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US 2020 coal production expected to fall 28.9% on year to 57-year low: EIA

The US is estimated to produce 501.3 million st of coal in 2020, the US Energy Information Administration said July 7, lowering its estimate from a month ago by 28.7 million st, or 5.4%.

The 2020 production would be 28.9% lower than the 705.3 million st produced in 2019, while 2021 production is estimated at 535.9 million st, the EIA said in its July Short-Term Energy Outlook.

The 501.3 million st expected in 2020 would be the lowest production since 477.2 million st was produced in 1963.

Since the beginning of the year, the EIA’s 2020 production estimate has dropped by 95.3 million st due to the coronavirus pandemic, which has resulted in a decrease in US power generation and coal production cutbacks by miners.

Power-sector coal consumption is projected to be 376.9 million st in 2020 and 462 million st in 2021, compared with 539.4 million st in 2019.

Total consumption, including by petcoke plants and retail, is estimated at 423.2 million st in 2020 and 511.5 million st in 2021, down from 587.3 million st in 2019.

The EIA said consumption is expected to rise in 2021 due to higher natural gas prices.

Coal is expected to make up 17.6% of US power generation in 2020 and 21.2% in 2021, down from 24.3% generated from coal in 2019. Coal’s estimated share in 2020 would be cut by more than half from a decade earlier, when coal made up 44.8% of the power in 2010.
RENEWABLES PROJECTED TO SURPASS COAL IN 2020

Renewables are projected to make up 20.1% of the stack in 2020 and 21.9% in 2021, up from 17.4% in 2019. It would be the first time that renewables had a higher generation share than coal.

Power generation from natural gas is estimated at 40.6% in 2020 and 35.6% in 2021, compared with 37.3% in 2019.

The estimated increase in 2020 is largely from cheaper gas prices, despite a drop in dry gas production, which is forecast to average 89.3 Bcf/d in 2020 and 84.2 Bcf/d in 2021, down from 92.2 Bcf/d averaged in 2019.

The EIA projects the spot Henry Hub gas price to average $2/MMBtu this year and $3.22/MMBtu in 2021, compared with $2.66/MMBtu in 2019.

By the end of 2020, coal production and consumption at the power sector are expected to drop 53.8% and 61.3%, respectively, from 2010 values, while natural gas production is estimated to increase by 62.6% during the decade.

Coal exports are projected to be 63.1 million st in 2020 and 67.2 million st in 2021, down from 92.9 million st exported in 2019.

Thermal coal export volumes are estimated at 25.1 million st in 2020 and 26.5 million st in 2021, down from 37.7 million st in 2019.

The remaining 38 million st in 2020 are expected to be metallurgical coal exports, while 2021 exports are projected at 40.7 million st. In 2019, the US exported 55.1 million st of met coal.

Exports are expected to make up 12.6% of the total US coal production in 2020 and 12.5% in 2021, down from 13.2% in 2019, according to EIA data.
Source: Platts

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