By - Jim Vess

Coal consumption by U.S. utility industry hit a 34-year low in 2017

Energize Weekly, August 15, 2018

U.S. coal consumption for electricity generation slipped to its lowest level in 34 years in 2017, continuing a four-year skid, according to the federal Energy Information Administration (EIA).

The utility industry used 661 million short tons of coal in 2017, as consumption and shipments by all modes of transport declined.

Almost 70 percent the power-sector coal was shipped in part or completely by rail. The remainder was moved by river barge, truck or other means. Overall, electric-power coal use was down 376 million short tons, 36 percent, from 2008 when coal production reached its highest level.

The amount of coal shipped by rail in 2017 was 432 million short tons, a slight increase from 2016, but 33 percent lower than the 647 million short tons shipped by rail in 2008.

Barge shipments increased to 12 percent of coal deliveries from 7 percent in 2008. “Coal produced in the Illinois Basin relies on shipments along the Ohio River and its tributaries for a significant share of its production,” the EIA said.

Trucking’s share of shipments dropped to 9 percent in 2017 from 12 percent in 2008. That corresponds to a decline in Appalachian production that supplied nearby powers plants, which have closed, that relied on trucked coal.

Since 2010, nearly 40 percent of the nation’s fleet of coal-fired power plant capacity has either been shut down or designated for closure. There are about 260 operating coal-fired plants. 

“The cost of transporting coal can vary greatly along different routes,” the EIA said. “In addition to costs associated with a particular mode of transport, factors such as route length, availability of transport mode, supply source options, and the competition between coal and other commodities for transport can affect the transportation cost.”

Still the real delivered cost—accounting for the price of coal plus transport—has fallen, dropping to an EIA estimate of less than $40 a ton in 2017, or about $8 a ton or 16 percent less than it was in 2008.

During that same period, transport costs overall fell 4 percent, as a 9 percent drop in trucking costs and a 39 percent decline in river barge costs offset a 3 percent increase in rail shipping charges.

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