May 12, 2022 - US coal production is forecast to increase this year, buoyed by a strong export market and inventory replenishment in the power generation sector, says the US Energy Information Administration (EIA).
In its ‘Short-Term Energy Outlook’, the EIA states that US coal production will increase by 20-million short tons (3%) in 2022 to 598-million short tons and by seven-million short tons (1%) in 2023.
Coal exports should do well over the next two years on the back of high global coal prices, while the electric power sector is expected to replenish inventories that were depleted in 2021.
However, labour shortages, rail congestion and challenges obtaining equipment are expected to limit production gains, the EIA warns.
The forecast production increase occurs despite the expectation that coal use in the power sector will decline, owing to renewable energy capacity increases in the electricity generation mix. The EIA says coal will provide 21% of total US generation in 2022 and 20% in 2023, compared with a share of 23% last year.
Coal will also not act as the primary substitute for natural gas in the power industry, despite the significantly higher natural gas fuel costs this year, the report notes.
Natural gas generation will maintain its almost 37% share of the electricity generation mix in 2022, dipping to 36% in 2023. The share of electricity generation from renewable energy sources will rise from 20% in 2021 to 22% in 2022 and to 23% in 2023, as more solar and wind generating capacity is added.