For decades, coal served as the primary fuel source for electricity generation in the United States. In what may be a signaling of the fossil fuel’s demise, the first quarter of 2016 showed the lowest domestic coal production since 1981.
Electricity generation accounts for 90% of coal usage in the United States, but business has proven difficult for coal producers in recent years. Coal companies have been faced with challenging market conditions in the form of cheaper sources of alternative fuel, as well as high adoption of renewable resources nationwide. Since its peak utilization in 2007, coal consumption has dropped approximately 33%.
Due in part to the implementation of energy efficient devices and employment of sustainable consumer habits, the demand for electricity across the country has been stunted. This decrease in electricity demand has led to a lesser need for the coal to power generators throughout the U.S. Moreover, natural gas prices have nearly hit an all-time low. These low prices – paired with the extensive environmental regulation surrounding coal – make it an easy decision for companies to generate their electricity using cleaner burning fuel. In 2008, coal powered roughly half of electricity generators in the United States. That number has dropped to around 30% in 2016.
In addition to growing reliance on alternative and renewable resources, outside factors have also contributed to the cutback in coal production seen this year. During the final quarter of 2015, initial weather forecasts called for a cold winter, causing power plants to stock up on coal in order to generate greater amounts of electricity. Once the mild winter of early 2016 hit, companies generating electricity chose to burn fuel from their stockpiles rather than purchase more from producers, further decreasing demand throughout the country.
Not daunted by low production and an abnormally warm winter, Rick Curtsinger, a spokesman for major coal producer Cloud Peak Energy, was quoted as saying:
“Eventually things are going to turn around … The U.S. and the world will continue to use significant amounts of coal going forward.”
Despite Curtsinger’s optimism, the first quarter of 2016 showed demand at a low point not seen since widespread coal mine strikes in 1981. From January to April, coal production dropped to 173 million tons – down 17% from Q4 2015.
Read more here – “Coal Production Plummets to Lowest Level in 35 Years,” (Clifford Krauss, New York Times)