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Short-Term Energy Outlook

Release Date: July 12, 2016  |  Next Release Date: August 9, 2016  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Coal

Coal Supply

U.S. coal production in June was 57 million short tons (MMst), a 6 MMst (13%) increase from the previous month and 9 MMst (14%) lower than in June 2015. In 2016, coal production is expected to decrease by more than 100 MMst for the second consecutive year, with a forecast annual decline of 168 MMst (19%), which would be the largest decline in terms of both tons and percentage since data collection began in 1949.

In 2016, forecast coal production in the Appalachian region and in the Western region declines by 18% and by 21%, respectively, while Interior region production declines by 11%. In 2017, total U.S. coal production is expected to increase by 43 MMst (6%), with almost all of the increase coming from the Appalachian region and the Interior region. Coal in these two regions has the advantage of lower transportation costs and a higher heat content per ton compared with Western region coal.

According to the most recent data, electric power sector coal stockpiles were 196 MMst in April, a 2 MMst (1%) increase from March. The end-of-April coal stocks were 29 MMst (17%) higher than the April 2015 level and 31 MMst (19%) higher than the previous 10-year average for the month. Warmer-than-normal winter temperatures and coal's continuing loss of market share to natural gas for electric power generation contributed to the increase in coal stockpiles. EIA expects that the level of coal stockpiles will decrease over the summer, and power sector inventories will end 2016 at 159 MMst.

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 66 MMst (9%) in 2016. The decline is a result of competition with low-priced natural gas and of warmer-than-normal winter weather in the first quarter of 2016 that reduced overall electricity generation. Retirements of coal-fired power plants reduce coal-fired generation capacity in the forecast period, primarily in 2016. The retirements are the result of increased competition with natural gas generation and the industry response to the implementation of the U.S. Environmental Protection Agency's (EPA) Mercury and Air Toxics Standards (MATS). Coal consumption in the electric power sector is forecast to increase by 23 MMst (3%) in 2017, mostly because of rising natural gas prices coupled with increasing electricity generation.

Coal Trade

Slower growth in global coal demand and lower international coal prices have contributed to the recent decline in U.S. coal exports. April 2016 coal exports were 1 MMst (12%) lower than in March, but they were 36% (3 MMst) lower than the amount exported in April 2015. EIA forecasts U.S. coal exports to decline by 15 MMst (20%) in 2016 and by 4 MMst (7%) 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 be 11 MMst in both 2016 and 2017.

Coal Prices

EIA estimates the delivered coal price averaged $2.23/MMBtu in 2015. Forecast prices are $2.19/MMBtu in 2016 and $2.24/MMBtu in 2017.

U.S. Coal Summary
  2014 2015 2016 2017
Prices (dollars per million Btu)
Electric Power Sector 2.36 2.23 2.19 2.24
Supply (million short tons)
U.S. Coal Production 1000.0 895.4 727.6 770.4
Imports 11.3 11.3 11.0 10.8
Exports 97.3 74.0 59.0 54.9
Consumption (million short tons)
Electric Power Sector 851.6 739.7 673.6 696.6
Other Sectors 66.1 61.9 59.2 59.1
Total Consumption 917.7 801.6 732.5 755.7
End of Period Inventories (million short tons)
Electric Power Sector 151.5 197.1 158.6 139.9
Total Inventories 197.7 242.8 203.8 184.3

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