Coal Consumption Remains High in the United States
Haley Zaremba

While many countries worldwide are moving away from a dependence on coal, the U.S. still relies heavily on the dirtiest fossil fuel for its power. The U.S. has experienced an accelerated green transition since the introduction of the Biden administration’s Inflation Reduction Act (IRA) in 2022, which has spurred a massive increase in the country’s renewable energy capacity and attracted billions in private funding. 

However, this shift has not stopped the U.S. reliance on coal, as the third-largest consumer of coal in the world after China and India. The U.S. continues to be the fourth-largest producer of coal, after China, India and Indonesia, and it has more coal reserves than any other country. The U.S. had 206 active coal plants remaining in 2023. Around a quarter of domestic coal generation is expected to be retired by 2040 but the pace of planned retirements slowed last year as energy demand increased. 

Coal production in the U.S. has fallen in recent years, as oil and gas production increased, and the country expanded its renewable energy capacity. According to the U.S. Energy Information Administration (EIA), U.S. coal production decreased 2.7 percent year over year from 2022 to 2023, to 577.9 million short tons (MMst). Meanwhile, U.S. coal consumption fell by 17.4 percent in this period, from 515.5 MMst to 425.9 MMst, and the electric power sector contributed 387.2 MMst (90.9 percent) of total U.S. coal consumption in 2023. 

The EIA forecast that coal’s share of U.S. electricity generation would fall to a record low of 16.1 percent in 2024, as several coal mines were retired and alternative energy capacity increased. Non-coal power generation was expected to be sourced from natural gas, 41.6 percent; nuclear, 19 percent; and renewable energy sources, 22.8 percent. The EIA expected coal production in 2024 to total 499 MMst, marking a decrease of 14.2 percent from 2023, and fall by a further 5 percent in 2025, to 474 MMst. It forecast that the electricity power sector would consume 384 MMst in 2024, around 1 percent less than in 2023, and an additional 2 percent less in 2025. 

However, as coal production begins to decrease faster than consumption, it will likely lead to a reliance on existing inventories, until the alternative energy capacity increases. Coal inventories stood at 120 MMst by the end of July last year and are expected to fall to around 84 MMst by the end of 2025.

In terms of exports, the EIA expected coal exports to total 103 MMst in 2024, marking a 3 percent increase on 2023. This figure is expected to climb by an additional 0.8 percent in 2025, to 103.8 MMst. The EIA stated, “Although coal exports in our forecast remain robust, ongoing declines in coal production are the result of less coal being used to generate electric power domestically due to relatively low natural gas prices and 12 GW of coal-fired electricity generating capacity going into retirement.” 

In addition to heavy domestic reliance on coal, an increase in coal consumption in Asia could drive growth in the U.S. coal export market. In 2024, India’s thermal coal imports rose by around 12 percent, while China’s rose by 8 percent, a trend which is expected to continue for several years. The IEA predicted in 2024 that by 2035, global electricity demand would be 6 percent higher than it had previously predicted, leading to a prolonged reliance on coal to meet this demand. 

While U.S. domestic coal use and production has fallen in recent years, under the new President Donald Trump administration, we could see this downward trend shift in a different direction. On his first day in office, Trump declared a national energy emergency, followed shortly after by the announcement that coal could be a fuel source for new electric generating plants. During a virtual appearance at the annual World Economic Forum in Davos, Trump stated, “They can fuel it with anything they want, and they may have coal as a backup — good, clean coal.” He added, “We have more coal than anybody.” Following Trump’s comments, U.S. coal producers’ shares climbed. The largest U.S. coal miner, Peabody Energy Corp., saw its shares increase by around 7.6 percent. 

Despite Trump’s support for coal as a ‘backup’ energy source, U.S. efforts to ramp up oil and gas output mean that natural gas is now cheaper, and coal is no longer economically viable in comparison. While coal might be phased out at a slower pace under Trump, most experts agree that coal is simply too expensive to make a meaningful comeback. While the increasing power demand will drive energy production, this demand will likely be met with higher gas output, as well as through the expansion of the country’s renewable energy capacity. 

By Haley Zaremba for Oilprice.com

  

 

 

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the Bay Area, and music/culture reviews.

 

 

 

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