Growth prospects for coal industry

In a recent report, Coal in Canada, the Canadian Energy Research Institute in Calgary reviews the history and current status of Canada’s coal industry.

While coal is both an important source of domestic energy and a major export commodity, what is less well recognized is the widespread economic impact of Canada’s coal industry on the domestic economy.

The importance of coal to the national economy, the report says, stems from Canada’s large reserves of thermal and metallurgical coals; the dependence of many regions in Canada on coal for electric power generation; and the significant employment generated by the production and export of mineral. Canada has about 6.5 billion tonnes of proven recoverable reserves of coal. It is Canada’s second most important source of electric power generation and is particularly important for electricity production in Alberta, Saskatchewan, Nova Scotia and Ontario.

One of the most important links between Canada’s coal industry and the domestic economy is transportation, since the competitiveness of Canadian coal is largely determined by the cost of transporting coal long distances to domestic and export markets.

While coal production has a broadly based impact on many industries in Canada, most of the impact is felt in industries such as wholesale and retail trade, the business service industries and rail transportation and related services.

Increased exploration costs in mature oil-bearing sedimentary basins, recent conflicts in the Persian Gulf, concern as to the safety and cost of nuclear power generation, the rapidly growing energy demand of developing nations and development of new clean coal technologies all point to greater demands for coal in the future.