Coal Production Plummets to Lowest Level in 35 Years RSS Feed

Coal Production Plummets to Lowest Level in 35 Years

Coal production in the United States is plummeting to levels not seen since a crippling coal strike 35 years ago, according to a report released by the Energy Department on Friday.

The coal industry in recent years has been plagued by bankruptcies as power utilities increasingly moved to replace coal with cheap natural gas and renewable sources, like solar and wind energy. Coal was once the dominant source of the nation’s electricity generation, but consumption of the fossil fuel has declined by nearly a third since its peak in 2007.

Once gradual, the decline in coal mining appears to be picking up momentum. Coal production in the United States of 173 million tons for January through March was the lowest in any quarter since 1981. The quarterly production total represented a 17 percent decline from the previous quarter, the steepest quarter-over-quarter drop in nearly 32 years.

Part of the reason for the production drop were the above-normal temperatures through much of the nation in recent months, which lowered electricity demand. Utilities had stockpiled an additional 34 million tons of coal during the final months of 2015, anticipating a colder winter.

But the Energy Department noted broader forces at play in its brief report.

“Coal production has declined because of increasingly challenging market conditions for coal producers,” the report said. “In addition to complying with environmental regulations and adapting to slower growth in electricity demand, coal-fired generators also are competing with renewables and with natural gas-fired electricity generation during a time of historically low natural gas prices.”

The biggest declines in production came in the Powder River basin of Montana and Wyoming.

The Obama administration has suspended new coal leasing on federal lands, and worked to tighten environmental regulations on burning of coal. Those efforts have been challenged in the courts, but could eventually gain momentum as Washington complies with commitments made last year during climate talks in Paris.

In recent years, coal companies have pinned their hopes on exports, as coal remains an important power source in Asia and Europe. But slow economic growth and low international coal prices, also depressed by the increase in liquefied natural gas trade, has contributed to a decline in coal exports.

The Energy Department recently reported that coal exports in March were 32 percent below the same month in 2015. The department forecasts an annual coal export decline of 10 percent this year and 12 percent in 2017.

Read full article at NY Times