By Olivia Kalb

October 11, 2018 - US coal production is forecast to total just under 756 million st in 2018 due to lower domestic consumption, the Energy Information Administration reported Wednesday.

The October projection is 1.6% less than September's forecast of 768 million st, and down 2.4% from the 2017 production total, the EIA said in its Short Term Energy Outlook. In 2019, production is expected to total less than 742 million st, down 1.7% from the September forecast and down 1.7% from the expected 2018 forecast.

The EIA projects coal exports to total 108.3 million st this year, up 1.1% from September's estimate and up 11.6% from 2017 exports. Exports in 2019 are expected to fall by 7.3% to 100.4 million st.

A decline in domestic coal consumption of 4% is expected in 2018, causing the fall in production despite increased exports.

Power sector coal consumption is forecasted to total 640.1 million st in 2018 and 603.9 million st in 2019, down from 664 million st in 2017.

The EIA expects coal to generate 28% of power this year and 27% in 2019.

"The fuel mix for utility-scale generation will continue to see natural gas increase to a larger portion through 2019, according to the October forecast, while coal's share drops proportionally," EIA spokeswoman Lina Capuano said in a statement. "Other fuels, including nuclear and renewables, will vary slightly over the same period."

Gas generation is projected by the EIA to generate of 35% of electricity in both 2018 and 2019.

This is the first time since December 2018 gas generation in the following year was not forecasted higher than the current year.

Renewables, excluding hydropower, are expected to generate more than 10% of power in 2018 and less than 11% in 2019, while the EIA projects 7% of generation from hydropower 7% in both years. Out of all renewables solar power has the sharpest increase in generation.

The Henry Hub gas spot price is projected to average $2.99/MMBtu for 2018 and $3.12/MMBtu for 2019, according to the report.

Gas production is expected to average 82.7 Bcf/d in 2018, up 12.4% from the 2017 average of 73.56 Bcf/d, and in 2019 the average was forecasted to be 87.7 Bcf/d, up 6.1% from the 2018 expected average.

Gas consumption is expected to rise 10.9% this year to 80.58 Bcf/d, while in 2019 the EIA projects a 0.2% fall from 2018 levels to 80.42 Bcf/d.

The EIA projects gas inventories at the end of October to be at 3.3 Tcf, their lowest levels for that time of year since 2005; however the agency still expects fuel supplies to be able to meet winter demand.

In the EIA's Winter Fuels Outlook, released Wednesday, the average US household cost for heating fuels is projected to rise this year, largely due to higher forecasted energy prices. Heating degree days are also expected to increase 1% from last winter.