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Short-Term Energy and Summer Fuels Outlook

Release Date: April 12, 2016  |  Next Release Date: May 10, 2016  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Coal

Coal Supply

EIA estimates that U.S. coal production in March 2016 was 52 million short tons (MMst), a 2 MMst (4%) decrease from the previous month and 29 MMst (36%) lower than in March 2015. Forecast coal production is expected to decrease by 143 MMst (16%) in 2016, which would be the largest annual percentage decline since 1958. In 2016, forecast Appalachian and Western region production declines by 14% and 20%, respectively, and Interior region production falls by 6%. In 2017, total coal production is expected to increase by 26 MMst (3%).

Interior region production is projected to account for more than 20% of production in 2016 and 2017, up from 13% of coal production 10 years ago. This increase in share reflects the Interior region's growing competitive advantages compared with other U.S. coal-producing regions, despite the higher sulfur content of its coal. These advantages include Interior coal's higher heat content, closer proximity to major markets than Western region coal, the prevalence of sulfur dioxide scrubbers at coal-fired electric generating units, and lower mining costs than Appalachian coal.

Electric power sector coal stockpileswere 189 MMst in January 2016, a 4% (8 MMst) decrease from December. This drop reflects the normal seasonal decline in stockpiles during the winter months. However, overall U.S. coal stockpiles are still very ample given the significant decline in coal's share of overall electricity generation. January 2016 stocks were 22% (34 MMst) higher than the level in January 2015.

Figure 21: U.S. Annual Coal Production

Coal Consumption

Coal consumption in the electric power sector, which accounts for more than 90% of total U.S. coal consumption, is forecast to decline by 50 MMst (7%) in 2016 as a result of mild winter weather and competition with natural gas. Coal consumption in the electric power sector is forecast to increase by 16 MMst (2%) in 2017 primarily because of rising natural gas prices. Retirements of coal-fired power plants reduce coal-fired generation capacity in the forecast period. The retirements are the result of increased competition with natural gas generation and the industry response to the implementation of the Environmental Protection Agency's (EPA) Mercury and Air Toxics Standards (MATS).

Coal Trade

Slower growth in world coal demand and lower international coal prices have contributed to a decline in U.S. coal exports. Lower mining costs, cheaper transportation costs, and favorable exchange rates are expected to continue to provide an advantage to mines in other major coal-exporting countries compared with U.S. producers over the next few years.

Coal exports in January 2016 were 4 MMst, down 9% from December 2015 and 44% lower than the amount exported in January 2015. EIA forecasts U.S. coal exports to decline by 15 MMst (21%) in 2016 and by 2 MMst (3%) in 2017.

Atlantic and Gulf Coast power generators are forecast to maintain their current levels of coal imports, which are primarily from Latin America. Imports are projected to total about 11 MMst in 2016 and 2017.

Coal Prices

EIA estimates the delivered coal price averaged $2.23/MMBtu in 2015. Forecast prices are $2.16/MMBtu in 2016 and $2.19/MMBtu in 2017.

U.S. Coal Summary
  2014 2015 2016 2017
Prices (dollars per million Btu)
Electric Power Sector 2.36 2.23 2.16 2.19
Supply (million short tons)
U.S. Coal Production 999.7 895.4 752.5 778.0
Imports 11.3 11.3 11.2 10.8
Exports 97.3 74.0 58.5 56.7
Consumption (million short tons)
Electric Power Sector 851.6 739.7 689.3 705.7
Other Sectors 66.1 61.9 60.0 59.2
Total Consumption 917.7 801.6 749.2 764.9
End of Period Inventories (million short tons)
Electric Power Sector 151.5 197.2 173.5 151.6
Total Inventories 197.7 242.9 218.6 195.9

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