Cheap US Coal Bounces Back

  • Date: 11/01/14
  • John Hanger's Facts of the Day

As gas prices begin to rise in the US, cheap coal is bouncing back. But coal’s good times looks to be brief.

As recently as 2008,  coal had a [US] generation market share of 48%, and then cheap gas caused coal’s market share to collapse to 37% by 2012. Coal lost an incredible 22% of its power generation market share in just 4 years!

But gas prices started rising in the second-half of 2012 and have continued rising through early 2014. With rising gas prices, coal’s decline in power market share reversed and rose to 39.1% in 2013, though coal’s market share was below 40% for the last 2 years.

What lies ahead for coal in 2014? And beyond?  Here is what EIA says:

“… the share of generation fueled by coal increases from 39.1% in 2013 to 40.2% in 2014. As the retirements of coal power plants pick up in 2015 in response to the implementation of the Mercury and Air Toxics Standards, EIA expects the share of coal to fall to 38.6% of total generation while the natural gas share rises back to 27.6%.”

Again fuelled by rising gas prices, EIA expects coal to have another good year in 2014, with its market share breaking above 40% for the first time in two years. But coal’s good times looks to be brief.

EIA expects coal will lose market share once more starting in 2015, when substantial coal capacity will retire rather than install pollution controls to limit mercury and other toxic emissions.

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