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Key Findings

Consumption of thermal coal, which is burned for electricity generation, is down 28% in the U.S. over the past decade, declining to 738 million tons in 2015 from 1.02 billion tons in 2005— an average annual drop of 29 million tons.

On average, U.S. coal production declined by 42 million tons per year from 2006 through 2015.

IEEFA sees a high likelihood for flat coal prices in 2017, and through 2025, because natural gas prices will remain low and—as a result—utilities will have little incentive to accept higher coal spot prices or to sign long-term contracts with marginally higher coal prices to hedge against future increases.

Executive Summary

The U.S. coal industry, after suffering one of its worst years ever in 2016, will continue its decline in 2017, though at a slower pace.

Consumption, production and prices will slump, but by a small amount compared to that seen in recent years. The overall effect will be one of flat performance at best.

While the industry will likely gain limited market share in day-to-day competition in regional electricity markets due to a relative increase in the price of natural gas, any such gains will be marginal.

Press release: IEEFA U.S. Coal Outlook 2017: Short-Term Gains Muted by Prevailing Weaknesses in Fundamentals

Please view full report PDF for references and sources.

Tom Sanzillo

Tom Sanzillo is Director of Financial Analysis for IEEFA. He has produced influential studies on the oil, gas, petrochemical and coal sectors in the U.S. and internationally, including company and credit analyses, facility development, oil and gas reserves, stock and commodity market analysis, and public and private financial structures. He also examines such areas as community and shareholder activism, institutional investment, public subsidies and Puerto Rico’s energy economics.

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David Schlissel

David Schlissel has over 30 years of experience as a regulatory attorney and consultant on energy and utility issues. He has testified as an expert witness before regulatory commissions in more than 35 states and before the U.S. Federal Energy Regulatory Commission and the Nuclear Regulatory Commission.

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