The U.S. Energy Information Administration expects coal exports will slide this year and next after providing welcome relief for U.S. producers in 2018, while projecting that domestic production will also decline.
The agency expects U.S. coal exports, which increased 19% to 116 million tons in 2018, to decline in both the thermal and metallurgical coal markets in 2019 and 2020. Metallurgical coal exports are forecast to drop by 15.6% to 51.9 million tons in 2019 and then decrease to 49.2 million tons in 2020 due to slowing economic growth and decreasing demand for steel.
Thermal coal exports are projected to decline by 9.8% in 2019 to 48.8 million tons and then drop to 44.1 million in 2020 as traditional markets, such as the European Union, move toward limiting or eliminating coal-fired generation. The administration also projects that thermal exports will overtake metallurgical exports in the first quarter 2019, with the U.S. shipping 14.7 million tons of thermal coal and 14.3 million tons of metallurgical coal to other nations.
Coal production, which totaled 753.7 million tons in 2018, is expected to drop to 694.9 million tons this year and 663.7 million in 2020. Appalachia is slated to see the largest percentage decline this year, with output decreasing 11.9% from 201.2 million tons in 2018 to 177.3 million in 2019. Coal production in the interior is expected to decrease 6.9% to 127.7 million tons while western output decreases 6.1% to 390 million tons in 2019.
The administration forecasts that consumption will drop from 688 million tons in 2018 to 613 million in 2019 and 585 million in 2020. Prices per million British thermal units for coal-powered generation are expected to increase from $2.06 last year to $2.11 in 2019 and $2.12 in 2020.
Carbon emissions from coal are projected to decrease by 10.3% year over year in 2019 to 1.13 billion metric tons and by another 4.7% to 1.08 billion tons in 2020.
Additionally, the agency projects that coal will account for an even smaller percentage of the nation's power portfolio in 2019 than it suggested just a month ago, with natural gas's share continuing to grow.
The federal agency forecasts that coal will average about 25% of power generation this year, rather than 26%, while natural gas will account for 37%, rather than 36%, according to its latest short-term energy outlook released March 12. Coal accounted for 27% of generation in 2018 and is expected to continue decreasing to 23% by 2020. Natural gas made up 35% of the nation's electricity last year and is expected to remain at 37% in 2020.