Coal could be fuel for 21st century, if oil habit kicked
A few months ago a ''classified'' Australian document circulated in Asian capitals, forecasting coal demand in the region and making a case for a coal export boom from Australia.
It was part crystal ball and part snake oil.
Australia would love to boost demand for its ''king of fuels,'' and Asia would love to kick the oil habit -- fast.
Compared with the West, most Asian nations deftly maneuvered through the two oil shocks of the 1970s, paying for oil imports with exports and ''jumbo loans'' of recycled petrodollars. Only during this current recession have Asian economies greatly suffered when their sales to industrial nations tumbled like Chinese acrobats off a human pyramid.
Tumbling of exports may be temporary, but the realization that the future of Asia rises or falls with that of oil has awakened leaders to the search for petroleum alternatives, especially coal.
''If anything can derail Asia's economic growth,'' says Mohandas K. Samuels, author of a UN report on Asian energy, ''it is energy supplies more than energy prices.''
In the meantime offshore oil rigs have been swimming across Asian seas in the last three years, drilling for wil pools that would cut imports and buy time until energy alternatives come on stream in the 1990s. But no Saudi Arabia-size discoveries are expected.
''The Asian region is up for hard times in the coming years. The 1980s will look like the the 1970s -- oil imports creating balance-of-payment deficits and growth rates checked,'' Dr. J. Gururaja, a UN energy specialist, states. Any slack in economic growth, he says, would severely jeopardize programs to help meet the poor's basic needs.
Coal's possible role as a 21st-century energy base for Asia's post-oil industrial growth, however, will barely touch the most numerous of energy users -- village peasants.
In the region's rural rice paddies and jungle hills, where almost 70 percent of Asians still plow the soil with water buffaloes and live in wood shacks, oil today accounts for only 3 to 6 percent of total energy use. This excludes wood, which has become dearer as forests become scarcer.
But for Asia's emerging industrial sector, coal can hardly be passed up. Three of the world's largest deposits lie in Australia, India, and China, and Indonesia sits on a large chunk of the hard fuel, too.
With no strong environmental interest, Asian leaders worry less about coal's polluting effects and more about the cost of gearing up for it.
Even though coal prices are about 30 percent below oil, the difference is often not large enough to justify the immense up-front capital costs needed to build up deep-water ports, loading docks, and rail lines, and to convert power plants. Also, investment in coal facilities for the 1990s assumes constant government policies in a region of the world not known for political constancy.
But some long-range direction comes from the World Bank and Asian Development Bank (ADB), both of which plan various aid projects for coal-related facilities.
''Most countries in Asia have their own coal resources,'' says ADB senior geologist Harald Hajeck. ''But it will take 10 to 15 years to develop the mines and furnaces. The big question is how long each country will rely on coal imports before they can tap their indigenous resources.
''The big coal exporters, Australia, Canada, and the United States, hope that they have steady markets indefinitely.''
One estimate of the world coal trade by 1990, done by the London-based broker Sheppards & Chase, indicates one-third of all coal exports going to the Far East , with Australia commanding 32 percent of that trade, Canada with 28 percent, and the US with 21 percent of the exports.
A large unknown on international coal markets is China. It now produces an estimated 600 million tons of coal for domestic use and may contain the world's largest deposits - an estimated 600 billion tons of proven reserves. First on the dock was Japan, which provided $3.5 billion in cheap loans for rail lines and coal-handling ports at Shijiusuo and Qinhuangdao.
Australia now provides 60 percent of Japan's steam coal imports and 40 percent of coking coal imports. To diversify its energy sources, Japan is looking to China for new supplies. Japan's coal consumption is projected to jump more than 50 percent in this decade.
Like oil, coal has become a target of intense exploration in Asia. In Bangladesh, for instance, proven reserves of 700 million tons are known, but considered too deep. A commercial deposit of 50 million tons was located in 1980 .
India, with large reserves of poor-quality coal, has had difficulty transporting the fuel to its own plants, and even imports about 1 million tons of coal a year. Indonesia, with estimated 147 million tons of proven reserves, plans to begin mining for domestic use in the late 1980s.