About 93% of total coal consumed in the U.S. in 2011 was used in the electric power sector, but electric sector coal consumption dropped by an estimated 40 million short tons—or 4% compared to 2010—as generators turned to cheaper natural gas instead, the Energy Information Agency (EIA) says.
The EIA’s February Short-Term Energy Outlook notes that power sector coal consumption is forecast to decline an additional 2% in 2012 “as generation from natural gas, nuclear, and wind increases and electricity consumption grows by less than 1 percent.” Coal consumption for power will continue falling in 2013, the agency forecasts.
Prices for coal delivered to the power sector have, meanwhile, increased steadily over the past decade, the EIA says. In 2011, the average delivered coal price was $2.40 per MMBtu—a 5.8% increase from 2010.
“Looking forward, several factors are exerting downward pressure on the average delivered coal price, including lower demand for coal to generate electricity due to lower natural gas prices and concerns about the effects of the implementation of pending environmental requirements,” the agency says in its report. The average delivered coal price will likely be slightly lower than the 2011 level in 2012 and 2013, it forecasts.
Though consumption in the power sector has slowed, coal production rose about 0.4% from its 2010 level, after falling sharply during 2009. This growth was driven by exports to other countries, which climbed to their highest level in two decades, the agency’s weekly coal production report shows.
The U.S. exported a total of 107 million short tons of coal in 2011—up 31% compared to 2010 and the most since 1991. Exports of steam coal were estimated at 37 million short tons in 2011, the highest since 2008, and exports of metallurgical coal reached record levels in 2011, about 70 million short tons. Exports primarily went to India, Japan, and South Korea, whose supplies were disrupted when flooding last year inundated mines in Australia, the world’s largest coal exporter.
Production gains differed regionally in the U.S. Western coal production, which includes the Powder River Basin in Wyoming, declined 1.2% last year to 584 million short tons. Western production was also affected by severe flooding in the spring and summer, particularly in Montana, which had a decrease in production of 7% from 2010. The decrease in Montana production was enough to move it out of the top five producing states, the EIA says.
Appalachian coal output increased 0.6% to 339 million short tons. “The region produces bituminous coal, which is used for both electricity generation and as metallurgical coal to produce coke that is used in the steel-making process. The increase in this region’s production reflects the large jump in exports, of which a large portion is metallurgical coal,” the agency said.
Production from the Interior region of the U.S. rose 6.4% to 166 million short tons. In Texas, coal production surged 4 million short tons in 2011, accounting for about 40% of the Interior region’s output increase. Most of this region’s coal was used to generate power for plants in that state.
Sources: POWERnews, EIA