US coal consumption projections trending down: EIA

A NEW report from the Energy Information Administration has some concerning observations about long-term forecasts for declining coal use in the US.
US coal consumption projections trending down: EIA US coal consumption projections trending down: EIA US coal consumption projections trending down: EIA US coal consumption projections trending down: EIA US coal consumption projections trending down: EIA


Donna Schmidt

In a 13-page preview of its Annual Energy Outlook 2012, the federal agency said that the nation’s expected share of electricity generation stemming from coal drops to 39% in the next 25 years, much less than the 49% share seen as recently as 2007. In addition to a greater need for environmental compliance, it cited continued competition from natural gas and renewable plants as well as a slow growth in power demand.

Meanwhile, average minemouth prices are expected to increase by 1.4% annually from $1.76 per million Btu in 2010 to $2.51 per million Btu in 2035, with the figures provided in 2010 dollars.

The EIA said that the upward trend of pricing reflects its projection that cost savings from the technological improvements of mining will be outweighed by a rise in production cost increases that will be taken on when operators move into more costly reserves.

The newest projection is a change from 2011’s overview, when the agency expected coal prices to remain flat.

US coal consumption, it went on to say, is projected to total 20.6 quadrillion British thermal units, also known as quads, in 2025, or almost 10% down from last year's forecast of 22.6 quads. Consumption for 2035 is forecast was also reduced from 24.3 to 21.6 quads.

“Although coal remains the leading fuel for US electricity generation, its share of total generation is lower in [this year’s] reference case than was projected in the [2011] reference case,” the agency said.

“As a consequence, while still growing in most projection years after 2015, total coal production is lower in the [2012] reference case than in the [2011] reference case, with the gap between the two outlooks increasing substantially over the period from 2020 to 2035.”

The EIA said domestic coal production rises 0.3% per year on average from 22.1 quadrillion Btu (or 1,084 million short tons) in 2010 to 23.5 quadrillion Btu (or 1,188 million short tons) in 2035.

It noted that mines in the western US coalfield make up almost all of the projected increase in production overall, but even it is expected to decline between 2010 and 2015 amid lower natural gas prices and plans to take a significant number of coal-fired generation facilities offline.

The new report said that its projections assume no changes to current laws and regulations for the production period’s timeline.

The EIA releases its long-term projections annually, with a preview shared earlier in the year and a full report in the late spring.

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