Oil price fuels fresh look at coal

VAST coal reserves in Asia are gaining attention as major energy consumers such as China and India grapple with the reality of oil prices around $US100 a barrel and the risks they pose to their economies.

Multibillion-dollar facilities that convert coal to oil are being studied across Asia, while utilities are shelving plans to build power plants that use natural gas or fuel oil because prices of those fuels track the cost of crude.


Crude-oil futures on the New York Mercantile Exchange are more than 50 per cent higher than they were a year ago and are within sight of an inflation-adjusted peak of $US102.81 a barrel set in early 1980.

“The longer oil prices stay at these levels, then the more the incentives are going to be there for exploiting coal reserves,” said Cambridge Energy Research Associates coal expert Jim Brock.

Coal prices would have to rise nearly fivefold to match current oil prices on a unit-of-energy basis, he said, and the difference between the cost of the commodities “is actually widening”, he said.

The Australian