US 2020 coal production to fall 28.8% on year to 57-year low: EIA

Houston — The US is expected to produce 502.2 million st of coal in 2020, the US Energy Information Administration said Aug. 11, raising its estimate from a month ago by roughly 900,000 st, or 0.2%.

Such a 2020 production total would be 28.8% lower than the 705.3 million st produced in 2019, while 2021 production is forecast to rise to 564.1 million st, the EIA said in its August Short-Term Energy Outlook.

The 502.2 million st of production expected in 2020 would be the lowest production since 477.2 million st was produced in 1963.

Since the beginning of the year, the EIA's 2020 production estimate has dropped by 94.4 million st due to the coronavirus pandemic, which has resulted in a decrease in US power generation and coal production cutbacks by miners.

Power sector coal consumption is projected to be 391.3 million st in 2020 and 475 million st in 2021, compared with 539.4 million st in 2019.

Total consumption, including by petcoke plants and retail, is estimated at 435.4 million st in 2020 and 520.4 million st in 2021, down from 587.3 million st in 2019.

The EIA said production is expected to rise in 2021 due to "higher demand and rising natural gas prices."

Coal is expected to make up 18.1% of the US power generation stack in 2020 and 21.8% in 2021, down from 24.3% in 2019. Coal's estimated share in 2020 would be less than half that of a decade earlier, when coal made up 44.8% of the stack in 2010.

Renewables are projected to make up 20.1% of the stack in 2020 and 22% in 2021, up from 17.4% in 2019. It would be the first time ever that renewables had a higher generation share than coal should the numbers come to fruition.

Power generation from natural gas is estimated at 40.1% of the generation stack in 2020 and 35% in 2021, compared with 37.3% in 2019.

The estimated increase in 2020 is largely the result of cheaper gas prices, despite a drop in dry gas production, which is forecast to average 88.7 Bcf/d in 2020 and 84 Bcf/d in 2021, compared with a 92.2 Bcf/d average in 2019.

The EIA projects the spot Henry Hub gas price will average $2.11/MMBtu this year and $3.25/MMBtu in 2021, compared with $2.66/MMBtu in 2019.

Exports expected to fall to 11-year low

Coal exports are projected to fall to an 11-year low of 59.8 million st in 2020, after totaling 92.9 million st in 2019 and would be the the lowest since 59.1 million st was shipped in 2009. However, exports are expected to recover in 2021 to 63 million st.

Thermal coal export volumes are estimated to come in at 21.9 million st in 2020 and 20.6 million st in 2021, down from 37.7 million st in 2019.

The remaining 37.9 million st in 2020 is expected to be metallurgical coal, while 2021 exports of met coal are projected at 42.4 million st. In 2019, the US exported 55.1 million st of met coal.

Exports are expected to make up 11.9% of total US coal production in 2020 and 11.2% in 2021, down from 13.2% in 2019, according to EIA data.