The U.S. Energy Information Administration boosted its power-sector coal demand outlook through 2018, as it now expects coal and natural gas to provide a nearly equal share of the nation's electricity in 2018.
According to the government agency's latest "Short-Term Energy Outlook," released Aug. 8, U.S. generation will average 11.0 million MWh/d in 2017 before climbing 1.8% in 2018 to 11.2 million MWh/d, based on predictions of a colder start to 2018 year over year and "the expectation of a growing economy."
The EIA expects that in 2017, coal will provide 31.6% of the nation's power, up from last month's forecast of 31.3%, to natural gas' share of 30.8%, down from last month's forecast of 31.1%. In 2018, the EIA projects natural gas and coal will each provide 31.5% of the nation's power.
The agency boosted its power-sector coal demand outlook for 2017 and 2018 by 0.9% and 1.7%, respectively, versus the prior outlook, to 693 million tons and 700 million tons. The last time power-sector coal consumption topped 700 million tons was in 2015, when it reached 738 million tons.
On improved coal demand expectations, the EIA boosted its 2017 outlook by 0.1% versus the prior outlook to 786 million tons for 7.9% year-over-year growth and lifted its 2018 outlook by 1.2% to 796 million tons.
The improved coal demand outlook also drove the EIA to reduce its year-end stockpile projections. Power-sector coal stockpiles ended 2016 elevated at 169.6 million tons. The EIA lowered its 2017 and 2018 year-end stockpile projections by 1.4% and 1.6%, respectively, to 151.4 million tons and 151.9 million tons.
But the agency expects U.S. coal exports, which climbed 60% year over year during the first five months of 2017, to slow during the second half of this year and continue lower through 2018. For 2017 and 2018, the EIA lowered its export outlook by 2.1% and 6.7%, respectively. While the 2017 figure of 70.4 million tons represents 16.8% year-over-year growth, the 2018 figure of 59.0 million tons represents a 16.2% decline.