Coal production in the fourth quarter drops 17 percent, hitting a 42-year low, EIA says

Energize Weekly, October 16, 2019

Coal production in the U.S. is projected to fall 159 million short tons in the fourth quarter of 2019, a 17 percent drop when compared to the same period in 2018, according to the federal Energy Information Administration (EIA).

For the year, the EIA is forecasting a 10 percent drop in coal production, about 76 million short tons, to 679 million short tons compared to 2018, according to the EIA’s Short-Term Energy Outlook. The fourth quarter numbers also mark the lowest production in 42 years.

“Declining coal demand and related bankruptcies, ownership changes, and sudden mine closures have contributed to a fluctuating production environment in the Western region (largely the Powder River Basin), which produces more than half of the U.S. coal supply,” the EIA s

In Wyoming, the largest coal producer in the country, two of its biggest coal producers, Cloud Peak Energy and Blackjewel, filed for Chapter 11 bankruptcy. Blackjewel also operates in Kentucky.

In June, Cambrian Coal LLC, which operates in Kentucky and Virginia, filed for Chapter 11 bankruptcy, and in October, bankrupt Blackhawk Mining LLC, closed four West Virginia mines after metallurgical coal prices neared a three-year low.

Westmoreland Coal, the nation’s largest coal company, emerged from bankruptcy in March 2019 as a private company.

EIA said it expects coal production to decline further by 11 percent in 2020 to 603 million short tons.

Coal-fired power plants are continuing to close with 13 gigawatts (GW) of plant capacity retired in 2018.

Meanwhile, natural gas’ share of the market grew in 2019 with the EIA forecasting U.S. natural gas production for the year averaging 91.6 billion cubic feet per day (Bcf/d), a 10 percent increase over the 2018 average.

“EIA expects that natural gas production will grow much less in 2020 because the delayed effect of low prices in the second half of 2019 will reduce natural gas-directed drilling in 2020,” the agency said. “EIA forecasts natural gas production in 2020 will average 93.5 Bcf/d.”

Utility-scale electricity generation from natural gas is expected to rise to 37 percent of all generation in 2019 from 34 percent in 2018. The share of coal-fired generation is expected to slip to 25 percent in 2019 from 28 percent in 2018. The EIA projects coal’s share dropping to 22 percent in 2020.

Wind, solar and other non-hydropower renewable generation make up about 10 percent of the generation mix, and the EIA expects that to increase slightly by 2020. Nuclear is also expected to hold steady at 20 percent of the nation’s electricity generation.

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