at higher levels of government in order to succeed. Do we have enough time? Will the investment capital be available?

Meanwhile, global oil production appears already to have entered its plateau phase, with a gradually steepening decline in total production—and a much more rapid drop in export capacity among nations with any oil to spare—likely to commence within the next two or three years. It appears that the time available for adaptation is probably far too short to enable needed work to be accomplished. Meanwhile, the financial solvency crisis initiated by the US subprime mortgage fiasco threatens to obliterate trillions of dollars of investment capital, impeding whatever efforts might be undertaken toward energy conversion. Thus few if any communities—including those that have initiated worthwhile projects—will be prepared for the shocks of high fuel prices and fuel shortages that will inevitably follow in the coming years. What to do?

A few months ago, on the day following the most recent "Peak Oil and Community Solutions" conference in Yellow Springs, Ohio, some of the speakers and organizers gathered to compare notes and strategize. At some point during the lively conversation, Faith Morgan, the Director of the film The Power of Community: How Cuba Survived Peak Oil, reminded us how, early in Cuba's crisis period, organic farming advocates had provided crucial advice that helped quickly transform the nation's food system; without the input of these previously marginalized alternatives advocates, the nation probably would not have survived. I was certainly familiar with the story: I have recounted it in print and in lectures on many occasions. Nevertheless, as Faith spoke, a (compact-fluorescent) light bulb flickered somewhere in my murky skull. Perhaps something similar could happen in other nations or communities—and not just with regard to food, but all the other aspects of modern existence. There are plenty of marginalized "alternatives" advocates who for decades have been researching and promoting low-energy ways of doing things that will make perfect sense in a post-petroleum environment. What if these folks could be mobilized and coordinated, their knowledge made readily available to local officials and the public at large, in preparation for the imminent period when existing systems start to fail in ever more obvious ways?

The notion solidified as I read Naomi Klein's recent book, The Shock Doctrine, which details how savvy politicians and business leaders have used natural disasters, wars, and economic upheavals as propitious moments for the introduction of neo-liberal economic policies—privatization, free trade, slashed social spending—that are themselves disastrous (though immensely profitable for the few), and that would normally be rejected. In the current instance, as we contemplate a global mega-disaster-in-the-making, it is not difficult to envision neo-liberal or neo-conservative power-holders licking their collective chops over the prospect of doing away with all labor and environmental regulations as citizens everywhere clamor for strong leaders who can implement bold policies to restore relative normalcy.

In other words, crisis equals opportunity—for those who are prepared to seize the day. Unless sensible plans to manage disaster are formulated and put forward now, the opportunity afforded by crisis will be hijacked by a familiar cast of characters.

What follows, then, is a strategy to take advantage of the gathering storm to steer communities in a direction that will make them more sustainable over the long run. I must emphasize at the outset that, while I am making the case for this new strategy as strongly as I can (that's a writer's job), I do not wish people already hard at work on proactive energy transition strategies through Relocalization and Transition projects to get the impression that I am saying, "Stop everything you're doing now, rush to the other side of the boat, and start doing this other thing." In fact, all I hope to accomplish with this essay is to introduce a new strategic perspective that can be useful to activists as they continue and expand the work in which they are currently engaged.

Anyone can adopt this strategy; however, existing Peak Oil response groups and networks are probably in the best position to do so. Groups wanting to explore this strategy can join the Relocalization Network (www.relocalize.net), if they are not already affiliated, and use that network for sharing information and other resources. Groups could also link Resilient Communities work with the Transition Network (www.transitiontowns.org), Step It Up, Mayors for Climate Protection Campaign, Climate Action Network, and Sierra Club's Cool Cities program.

What is needed is not just another trademark for yet another activist campaign, but an additional strategy that can be used by any existing organization.

Try This

The strategy I am envisioning might be composed of the following series of steps:

1. Establish a working group for the purpose of formulating a Community Resilience Plan. The size of the group will depend on who is available and motivated, and on the size of the community. It will be helpful if the individuals involved have experience with organizing efforts and are already trusted, active members of the community. If there is a sufficiently large pool of potential members, group membership could rotate. This could be an entirely new group, or it could be a new project for an existing group. At the very earliest stage, establish a connection with the Relocalization Network.

2. Identify organizations, businesses, and individuals in your community that have some skill or capacity that will be needed in the post-Peak Oil environment. Look for people who are already working in food production and distribution, health, transport, water delivery, waste disposal, home heating, communication, and crisis management who are able to supply goods or services in their respective field using less energy and fewer imported materials, or who have concrete proposals in this regard. Examples include organic farming and Permaculture groups; herbalists and others able to provide health care in the absence of high-tech equipment; car-share organizations; and bicycle advocacy groups.

3. Approach these people, inform them that you are formulating a Community Resilience Plan, and ask for their help and participation. Tell them about Peak Oil—if they don't already know—and help them understand the implications. Point out that their "alternative" skills and knowledge, which they may have grown weary of promoting in the face of general systemic preference for "mainstream" approaches, will soon be crucial to community survival and well-being. In effect, you must appeal to their self-interest as a way to motivate them to expend some extra effort on behalf of a Community Resilience Plan.

4. Work with these groups and individuals to develop a contingency plan in their respective areas of action and expertise. The plan should answer the question: If your community were suffering from a crisis (unaffordable energy prices, fuel shortages, and knock-on effects such as empty store shelves and rampant unemployment), how could your expertise be rapidly deployed on a large scale to help reduce the impact? What assistance and resources would you need? What steps would have to be taken, and in what order? For example, Permaculturists might have a fine way of producing food locally, but in order to expand their efforts significantly they might need to train teams of gardeners to roam the city planting garden beds on vacant lots or in the front and back yards of willing homeowners. How would these teams be financed and coordinated? How might a surge in demand for garden tools and seeds be satisfied? In each essential field, look for ways to build redundancy with regard to provision of goods and services.

5. As you are doing all of these things, also contact city disaster management officials, letting them know what you are doing and why. Ask for their input and inquire how what you are doing can be most useful to the community at large. Make sure they have copies of Post Carbon Cities: Planning for Energy and Climate Uncertainty, by Daniel Lerch (www.postcarboncities.net).

6. It might also be useful to contact leaders in some of the mainstream organizations (government agencies as well as private companies) currently responsible for food, water, transport, and energy provisioning and inquire if they have any plans for the time when fuel becomes scarce. If they perceive your project as a threat, they are likely to try to block or undermine it in various ways. However, if they see the project for what it is—an effort to enable the survival of the community in circumstances where current support systems cease functioning—they may be moved to contribute. If they simply deny that any problems are on the horizon, you may have no choice but to continue what you are doing without their input. Again, make sure these leaders have copies of Post Carbon Cities.

7. Assemble the various suggestions into a coherent Community Resilience Plan. Some sort of document is always useful as a touchstone for collective action. The plan should be comprehensive, modular, and staged. It should offer suggestions for slow-onset as well as rapid-onset disasters. It should also be consistent with proactive plans for the long-term post-carbon transition of society (such as the report of the Portland Peak Oil task force). It should be in a form that can be upgraded and revised continually. And it should be widely available to the public (i.e., published on an easily accessible web site).

8. Once a document has been formulated, go back to civic leaders and disaster management officials and present the document. At the same time, stage a public roll-out of the plan, arranging newspaper articles and radio interviews as well as a public event at which all of the contributors, and local officials, can offer brief presentations.

9. When shortages develop and the economy comes unhinged, work with contributing groups and local officials to implement the plan. Without implementation, the effort will have been wasted. This stage will no doubt entail the hardest and most demanding work. It is difficult to foresee the exact circumstances in which that work will be taking place; nevertheless, the more thorough the preparatory efforts, the more successful the implementation is likely to be.

10. Work with groups in other communities to coordinate programs across regions and nations. Again, the organizations most likely to be helpful in this are the Relocalization Network and the Post Carbon Cities program of Post Carbon Institute, and the Transition Network. Communities should be encouraged to share their experiences, and to share other resources wherever possible. At the earliest opportunity, meta-plans for resilience should be initiated at the state, national, and international levels.

11. Granted, formulating a plan along the lines I have suggested is a huge task, and the process I have described may not be robust enough and sufficiently engaged with all facets of the community in order to succeed. I welcome input on how to deal with these shortcomings. However, the general thrust of the strategy is logical and strategically sound. Obtaining local government support and public or private funding will be extremely advantageous, as attempting such a task on a purely volunteer basis will create obvious pitfalls of overwork and underperformance.

Why?-and Other Questions

Why do we need another strategy?

I have been directly or peripherally involved in many Peak Oil response efforts over the past five years. Some I would characterize as top-down (starting by trying to convince and enroll policy makers such as city officials), some bottom-up (starting from a grass-roots base of concerned citizens and activists). All begin or end with a long-range plan for reducing the community's reliance on oil and other fossil fuels—a plan that entails a redirection in investment of public funds, the shifting of priorities, changes to zoning regulations, and so on.

The Resilient Communities strategy is based on observations of what worked in those previous efforts and what didn't. It is also based on the fact that, even in situations of apparent success (where much publicity was garnered and city councils adopted Peak Oil action plans), nagging doubts remain. What if these efforts are too little, too late? What if society is broadsided by an economic collapse from other sources before the effects of Peak Oil become obvious, undermining proactive plans? When I think of my own community, I wince: despite some good activist efforts over the past couple of years, Sonoma County is really not much better prepared than it was before we started.

During these past few years, I have had opportunity to observe a few policy makers at fairly close quarters and to observe how they think, what they say, and what they do. I've concluded that (with a very few notable exceptions), regardless of lip service to sustainability, Peak Oil preparedness, or climate protection, these people's first priority is economic growth. If their attention to this overarching priority wavers, they soon find themselves out of a job. Thus as long as business-as-usual (or at least business-as-usual lite) is an option, it will be favored. However, looming environmental limits require economic contraction. Peak Oil preparedness is, in essence, the effort to controllably scale back the pace and scope of society's consumption of energy and natural resources so as to reduce the impact when inevitable shortages arise—and also, ultimately, so as to reduce society's material throughput to a level that is actually sustainable over the long haul.

Policy makers demand growth, while prudent policy (in light of resource depletion) requires voluntary contraction. This basic contradiction suggests that real change won't come about until hardship is upon us. And that judgment is in turn confirmed by the one example we have of successful adaptation to energy famine—Cuba's Special Period—which was not a proactive effort, but primarily a reactive one.

Thus as compared to other plans and strategies, Resilient Communities strategy has a more explicit focus on disaster management.

At the point when maintaining business as usual is no longer an option, there may be a chance for new strategies to be considered. Officials must face crises (whether effectively or ineptly); they cannot simply ignore obvious breakdowns in the societal support system. If a plan can be put forward that helps officials solve pressing, undeniable problems, that plan has at least a chance of being considered.

Granted, the strategies most likely to gain favor in the early stages of crisis are those that promise a return to business-as-usual (even if that promise is hollow). But as those strategies fail and crisis deepens, nets will be cast wider. At some point the Resilience Plan will become the strategy of last resort.

A useful historical example: as the Great Depression gathered gloom, the New Deal was not the US government's first response (Herbert Hoover dithered for two years); it wasn't even Franklin Roosevelt's initial strategy: only after everything else had failed during three to four long years of economic crisis and misery were more radical ideas tried.

How, exactly, is a Resilient Community different from a Transition Town or the Powerdown Project?

There certainly are similarities. Transition Towns do tend to bring alternatives movements together to design solutions, and Chapter 3 of Rob Hopkins's Transition Handbook offers an excellent discussion of "why rebuilding resilience is as important as cutting carbon emissions." The Powerdown Project (www.powerdownproject.org) did focus at least partly on disaster management. Indeed, nearly all of the individual elements of the ten-step program laid out above exist in these and other plans. The virtue of the Resilient Communities strategy as outlined here is that it puts those elements together in a new framework that explicitly takes account of the opportunities that crisis affords.

Transition and Relocalization projects tend to have a hopeful, upbeat, attractive tone, and that is one of their virtues. By contrast, disaster management is a sobering subject. Yet while hopeful visions are good and necessary for motivating communities, the real future that is now unfolding is one of crisis heaped upon crisis. Effective response strategies must respond to the facts, however unattractive they may be from a marketing standpoint. The Resilient Communities strategy faces harsh reality and makes the best of it by using it strategically.

The point must be stressed: I don't mean to suggest that proactive plans to alter energy consumption absent a crisis are a waste of effort, even if they are unlikely to be fully implemented by "business-as-usual" policy makers. The efforts of cities like Portland, Oakland, Willits, Totnes, and others deserve to be celebrated and supported.

Moreover, while a Community Resilience Plan would seek to maximize the opportunity that crisis affords, crisis management can only get us so far toward our goal of reducing and redesigning the human economy so that it does not degrade nature's carrying capacity. Broad-scale, proactive plans are still essential. Once the crisis has hit, once other remedies have been tried, once the Resilient Communities programs have been adopted, and once "alternatives" begin to become mainstream, then the long-range plans for redirecting economies toward true sustainability will become actionable. Indeed, at every stage along the way we will need some sense of what a sustainable society would actually look like and how we might bridge the chasm between the present and that distant goal.

What's in it for people in the alternatives movements?

Why should they go to the extra trouble? They are already engaged in important efforts, and are probably overworked.

Folks in the alternatives movements have in many cases been toiling for decades to research and promote sustainable practices. Where they have tried to shape public policy, they may have found themselves ignored or marginalized. The Resilient Communities strategy offers them more than a soap box: it is a chance to use their knowledge and skills in service to community during an imminent time of crisis. While previously they may have found themselves adopting an oppositional or even confrontational stance in relation to industry leaders and policy makers, this is a chance to assume the role of representatives and protectors of the community. If the strategy works, they will cease to be "alternative" and become the "new normal."

What's in it for the officials?

Won't they just ignore or undermine the effort?

Most public officials will gladly sacrifice interests of the alternatives crowd that conflict dramatically with those of the business community. But absent a direct conflict, it is in the nature of politicians to try to keep everyone happy. Resilient Community planning does not focus on conflicts between diverging interests within the community; indeed, its main goal is to improve survival prospects for everyone. If the effort is framed properly, officials should view it as a gift—an aid in solving potential problems that may actually be looming much closer than many politicians and business leaders currently realize is the case.

Resilience in Ecosystems and Economies

For those wishing to adopt the strategy outlined above, the use of the phrase resilient community is not mandatory. Nevertheless, resilience has so many useful implications that it may be useful to spend the remainder of this essay unpacking and exploring a few.

There is a sizeable and edifying literature on the subject of resilience in ecosystems; C. S. "Buzz" Holling is responsible for much of the pioneering work in this regard. An introductory summary of some core ideas related to ecological and economic resilience is contained in the entertaining essay, "Diesel-Driven Bee Slums and Impotent Turkeys: The Case for Resilience," by Chip Ward.

Briefly, resilient systems are able to withstand higher magnitudes of disturbance before undergoing a dramatic shift to a new condition in which they are controlled by a different set of processes. Reducing resilience increases vulnerability to smaller disturbances. From the website of the Resilience Alliance (www.resalliance.org):

Even in the absence of disturbance, gradually changing conditions, e.g., nutrient loading, climate, habitat fragmentation, etc., can surpass threshold levels, triggering an abrupt system response. When resilience is lost or significantly decreased, a system is at high risk of shifting into a qualitatively different state. The new state of the system may be undesirable, as in the case of productive freshwater lakes that become eutrophic, turbid, and depleted of their biodiversity. Restoring a system to its previous state can be complex, expensive, and sometimes even impossible. Research suggests that to restore some systems to their previous state requires a return to environmental conditions well before the point of collapse.

The notion that human communities can benefit from fostering resilience is far from new; when I did a Google search for "resilient communities" in preparation for writing this article, over 80,000 hits came up, including www.resilientcommunities.org—an inactive website related to an initiative in the late 1990s by Northwest Regional Facilitators and the late economist Robert Theobald). One other example worth noting: the UN has a "Resilient Communities & Cities partnership" program, which aims to "increase the resilience of a city or community to a range of shocks, crises, and disasters including environmental emergencies, industrial accidents, outbreaks of epidemics, economic shocks, natural disasters, terrorist attacks, and social conflict." I'll mention a few more examples at the end of this essay.

In their 1982 book Brittle Power, Amory and Hunter Lovins argued for the decentralization of energy production in order to foster resilience.

More recently, David Fleming—the originator of Tradeable Energy Quotas (www.teqs.net)—has written and spoken at some length about resilience in the context of preparations for Peak Oil and Climate Change. With Lawrence Woodward, Fleming has authored, "Transition, Resilience and Tradeable Energy Quotas", in which he notes that a resilient community will need to be "relatively small-scale" and "localized" so that:

• If one part is destroyed, the shock will not ripple through the whole system.
• There is wide diversity of character and solutions developed creatively in response to local circumstances.
• It can meet its needs despite the substantial absence of travel and transport.
• The other big infrastructures and bureaucracies of the intermediate economy are replaced by fit-for-purpose local alternatives at drastically reduced cost.

Once these conditions are satisfied, new possibilities open up:

• Local closed systems conserving fertility and materials will become feasible.
• Local energy production, distribution and storage can be established, linked by local grids.
• Local social capital and culture can be rebuilt as a necessary condition for the cooperation and reciprocities needed to achieve the transition.

One quality of resilience is redundancy—which is often at odds with economic efficiency. Standard economic theory tells us that if it is cheaper to manufacture a particular widget in Malaysia than to do so locally, then all such widgets should come from a factory in Kuala Lumpur. Efficiency implies both long supply chains and the reduction of inventories to a minimum. The "just-in-time" delivery of raw materials and parts for manufacturing reduces costs—but it increases the vulnerability of systems to fuel shortages.

As we pay more attention to resilience and less to economic efficiency, we begin to see redundancy and larger inventories as benefits rather than liabilities. Other resilience values include diversity (as opposed to uniformity), dispersion (rather than centralization) of control over systems, and, as already noted, the localization (versus globalization) of economies.

More notable "resilient communities" resources include:

• The organization RESET (Renewable Energy/Shelter/Environment Training) in the UK (www.reset-development.org) was recently established to increase knowledge about climate change and Peak Oil outside the OECD countries, and to provide training in practical measures to foster resilience in the face of coming transitions to soaring energy prices and rising temperatures.
• The University of British Columbia's Resilient Communities Project, a collaboration of academics, First Nations peoples, and government:
  www.resilientcommunities.ca/
• The University of Minnesota project on Resilient Communities
• Ontario Healthy Communities Project's publication on Resilient Communities
• Resilient Communities and Cities Coalition
• British Columbia's Disaster Resilient Communities Program
• ICLEI's Climate Resilient Communities Program
• The J. W. McConnell Family Foundation's program on Creating Resilient Communities

MuseLetter #193 / May 2008
by Richard Heinberg

MuseLetter #194 / June 2008
by Richard Heinberg

Coal in China

China is the world's foremost coal producer and consumer, surpassing the United States by a factor of two on both scores and accounting for 40 percent of total world production. Moreover, its coal consumption has been rising rapidly, at a rate of up to ten percent per year (which translates to a doubling of demand every 7 years). While China is a significant producer of oil and natural gas, coal dominates the nation's fossil-fuel reserve base. About 70 percent of China's total energy is derived from coal, and about 80 percent of its electricity. The country has recently become the world's foremost greenhouse gas emitter due to its growing, coal-fed energy appetite.

This nation's coal-mining history is probably the world's longest, dating back up to two millennia—though modern mining methods were not introduced until the late 19th Century by European, and later by Japanese companies. Production achieved one million tons per year in 1903, growing at an average annual rate of over ten percent. Growth slowed during the civil wars of the 1920s, but resumed strongly in the mid-1930s. After the establishment of the People's Republic in 1949, coal production again slumped, then quickly increased to over 400 million tons per year by 1960, only to fall again during the turbulent years of the Cultural Revolution. Production accelerated from the 1970s on, achieving one billion tons per year in 1989. In 1996, China began addressing problems of mine safety and low productivity by closing its smallest and least efficient mines. This led to a temporary decline in production lasting until 2000; since then, production has grown with astonishing rapidity to the present annual output of roughly 2.5 billion metric tons (tonnes) or 2.7 billion US short tons.

China's coal consumption in 2000 was 30 times its volume a half-century earlier, at the time of the establishment of the People's Republic. And just since 2000, consumption has more than doubled.

China currently has roughly 25,000 coalmines, with 3.4 million registered employees. Many of these mines are small, private, local—and even illegal—operations that can respond quickly to the market; but they are less efficient than larger, centralized mines and tend to have more environmental and safety problems.

The productivity of China's coal mining is low: in 1999, 289 tons of coal were produced per miner averaged across all the nation's mines, versus almost 12,000 tons per miner in the US. This productivity rate resulted from still-low levels of mechanization within the mining industry. However, the strong trend during the past decade has been toward greater mechanization.

Thin overburden allows surface mining in some areas, but only four to seven percent of China's reserves are suitable for surface mining, and of these most consist of lignite. Today the average mining depth in China is 400 meters, a figure that is slowly increasing, and 95 percent of mines are shaft mines (compared to 48 percent in the US).

Uncontrolled underground coal fires, some of which will burn for decades, have become an enormous environmental problem in China, consuming an estimated 200 million tons of coal annually—an amount equal to about 10 percent of the nation's coal production. These ultra-hot fires can occur naturally, but most are caused by sparks from cutting and welding, electrical work, explosives, or cigarette smoking. Across the northern region of Xinjiang, fires at small illegal mines have resulted from miners using abandoned mines for shelter, and burning coal within the shafts for heat. China's underground coal fires make an enormous, hidden contribution to global warming, annually releasing 360 million tons of carbon dioxide—as much as all the cars and light trucks in the United States.

The pace of China's headlong dash toward increased coal consumption is legendary: in recent years an average of one new coal-fed power plant has fired up every week. The resulting annual capacity addition is comparable to the size of Britain's entire power grid. The price being paid in environmental quality and human health for this coal bonanza is likewise well known—to citizens and visitors alike: coal power plants emit deadly clouds of soot, sulfur dioxide, and other toxic pollutants, as well as millions of tons of carbon dioxide. As a consequence, areas in southern China such as Sichuan, Guangxi, Hunan, Jiangxi, and Guangdong have increasing problems with acid rain; many of China's cities are shrouded in a continual pall of smoke reminiscent of London or Pittsburgh in 1900; and respiratory ailments now account for 26 percent of all deaths.

China's coal is used not only for electricity generation, but also for the production of iron, steel, and building materials (primarily cement), and as fertilizer feedstock. These main drivers of increased demand are themselves powered by heavy industrial growth, infrastructure development, urbanization (roughly 300 million additional people will live in Chinese cities by 2020), and rising per-capita GDP.

All of these trends in turn emerge from China's recent history. At the end of the Communist revolution in 1949, the country was impoverished and war-ravaged; the overwhelming majority of its people consisted of rural peasants. Communist Party chairman Mao Zedong's stated goal was to bring prosperity to his populous, resource-rich nation. A period of economic growth and infrastructure development ensued, lasting until the mid-1960s. At this point, Mao appears to have had second thoughts: concerned that further industrialization would create or deepen class divisions, he unleashed the Cultural Revolution, lasting from 1966 to the mid-1970s, during which industrial and agricultural output fell. As Mao's health declined, a vicious power struggle ensued, from which emerged the reforms of Deng Xiaoping. Economic growth became a higher priority than ever before, and it followed in spectacular fashion from widespread privatization and the application of market principles. "To get rich is glorious," Communist officials now proclaimed.

During the 1950s, '60s, and '70s, the populace worked hard, sacrificed, and endured grinding poverty for the good of the nation. Now a small segment of that populace—mostly in the coastal cities—is enjoying a middle-class existence, and in some cases spectacular riches. This wealth disparity is bearable only as long as the middle class continues to expand in numbers, offering the promise of economic opportunity to hundreds of millions of poor peasants in the interior of the country.

In effect, rapid economic expansion and increasing prosperity (for a small, influential portion of the population) are being used to divert domestic attention from frustrated democratic political aspirations and regional rivalries. But China's central government has unleashed a firestorm of entrepreneurial, profit-driven economic activity, which it cannot effectively contain. China's central government and its legal institutions are relatively weak; meanwhile the uncontrollably dynamic economy is export-dependent and ill-suited to meeting domestic needs.

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.

As in the US, coal transport bottlenecks raise production costs and inhibit growth. Most coal transport is by rail, which has grown faster than road and water transport. But only half of China's coal production is from rail-connected mines. Lack of rail capacity is leading to increased demand for diesel fuel for coal trucks, and thus to higher diesel prices (and increasingly frequent shortages), and these in turn result in more coal delivery problems.

The lack of diesel fuel for coal transport could potentially be solved by turning coal into a liquid fuel (a process discussed in more detail in Chapter 6). China's largest coal firm, the Shenhua Group, recently opened the country's first coal-to-liquids (CTL) plant, and it plans to start seven more by 2020. Other CTL plants are also in the works—including several in Northern China that Shenhua will construct with partners Shell and Sasol, slated to open in 2012; and one being planned by the Yankuang coal group, the second-largest coal producer in China, near Erdos.

If only a few of these proposed CTL plants are constructed, China will lead the world in production of synthetic liquid fuels from coal. But even if all of them come on line, this will offset only a small portion of China's oil imports (the current goal is to produce 286,000 barrels per day by 2020, while the nation currently imports over three million barrels of petroleum per day, with that amount growing rapidly). In any case, CTL will entail substantial new coal demand as well as severe environmental consequences. According to China's Coal Research Institute, each barrel of synthetic oil produced from coal will consume at least 360 gallons of fresh water. (For comparison: 360 gallons equals roughly 8.5 barrels; thus at this ratio of CTL to water, 286,000 barrels per day of CTL would require approximately 2.5 million bpd of water.) And most areas of China are already experiencing water scarcity.

The irony inherent in China's grand experiment with CTL is that in order to solve coal supply problems stemming from diesel shortages, the country must produce even more coal.

Aside from transport bottlenecks, supply problems are also resulting from crackdowns on mines that are unsafe, polluting, or wasteful of energy.

China is producing its best coal first. The country has yet to exploit its reserves of lignite, which has high moisture and ash content and entails much higher CO2 emissions. A new technology (Integrated Drying Gasification Combined Cycle, or IDGCC) developed in Australia, and now being studied by the Chinese government, is capable of burning this coal efficiently and reducing greenhouse gas emissions; but if lignite grows as a share of total coal production, this will exacerbate transport problems, because much more material will have to be mined and moved in order to deliver the same amount of energy.

All of these difficulties with producing and delivering sufficient coal are leading to increased imports. China has been an international coal supplier since the early 20^th century, when nearly all its exports went to Japan. In 2001, China's coal exports amounted to 90 million tons—a quantity equal to the total production of Indonesia. But Chinese coal imports doubled between 2005 and 2007, making the nation a net importer of the resource. This trend toward increasing coal imports, which is driving up international coal prices and impacting the economies of other coal importers such as India and Japan, seems almost certain to accelerate.

China's electric power generation is becoming more efficient, but even an extensive rollout of the highest-efficiency plants could only dent growth in coal consumption before 2020. Meanwhile, these new power plants will impose greater up-front costs.

In sum, continually increasing coal consumption is central to China's economic existence; however there are signs that the country is already experiencing difficulty in maintaining its furious growth pace in producing the resource. The amount of coal available in the future will crucially determine the direction of the nation's economy and likely its internal social and political stability as well.

Resource Characteristics and History of Reserves Estimates

China's coal resources are concentrated mainly in the northern half of the country, with fully half of all reserves located within the three provinces of Inner Mongolia, Shanxi, and Shaanxi. Reserves comprise the complete range of coals, from lignite to anthracite, with bituminous the most abundant (according to the 1992 BP proven reserves estimate, 13.5 percent of China's coal reserves consist of lignite, 24 percent non-coking bituminous coal, 28 percent coking bituminous coal, and 18.5 percent anthracite). Locally, seam quality is highly variable, although sulfur levels are in most cases low.

While recoverable reserves are a matter for debate, China's total coal resources are clearly vast, with government figures listing a resource base of about a trillion tons. As always, location, seam thickness, quality, and depth determine how much of the resource will ever be mined. China's coal reserves to a depth of 150 meters are relatively small, with resources at depths of 300–600m forming the majority of the future reserve base.

Early reserves estimates of China's coal were imprecise, because thorough surveys were impeded by the turbulence of the nation's political history during the last century. In the 1930s, reserves were estimated at somewhat over 200 billion tons, sufficient for over 5,000 years of production at then-current levels of output.

In 1987, BP Statistical Review of World Energy listed reserves of 156.4 billion tons. In 1990, BP reported Chinese coal reserves as 152.8 billion tons. By 1992, the amount had fallen to 114.5 billion tons. Oddly, that official number has not changed in the succeeding 16 years, during which the nation has produced over 20 billion tons of coal.

There are differing opinions on this anomaly: World Energy Council politely notes that it "indicates a degree of continuity in the official assessments of China's coal reserves." However, Energy Watch Group calls that reasoning "strange," since Chinese coal reserves had been downgraded two times since 1987, evidently at least partly due to the subtraction of produced quantities.

Reserves were thrown further into question in 2002, when the Chinese Ministry of Land and Natural Resources declared that the country's proven recoverable coal reserves amounted to 186.6 billion tons. However, this large number has not been adopted by the World Energy Council, the International Energy Agency, or BP Statistical Review.

Within China, Mongolia is something of a wild card, with undoubtedly large resources but poor transport facilities and incomplete geological surveys. It is as yet unclear how much of its coal resources should be listed as reserves.

Recent Studies

1. Coal: Resources and Future Production (Werner Zittel and Jörg Schindler, Energy Watch Group [EWG], March 2007, www.energywatchgroup.org).

As noted above, the EWG authors question WEC figures for China's reserves, pointing out that these evidently do not account for amounts produced since 1992, nor for amounts lost to coal fires (EWG does not discuss the much larger reserves number published by the Chinese government). The report's authors write:

China's reported coal reserves are 62.2 billion tons of bituminous coal, 33.7 billion tons of sub-bituminous coal and 18.6 billion tons of lignite. Subtracting the produced quantities since 1992 (the latest data update) results in remaining reserves of about 44 billion tons of bituminous coal, 33.7 billion tons of sub-bituminous coal and 17.8 billion tons of lignite.

This indicates total remaining recoverable reserves of about 96 billion tons. EWG uses this updated reserves figure (which still does not account for amounts lost to uncontrolled underground coal fires) to plot a possible future production profile, using a logistic curve. Their results:

This scenario demonstrates that the high growth rates of the last years must decrease over the next few years and that China will reach maximum production within the next 5–15 years, probably around 2015. The already produced quantities of about 35 billion tons will rise to 113 billion tons (+ 11 billion tons of lignite) until 2050 and finally end at about 120 billion tons (+19 billion tons of lignite) around 2100. The steep rise in production of the past years must be followed by a steep decline after 2020.

The EWG authors restate their conclusion several times: "either the reported coal reserves are highly unreliable and much larger in reality than reported, or the Chinese coal production will reach its peak very soon and start to decline rapidly."

In addition to near-term peaking in quantities of coal produced, declining coal quality is also a problem: "projected produced quantities of coal will show a steadily declining energy content." Currently, China produces very little of its lignite. This is likely to change as higher-quality coals are exhausted. But the nation's lignite reserves are too small to have much influence on total coal production, and lignite's energy content is only about one-quarter that of high-quality bituminous coal.

The EWG report discusses China's plans for CTL development, suggesting that this will hike coal demand by "several hundred million tons per year," pushing the nation's production capacity "very fast to its limits."

2. "What is the limit of Chinese coal supplies—A STELLA model of Hubbert Peak" by Zaipu Tao and Mingyu Li, Energy Policy Volume 35, Issue 6, June 2007.

These two authors, from the Northeastern University PRC School of Business and Administration, apply Hubbert analysis (linearization and peaking) to Chinese coal production, basing their analysis on the official Chinese government proven recoverable reserves figure of 186.6 billion tons. In doing so, they use STELLA, a software platform for modeling the behavior of complex, dynamic systems.

Tao and Li write that Hubbert linearization indicates yet-to-produce reserves of 71.73 billion tons, with a maximum production rate of 1.41 billion tons/year and the all-time production peak in 2006. But this cannot be correct, as in fact the current production rate is much higher and production continues to increase. The problem, the authors suggest, is that linearization in this instance gives a false result for yet-to-produce reserves: "We know," they write, that the number should be the official government figure of 186.6 billion tons. Therefore they substitute that amount in the equations, with the result that, "According to the standard run, the Hubbert Peak for China's raw coal production appears to be in 2029 with a value of 37.84 hundred million tonnes."

The STELLA software allows for the addition of various parameters (such as annual reserves additions, growth rates, and CO2 emissions), and results in differing decline curves. Tao and Li conclude:

According to this simulation . . . the peak in China comes between 2025 and 2032 with peak production about 3339–4452 million tons. Chinese raw coal output will grow by about 3–4% annually before the peak, which probably is a good chance for the development of China's coal industry. However, the corresponding amount of greenhouse gases produced may act as an enormous obstacle to increasing the coal production. . . . To meet the increasing demand, China should consider new energy development policies related to supply diversification before the peak comes.

3. Lignite and Hard Coal: Energy Suppliers for World Needs until the Year 2100 – An Outlook (Thomas Thielemann, Sandro Schmidt, and J. Peter Gerling, German Federal Institute for Geosciences and Natural Resources [BGR], International Journal of Coal GeologyVolume 72, Issue 1, 3 September 2007, www.sciencedirect.com).

The BGR report concludes that, "from a raw-material angle in this scenario there will be no bottleneck in coal supplies until 2100." However, the assumptions and reasoning that lead to this judgment are questionable in light of considerations brought up by EWG. The BGR authors write: "Should the annual rise in output be greater than 1%/a, Asia will have to convert resources into reserves on a much larger scale than presumed here." But as noted above, China's rate of growth in coal consumption has in fact recently been closer to 10 percent per year. The BGR authors do not explain how or why that rate will slow so much. Also, the conversion of resources to reserves that the authors assume will occur in the future is not explained adequately. The historic trend has been in the opposite direction—that is, for booked reserves to be downgraded to mere resources—and it is unclear why that trend should reverse itself.

The BGR authors do note that "Since it will certainly be possible to cover some needs on the world market, the pressure of Asia, specifically China and India, on world coal supplies and world market prices will be much higher than today."

4. A Supply-Driven Forecast for the Future of Global Coal Production (Höök, Zittel, Schindler, and Aleklett;Energy Policy, in press, The Svedberg Laboratory.

As in its other country analyses, this paper's discussion of China's future coal production expands on the reasoning and conclusions of the EWG report. It concludes:

The forecast estimates that Chinese coal production will reach a peak in 2020, perhaps even earlier if the reserves are backdated to 1992, when the last actual update took place, and corrected for cumulative production. So China might be very close to its maximum coal production unless the reserves are larger than reported or a significant amount of resources can be transformed into produced volumes in the near future. Unless something dramatic happens to the Chinese reserves the future production will very soon end up under reserve constraints.

The authors offer two new charts, one based on reported reserves, the other based on reported reserves minus amounts produced since 1992:

5. Other Hubbert linearization and curve fitting (David Rutledge and Jean Laherrère).

In applying the Hubbert linearization method, David Rutledge of Caltech (http://rutledge.caltech.edu/) finds the trend-line for China's total ultimate production to be 115 billion tons, with 45 billion tons produced so far and 70 remaining. This agrees well with the result obtained by Tao and Li. Like them, he questions this result. He notes that while the trend line that now shows 70 billion tons left-to-produce has been steady for 40 years,

. . . in the last three years, production has gone through the roof. There may be a move to a new trend line underway. It is also possible that production will come back to the original trend line. During the Great Leap Forward from 1958 to 1960, reported production soared for a few years, but returned afterwards to previous rates.

Veteran petroleum geologist Jean Laherrère has charted a Hubbert curve for future Chinese coal production ("Combustibles fossiles: quel avenir pour quel monde?" aspofrance.viabloga.com), assuming an ultimate production of 150 billion tons, a figure similar to those used by the Energy Information Administration of the US Department of Energy and the BGR. This assumes 110 billion tons of remaining reserves, an amount somewhat higher than EWG but slightly lower than the WEC number and much smaller than the official Chinese government's 186.6 billion tons. Nevertheless, in this model, production peaks at about the same time as suggested by EWG and Höök et al.—that is, in 2020.

Implications

Demand for coal in China is growing so quickly that even if the high reserves estimate from the Chinese government of 186.6 billion tons proves to be accurate (as opposed to EWG's much lower estimate of 96 billion tons), this may shift the date of peak production by only about 5 to 17 years—from the years 2015-2020 (EWG) to 2025-2032 (Tao and Li). This further calls into question the BRG conclusion that "there will be no bottleneck in [China's] coal supplies until 2100," as a delay of the peak to that extent—by more than 65 years beyond the Tao and Li forecast range—would require a conversion of resources to reserves on a truly monumental scale. Such a conversion is impossible to justify by precedent, and so BRG's conclusion can only be considered realistic if China's coal demand is assumed to level off soon and perhaps fall in coming decades—in which case a production peak will have occurred in effect.

But such demand reduction is currently difficult to envision. China's economy has been, is, and will continue to be coal-powered—as long as sufficient supplies are available—since few options exist to substantially reduce its coal dependency. Offsetting one year of recent coal demand growth would require over 100 billion cubic meters of new natural gas production capacity (current total capacity is 76 bcm), 85 GW of hydropower capacity (current total capacity: 83 GW), or nearly 50 GW of nuclear power (expected total capacity by 2020: 40 GW). It must be emphasized that these offsetting amounts are required yearly additions. Even if the amount needed to offset coal growth were spread among these and other alternatives such as wind and solar, the required additions would be economically daunting if not physically impossible to achieve.

As a result, China's practical ability to make serious CO2 emissions reductions in years ahead is very low, unless energy demand and production decline sharply.

China's demand for coal will grow even faster than it has recently if CTL technologies are implemented at the scale and speed now proposed. Coal-to-chemicals plants, now being considered, would have a smaller impact, but in the same direction. Coal-to-liquids and coal-to-chemicals are projected to add 450 million tons of annual new coal demand by 2025. In this case, total demand could exceed 4.7 billion tons by 2020.

The studies cited here (with the exception of BGR) suggest that China's domestic coal production growth cannot be sustained much beyond 2020; indeed, in the most constrained case (that is, if the EWG forecast is correct) demand will outstrip domestic supply dramatically during the next ten years.

China's demand for coal imports will therefore almost certainly top 200 million tons per year by 2020, and could exceed that figure by a wide margin. This will significantly impact regional markets, leading to increased competition with other coal-importing countries (Japan, South Korea, Taiwan, and India), and to much higher prices for internationally traded coal. (Currently, the total annual volume of internationally traded coal is just over 800 million tons.)

The supply problems discussed here appear already to be manifesting. During the winter of 2007-2008, power plants in many parts of the country ran short of coal due to soaring prices and transport bottlenecks, while snow and ice storms disrupted power transmission. A People's Daily article, quoting Zhang Guobao, deputy head of the National Development and Reform Commission, noted that only a "fragile balance" existed in the thermal coal market despite huge and growing coal output. During that same winter, prices for internationally traded coal climbed substantially.

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.