April 10, 2019 Read More →

EIA: U.S. coal production expected to fall by 72 million tons in 2019

S&P Global Market Intelligence ($):

The federal government’s short-term outlook on energy once again trimmed expectations for future coal production from the U.S.

U.S. coal production decreased by about 19 million tons, or 2%, to 756 million tons in 2018 compared to the prior year, the U.S. Energy Information Administration wrote in its April short-term energy outlook. Coal production is forecast to continue to fall as domestic consumption and export demand are expected to decline through 2020.

More than 7 GW of coal-fired generation is expected to retire by the end of 2020, contributing to a wave of recent retirements as electricity generators transition to other fuels. Coal production is expected to decline 9% to 684 million tons in 2019 before falling another 6% to 640 million tons in 2020. The forecast numbers are already significantly lower than the EIA’s March forecast when the outlook suggested coal production would fall to 695 million tons in 2019 before declining to 664 million tons in 2020.

About 10% of U.S. coal-fired generation will be retired between 2018 and 2023, Moody’s Investors Service wrote in a January note to investors, adding that recent policy actions are not enough to reverse that trend.

“Export opportunities for U.S. coal producers support free cash flow generation at least through 2019, but will diminish in the medium term,” the Moody’s note said. “U.S. coal producers’ export economics depend on relatively high pricing and would be much less profitable in an environment of lower prices, since they are far from their export markets.”

The EIA forecast that exports of metallurgical and steam coal will decline in 2019 and 2020.

More ($): EIA’s monthly energy outlook trims near-term coal production forecast again

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