By Nicole Pollack
Via- Wyoming News Exchange
CASPER — The coal industry has had an unexpectedly good year. After tumbling 18% in 2020 compared to 2019, U.S. thermal coal use is expected to climb 21% through the end of 2021, according to a report published recently by the International Energy Agency (IEA).
U.S. coal consumption had been steadily decreasing, and fell by half between 2010 and 2020, according to the report. This year marks the nation’s first increase in coal-fired electricity production since 2014.
Coal production, which fell by 24% in 2020 after industrial activity declined, is expected to increase 9% in 2021, with that recovery concentrated in major coal-producing states like Wyoming and West Virginia, the report found.
The boost will likely be fleeting, however: Both coal consumption and production are forecast to sink back to their 2020 lows by 2024.
It’s been evident for months that 2021 would be a strong year for coal. As the economy emerged from COVID-19 lockdowns and fuel demand returned to pre-pandemic levels, natural gas production lagged behind, driving up prices. With coal suddenly cheaper than natural gas, utilities began producing more electricity at coal-fired power plants and less at gas-fired plants.
Natural gas prices are also forecast to remain inflated through the winter, prompting utilities to replenish the coal stockpiles they’d reduced amid declining coal use, and causing prices for Powder River Basin coal to skyrocket in mid-November.
The spot price has remained above $30 per short ton — more than double the previous 10-year high of $13.25 — for the last six weeks.
Globally, coal-fired power generation is expected to reach an all-time high in 2021, the report found, driven primarily by China and India. Both countries experienced coal shortages this year, however, limiting its growth.
Those expanding markets are out of reach for landlocked Wyoming, which has struggled to export its coal overseas. The state’s years-long efforts to have a coal export terminal built on the West Coast, enabling the state to reach international markets, came to an end in June.
“We certainly have the reserves in place to be able to accommodate an export market, we just simply cannot get it out of the country right now,” Travis Deti, executive director of the Wyoming Mining Association, told the Star-Tribune in a past interview. “There are customers over there that want to buy our coal, we just cannot get it to them.”
Much of the local opposition to proposed coal terminals was linked to climate change. The report warns that the spike in global coal use threatens the world’s decarbonization goals.
“Coal is the single largest source of global carbon emissions,” IEA executive director Fatih Birol said in a statement. “This year’s historically high level of coal power generation is a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero.”