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Short-Term Energy Outlook

Release Date: November 10, 2015  |  Next Release Date: December 8, 2015  |  Full Report    |   Text Only   |   All Tables   |   All Figures


Coal Supply

Forecast U.S. coal production in 2015 declines by 92 million short tons (MMst) (9%). Forecast production decreases in all coal-producing regions, with the largest percentage decrease occurring in the Appalachian region (12%). Interior region production, which includes the Illinois Basin, is expected to decline by 7%, the first annual decline since 2009, while Western region production is expected to fall by 8%, dropping below 500 MMst for the first time since 1998. U.S. coal production is expected to decrease by an additional 27 MMst (3%) in 2016, but Interior region production is projected to grow by nearly 3%, reflecting competitive advantages compared with other coal-producing regions. These factors include the higher heat content of the coal, closer proximity to major markets than coal produced in the Western region, and lower mining costs than Appalachian-produced coal. Electric power sector coal stockpiles were 158 MMst in August, a 1% decrease from July. This decrease in coal stockpiles follows the normal seasonal pattern of coal stockpiles falling during the summer months. Despite this decrease, coal stockpiles are still relatively high because of the loss in market share to natural gas for power generation. August coal inventories averaged 145 MMst during the previous 10 years (2005-14).

Coal Consumption

EIA forecasts total coal consumption to decrease by 9% in 2015, mainly as a result of a 9% drop in electric power sector consumption. Lower natural gas prices are the key factor driving the decrease in coal consumption. Low natural gas prices make it more economic to increase utilization at natural gas-fired generating units and to decrease utilization at coal units. The retirements of coal-fired power plants, stemming from both increased competition with natural gas generation and the implementation of the Mercury and Air Toxics Standards (MATS), also reduce coal-fired capacity in the power sector in 2015, but the full effect will not be evident until 2016.

Higher forecast natural gas prices in 2016 are expected to contribute to higher utilization rates among the remaining coal-fired power plants, which partially offsets the effect of coal-plant retirements. Coal consumption in the electric power sector is forecast to remain relatively unchanged in 2016.

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 will continue to provide an advantage to mines in other major coal-exporting countries compared with U.S. producers. Coal exports for the first eight months of 2015 are down 21% compared with the same period in 2014. Forecast coal exports fall by 18 MMst (19%) to 79 MMst in 2015, and then decrease by another 7 MMst (9%) in 2016 as the current global coal market trends continue. Forecast U.S. coal imports, which increased by 2 MMst in 2014 to more than 11 MMst, stay near that level in 2015 and 2016.

Coal Prices

The annual average coal price to the electric power sector averaged $2.36/MMBtu in 2014. EIA expects the delivered coal price to average $2.25/MMBtu in 2015 and to increase by one cent to average $2.26/MMBtu in 2016.

U.S. Coal Summary
  2013 2014 2015 2016
Prices (dollars per million Btu)
Electric Power Sector 2.34 2.36 2.25 2.26
Supply (million short tons)
U.S. Coal Production 984.8 999.7 907.5 880.4
Imports 8.9 11.3 11.6 10.8
Exports 117.7 97.3 79.2 72.3
Consumption (million short tons)
Electric Power Sector 858.0 851.4 773.4 773.0
Other Sectors 66.5 65.4 62.5 62.5
Total Consumption 924.4 916.9 835.8 835.5
End of Period Inventories (million short tons)
Electric Power Sector 147.9 151.4 157.1 152.2
Total Inventories 200.3 203.2 208.6 203.1

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