Coal is the most abundant fossil fuel resource in the world and provides approximately 29% of the world’s total energy needs. Coal can be classified into four general ranks, determined by various traits including heating value, carbon content, and moisture. In order of lowest grade to highest, the ranks are lignite, sub-bituminous, bituminous, and anthracite.

Coal provides 22% of total U.S. energy consumption, and fuels over 50% of U.S. electric power needs. The U.S. also holds approximately 25% of global coal reserves, 275 billion tons according to the U.S. Energy Information Administration (EIA). At current consumption levels, the country has a known 250 year supply - more coal than any other country in the world. In fact, there is more energy contained in the coal reserves of the State of Illinois alone than is contained in all the oil reserves of Saudi Arabia. The United States’ vast abundance of coal reserves stands in sharp contrast to the United States’ share of world oil and natural gas reserves, which are estimated to be less than 3%.

Many large countries contain significant proven reserves of coal, and they too present an opportunity for better and more innovative coal uses. China holds 126 billion tons of reserves and India holds 93 billion tons – two countries that are experiencing tremendous economic growth and whose energy needs are rising. The vast majority of both these countries’ energy consumption comes from burning coal and continued expansion of local economies will drive greater energy demand in the future.

Despite the fact that coal is abundant and cheap in the United States, public policies have discouraged its use because the air pollutant emissions from burning coal can create serious environmental hazards. These emissions contribute to localized air pollution as well as global warming, which has led to resistance to the siting of new power generation facilities that use coal. Similarly in developing countries, greater coal use has led to environmental challenges and a renewed interest in finding alternative ways to use coal resources that alleviate these challenges. Conversion of coal to natural gas provides a significantly cleaner alternative to combustion.

The greatest opportunity for GreatPoint Energy’s projects is in locations where a significant gap exists between the cost of coal and the price for natural gas, such as in the United States, China, and Canada, among others. In each of these countries, and particularly in Asia, gas costs have risen significantly in recent years and demand continues to grow. At the same time, there is a significant disconnect between conventional natural gas reserves and future demand – in fact given current consumption, increased use of natural gas may well exhaust economically recoverable natural gas supplies. Yet the potential size of these countries’ natural gas reserves could be enormous if their abundant coal resources were to be converted to natural gas.

As the figure above illustrates, demand for natural gas in both developed and emerging economies is projected to substantially outstrip supply in the future. GreatPoint Energy’s hydromethanation process will help increase global supply while providing an environmentally superior alternative to the combustion of solid fuels.