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US coal production expected to fall

Thursday, November 14th, 2019

The US Energy Information Administration said Wednesday that it expected the US to produce 697.9 million st of coal in 2019, raising its estimate from a month ago by 3.6%.

2019 production would be 7.4% lower than the 753.7 million st produced in 2018, while 2020 production is estimated at 607.1 million st, the EIA said in its November Short-Term Energy Outlook.

The 697.9 million st expected in 2019 would be the lowest production since 670.16 million st was produced in 1978.

Power-sector coal consumption is projected to be 558.3 million st in 2019 and 488.9 million st in 2020, compared with 636.5 million st in 2018.

Total consumption, including by petcoke plants and retail, is estimated at 610 million st in 2019 and 540 million st in 2020, down from 688 million st in 2018.

Coal is expected to make up 25% of US power generation in 2019 and 22% in 2020, down from 27.4% generated from coal in 2018. Coal’s estimated share in 2020 would be cut in half from a decade earlier, when coal made up 44.8% of the power in 2010.

Power generation from natural gas is estimated at 37% in 2019 and 38% in 2020, up from 35.1% in 2018.

The increase is largely from cheaper gas prices and a boost in dry gas production, which is forecast to average 92.12 Bcf/d in 2019 and 94.95 Bcf/d in 2020, up from 83.33 Bcf/d averaged in 2018.

The EIA projects the spot Henry Hub gas price to average $2.71/MMBtu this year and $2.58/MMBtu in 2020, compared with $3.27/MMBtu in 2018.

By 2020, coal production and consumption are expected to drop 44% and 48.6%, respectively, from 2010 values, while natural gas production is estimated to increase by 62.5% during the decade.

Coal exports are projected to be 93 million st in 2019 and 83.5 million st in 2020, down from 115.6 million st exported in 2018, which was the second-highest total on record, behind only 2012’s 126 million.

Thermal coal export volumes are estimated at 39.6 million st in 2019 and 37.3 million st in 2020, down from 54.1 million st in 2018.

The remaining 53.4 million st in 2019 are expected to be metallurgical coal exports, while 2020 exports are projected at 46.2 million st. In 2018, the US exported 61.5 million st of met coal.

Exports are expected to make up 13.3% of the total US coal production in 2019 and 13.8% in 2020, down from 13.9% in 2018, according to EIA data.

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