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Exports May Be Silver Lining for Coal as Production Falls, Feds Say

 

 

By John Siciliano


October 2, 2018 - Coal and natural gas exports are up for the first half of the year, even as both coal production and consumption have fallen, the Energy Department said Monday.


Both coal and natural gas exports are key to President Trump's "energy dominance" agenda. For coal, exports are crucial, since shipments to other countries appear to be the only silver lining as production and consumption of coal continued to fall in the second quarter of 2018, according to the Energy Information Administration's latest quarterly reporting.


Coal exports did rise by over 13 percent from the first quarter of 2018, the agency reported. Both exports of metallurgical coal for steel and steam coal for power plants were up in the second quarter.


Trump touted coal exports while in Wheeling, W.Va., on Saturday.


"We've ended the war on beautiful, clean coal, and in just the last year, our coal exports have skyrocketed," Trump said. He said the number of coal exports rose by 66 percent.


From the first quarter of 2017 to the second quarter of 2018, coal exports have risen about 36 percent, based on EIA quarterly data. Coal exports have risen from around 22 million short tons in 2017 to around 30 million short tons, so far, in 2018.


But U.S. coal production dropped by 3.7 percent compared to the first quarter, and was 3.4 percent lower than the second quarter of 2017, according to the quarterly coal report.


Coal mine production in the West fell 5.5 percent compared to the same time last year. Coal consumption is 6 percent lower than the same time last year.


Most of the coal consumption in the second quarter came from the electricity sector. Coal stocks at power plants have also fallen since the first quarter, to 121.5 million short tons from 126.4 million short tons, marking the sixth consecutive decrease since the end of the fourth quarter in 2016, EIA reported.


The natural gas export story is far more optimistic, as the U.S. continues to be a net exporter of the fuel. The U.S. became a net natural gas exporter in 2017. Natural gas has also displaced coal as the nation's leading fuel for electricity production.


For the first half of 2018, net natural gas exports averaged 0.87 billion cubic feet per day, which is more than double the average daily net exports during all of 2017, the EIA also reported on Monday.


"The United States, which became a net natural gas exporter on an annual basis in 2017 for the first time in almost 60 years, has continued to export more natural gas than it imports for five of the first six months in 2018," the agency said.

 

Natural gas exports have remained strong due to the increase of new U.S. liquefied natural gas export terminals, the agency said. The nation's increased ability to ship LNG caused exports to surge by 58 percent compared to the first half of 2017.