Coal demand projected to slide to new lows through 2020

October 11, 2019

The most recent forecast from the U.S. Energy Information Administration (EIA) found that coal production in the United States is expected to decline through 2020 as coal continues to lose ground to natural gas and renewable energy for power generation.

EIA forecasts that coal-fired power will drop from 28 percent in 2018 to 22 percent by 2020. Coal production is expected to drop 10 percent this year and then another 11 percent by 2020.

EIA expects total U.S. coal production to decrease to 144.2 Mt (159 million st) in the fourth quarter of 2019, a decline of 30.8 Mt (34 million st) (17 percent) from the same period in 2018. The resulting estimate of U.S. production totals 616 Mt (679 million st) in 2019, which would be a 68.9 Mt (76 million st) (10 percent) decline from the 2018 level. In the Western region (largely the Powder River Basin), which produces more than half of the U.S. coal supply. EIA expects coal production to decline further by 11 percent in 2020 to 547 Mt (603 million st), the EIA reported.
Coal used for U.S. power generation is expected to decline by 14 percent this year to 545.8 Mt (601.6 million st), according to the EIA.

Coal consumed by the electric power sector is projected to plunge below 453 Mt (500 million st) in 2020 for the first time since 1978, according to the EIA. That would mark a decline of 27 percent since 2016.

“The U.S. power sector's move away from coal is contributing significantly to decreases in U.S. coal production,” Linda Capuano, the EIA's administrator, wrote in the report.

Utilities across the county have announced they will be closing various coal-fired power plants, while banks have been hesitant to finance the industry’s projects.

EIA cited “declining coal demand and related bankruptcies, ownership changes, and sudden mine closures” as some of the biggest obstacles facing the industry.

The Trump administration has made an effort to boost the coal industry, scrapping an Obama-era power plant rule and replacing it with one critics have contended would only allow the most modest pollution controls at power plants.

The agency also forecasts growth in renewable energy like solar and wind, going from just under 10 percent in 2018 to 12 percent by 2020.

EIA also expects carbon emissions to decline by about 2 percent in 2019 and 2020, despite a nearly 3 percent rise in 2018.
 

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