‹ Analysis & Projections

Short-Term Energy Outlook

Release Date: June 7, 2016  |  Next Release Date: July 12, 2016  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Coal

Coal Supply

U.S. coal production in May was 50 million short tons (MMst), a 4 MMst (10%) increase from the previous month but 19 MMst (28%) lower than in May 2015. Forecast coal production is expected to decrease by 155 MMst (17%) in 2016, 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 19%, respectively, while Interior region production declines by 11%. In 2017, total U.S. coal production is expected to increase by 27 MMst (4%).

According to the most recent data, electric power sector coal stockpiles were 194 MMst in March, a 5 MMst (3%) increase from February. This March stock build deviates from the normal seasonal pattern where stocks decrease during the winter months, and end-of-March coal stocks were at high levels. Warmer-than-normal temperatures experienced throughout the United States in March 2016 (and the winter as a whole) and coal's continuing loss of market share to natural gas for electric power generation contributed to the increase in coal stockpiles. March stocks were 25% (39 MMst) higher than the March 2015 level.

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 72 MMst (10%) in 2016. The decline is a result of competition with low-priced natural gas and from warmer-than-normal winter weather in the first quarter of the year that reduced overall electricity generation. Coal consumption in the electric power sector is forecast to increase by 27 MMst (4%) in 2017, mostly because of rising natural gas prices coupled with increases in 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 Trade

Slower growth in global 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.

Coal exports in March were 5 MMst, up 15% from February but 32% lower than the amount exported in March 2015. EIA forecasts U.S. coal exports to decline by 8 MMst (10%) in 2016 and by 8 MMst (12%) 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 12 MMst in 2016 and 11 MMst in 2017.

Coal Prices

EIA estimates the delivered coal price averaged $2.23/MMBtu in 2015. Forecast prices are $2.18/MMBtu in 2016 and $2.20/MMBtu in 2017.

U.S. Coal Summary
  2014 2015 2016 2017
Prices (dollars per million Btu)
Electric Power Sector 2.36 2.23 2.18 2.20
Supply (million short tons)
U.S. Coal Production 1000.0 895.4 740.8 768.0
Imports 11.3 11.3 11.6 10.8
Exports 97.3 74.0 66.2 58.1
Consumption (million short tons)
Electric Power Sector 851.6 739.7 667.4 694.1
Other Sectors 66.1 61.9 59.9 59.9
Total Consumption 917.7 801.6 727.3 753.9
End of Period Inventories (million short tons)
Electric Power Sector 151.5 197.1 181.6 159.2
Total Inventories 197.7 242.8 226.8 203.5

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