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Short-Term Energy Outlook

Release Date: November 12, 2014  |  Next Release Date: December 9, 2014  |  Full Report    |   Text Only   |   All Tables   |   All Figures


According to data compiled by the Association of American Railroads (AAR), year-to-date rail traffic was up 4.5% as of November 1. AAR data show that, despite the large increase in overall rail traffic, coal shipments were only up 0.3%. Shipments of petroleum and grain are up year-to-date by 13.4% and 15.0%, respectively.

On October 8, the U.S. Surface Transportation Board (STB) announced that it is requiring all major freight (Class I) railroads that operate in the United States to publicly file weekly data reports regarding service performance. The measure was in response to ongoing rail service problems, particularly in the Midwest. These data, for which no ending date for their submission has been determined, are in addition to the STB annual requests for service assessments from all Class I railroads.

Several utilities in Minnesota and other Midwest states have cut back or curtailed operation of coal-fired generating units to conserve coal inventories. As a result, the governor of Minnesota and members of the state's congressional delegation requested that the Federal Energy Regulatory Commission (FERC) act to "convene a meeting to hear from utility and railroad representatives to discuss railroad coal-delivery matters and their impact on electric markets and reliability." The letter asked FERC "to protect utility consumers in Minnesota and the other impacted states from the adverse consequences of BNSF's service failures." BNSF, in a response to a petition filed earlier, stated to the STB that it would deliver approximately 24 million tons of coal in October, its highest total since August 2013.

Coal Supply

EIA estimates that coal production for the first 10 months of this year, 823 million short tons (MMst), was slightly lower (by 2 MMst, or 0.3%) than production over the same period last year. EIA expects that annual production will grow by 0.8% to 992 MMst in 2014. In 2015, forecast U.S. coal production increases by 0.7% to 999 MMst.

Electric power sector coal inventories fell to 121 MMst at the end of August, 4 MMst lower than the previous month. This stock drawdown was 1 MMst less than the same time last year. Coal inventories are more than 33 MMst lower when compared with last year.

Coal Consumption

Higher electricity demand and higher power sector natural gas prices are contributing to an increase in electric power sector coal consumption this year. EIA projects total coal consumption of 936 MMst in 2014 (870 MMst in the electric power sector), an increase of 1.2% from last year. Total coal consumption is projected to fall by 1.2% in 2015, as retirements of coal power plants rise in response to the implementation of the Mercury and Air Toxics Standards, electricity sales growth slows to 0.7%, and natural gas prices fall relative to coal prices.

Coal Trade

Exports of coal are projected to decline to 96 MMst in 2014 from 118 MMst in 2013, primarily because of slowing world coal demand growth, lower international coal prices, and increasing coal output in other coal-exporting countries. With no improvement in conditions in global markets, EIA projects coal exports to fall below 90 MMst in 2015, the lowest since 2010. EIA expects coal imports, which account for about 1% of U.S. coal consumption, to total 11.4 MMst in 2014 and fall slightly to 10.7 MMst in 2015.

Coal Prices

The annual average coal price to the electric power industry fell from a historically high $2.39/MMBtu in 2011 to $2.35/MMBtu in 2013. EIA expects the average delivered coal price to be $2.36/MMBtu in 2014 and remain at that level in 2015.

U.S. Coal Summary
  2012 2013 2014 2015
Prices (dollars per million Btu)
Electric Power Sector 2.38 2.35 2.36 2.36
Supply (million short tons)
U.S. Coal Production 1016.4 984.0 992.1 998.7
Imports 9.2 8.9 11.4 10.7
Exports 125.7 117.7 96.0 89.4
Consumption (million short tons)
Electric Power Sector 823.6 858.4 870.1 859.0
Other Sectors 65.6 66.8 66.0 65.6
Total Consumption 889.2 925.1 935.9 924.6
End of Period Inventories (million short tons)
Electric Power Sector 185.1 148.0 129.7 132.3
Total Inventories 238.9 197.5 180.2 184.8

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