The economics of coal supply—The state of the art

Abstract

With the mounting interest in national energy problems has come intensification of efforts to determine the future economic availability of fuels. Until well into the 1970s, work concentrated on estimation of oil and gas supplies. However, subsequently numerous evaluations of coal supply have emerged. Such studies share with earlier work on oil and gas dependence upon an inadequate statistical base. Energy has been one of many areas in which governmental data gathering has badly lagged behind national information requirements.‡ Nevertheless, the fragmentary work that has been possible suggests that the availability of low cost coal resources may be greatly exaggerated.§ In the present article, this work on coal is reviewed. The discussion begins with an effort to show what is required in principle for a satisfactory supply analysis. Then the key studies are evaluated. Most supply analyses prove to be modifications of work undertaken by the U.S. Bureau of Mines (USBM) Process Evaluation Group (Peg) at Morgantown, West Virginia. Therefore, the Group's work is given special attention. This is followed by a review of alternative models of the determinants of coal-mining costs at a particular time, a note on the handling of cost changes over time and discussion of efforts to assign reserves to cost categories. The study concludes with proposals for further research.