By January 8, 2016 Read More →

US coal production plunges as cheaper, cleaner power sources curb demand: Gov’t report

US coal production fallen to lowest level in nearly 30 years

US coal production

US coal production is down, leading to bankruptcies and layoffs at mining companies as well as stressed state budgets and layoffs in sectors such as railroads.  Energy Trends Insider photo.

WASHINGTON _ US coal production has fallen to its lowest level in nearly 30 years as cheaper sources of power and stricter environmental regulations reduce demand, according to preliminary government figures.

A report released Friday by the US Energy Information Administration estimates 900 million short tons of coal were produced last year, a drop from about 1 billion short tons in 2014. That’s the lowest volume since 1986.

The slump has led to bankruptcies and layoffs at mining companies, but the effects have rippled outward, stressing state budgets and forcing layoffs in other sector such as railroads, which are transporting less coal.

Power plants are increasingly relying on cheaper and cleaner-burning natural gas to provide electricity and comply with regulations aimed at reducing pollution that contributes to climate change. The average daily spot price for natural gas at the benchmark Henry Hub fell to $2.61 per million British thermal units last year, a 40 per cent decrease from 2014, according to the government report.

A sweeping agreement adopted last month by nearly 200 countries determined to further reduce greenhouse gas emissions is likely to make coal an even less viable choice in the decades ahead.

Last year’s drop in demand hit hardest in the central Appalachian basin, where production plunged 40 per cent below its annual average from 2010 through 2014, according to the report.

The US coal industry didn’t get any help overseas last year either, as exports to the United Kingdom, Italy and China plummeted by more than 50 per cent. Overall, U.S. exports of coal dropped by about 21 per cent last year, the report estimated.

The Canadian Press

Posted in: News

Comments are closed.