Increased Demand for Coal in Southeast Asia

As nations in Southeast Asia continue to establish their economies, grow their populations, and enter new industries, these countries will undoubtedly need a large source of reliable electricity to accomplish their goals. For an exporter like Washington with long standing trade relationships with our political allies throughout the region, it’s an opportunity we can’t afford to miss.

A report from the International Energy Agency (IEA) found that demand for energy in Southeast Asia could skyrocket over the next two decades with the Southeast Asian region being 78% reliant on fossil fuels by 2040. In fact, coal is projected to overtake oil as the most consumed fuel in the region.  For a number of reasons this transfer from oil to coal for producing electricity is a new positive for the region and presents a massive opportunity in one of the world’s most promising markets.

The IEA report forecasts a strong, sustained rise in demand for coal from many nations to which Washington already maintains trade relationships. This report suggests a rapidly growing market that could generate a huge opportunity for U.S. exporters and subsequently the thousands of Americans they employ. But others will seek to pursue this opening. According to a 2016 report from the Journal of Eurasian Studies, coal is also Russia’s top exporting prospect for Southeast Asia. Along with countries like Indonesia, regional competitors such as Russia will be happy to capitalize on this demand.

Unlike overseas suppliers, Washington will export coal from the Powder River Basin. As we have written in the past, PRB coal is sub-bituminous meaning it contains lower levels of SO2 than other coals, like those found in Appalachia or even in China.  Abundant in Montana and Wyoming, it is a cleaner alternative to what Asian consumers currently utilize.