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U.S. Coal Production Up Thanks To Exports

The Herald-Dispatch

Coal production increased by 45 million short tons in 2017 in response to high demand for U.S. coal exports, according to a report by the U.S. Energy Information Administration.

The EIA sees met-coal exports staying strong through this year and next, but with market conditions returning to normal, thermal-coal exports will find it harder to compete with Australia and Indonesia, which are much closer to the Asian markets.

So the EIA’s forecast shows coal production overall to decline by 14 million short tons in 2018 and by 18 million short tons in 2019, as export demand is expected to slow and natural gas prices are expected to stay below $3/MMBtu (per 1 million British thermal units) during much of the forecast period, which contributes to less coal use for electricity generation, according to the EIA report.

EIA expects the share of U.S. total utility-scale electricity generation from natural gas to rise from 32 percent in 2017 to 33 percent in 2018 and to 34 percent in 2019 as a result of low natural gas prices.

Meanwhile, the report added that coal’s forecast generation share falls from 30 percent in 2017 to slightly lower than 30 percent in 2018 and 28 percent in 2019.

The nuclear share of generation was 20 percent in 2017 and is forecast to average 20 percent in 2018 and 19 percent in 2019, the report said.

Non-hydropower renewables provided almost 10 percent of electricity generation in 2017, and its 2018 share is expected to be similar before increasing to almost 11 percent in 2019. The generation share of hydropower was more than 7 percent in 2017 and is forecast to be slightly lower than 7 percent in both 2018 and 2019.

As aging coal-fired power plants are shut – roughly 20 of 380 have closed or are in the process of shutting since Donald Trump became president – coal’s share of the nation’s power mix has plummeted from nearly half in 2008 to roughly a third today.

Last year, coal consumption in the United States fell by 2.4 percent, falling to its lowest level in nearly four decades.

In the early weeks of 2018, national coal production continued to decline from a year ago despite the frigid winter. A weather-related increase in exports last year yielded a modest gain in jobs, but it is not considered sustainable, according to EIA forecasts.

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