HIGHLIGHTS

Highest 2021 production forecast this year

Coal makes up 23.6% of the 2021 power share; 21.8% in 2022

The US is estimated to produce 617.3 million st of coal in 2021, the US Energy Information Administration said in a July 7 report, raising its monthly estimate by roughly 17 million st, or 2.9%, from June to its highest projection for the year.

The 2021 production would also be 14.5% higher than the 55-year low 539.1 million st produced in 2020, while the 2022 production estimate rose 0.9% on the month to 610.4 million st, EIA said in its July Short-Term Energy Outlook.

Power-sector coal consumption is projected to be 522.2 million st in 2021 and 487 million st in 2022, up from 436.5 million st in 2020. Average stockpiles in the electric sector are expected to fall to 107.7 million st at the end of 2021, from 132.7 million st in 2020. Inventories are expected to fall again to 84.5 million st at the end of 2022.

The EIA said “the increase in production reflects greater electric power sector demand for coal. Higher natural gas prices make coal more economically competitive relative to natural gas for electricity generation dispatch.”

Total consumption, including by petcoke plants and retail, is estimated at 569 million st in 2021 and 536.8 million st in 2022, up from 477.3 million st in 2020.

Coal is expected to have the second-largest generation share in 2021 by making up 23.6% of US power generation and 21.8% in 2022, compared with 19.9% generated from coal in 2020.

Renewables are projected to make up 20.6% of the stack in 2021 and 22.5% in 2022, up from 19.7% in 2020.

Power generation from natural gas is estimated at 35.6% in 2021 and 36% in 2022, compared with 39.2% in 2020.

The estimated decrease in natural gas generation is largely from a rise in spot Henry Hub gas prices, which is forecast to average $3.34/MMBtu this year and $3.12/MMBtu in 2022, up from $2.11/MMBtu in 2020.

But due to the increase in prices, dry gas production is also expected to rise to an average of 92.51 Bcf/d in 2021 and 94.68 Bcf/d in 2022, compared with 91.37 Bcf/d averaged in 2020.

Exports expected to rise from a four-year low

Coal exports are projected to climb to 83.8 million st in 2021, up from the four-year low of 69.1 million st in 2020. Exports are expected to increase again in 2022 to 99.1 million st.

Thermal coal export volumes are estimated at 36.9 million st in 2021 and 41.7 million st in 2022, up from 27 million st in 2020. The EIA said it assumes the “seaborne steam coal market in 2021 will be more robust with higher demand for US coal.”

The remaining 46.9 million st in 2021 are expected to be metallurgical coal exports, while 2022 exports are projected at 57.4 million st. In 2020, the US exported roughly 42.1 million st of met coal.

Exports are expected to make up 13.6% of the total US coal production in 2021 and 16.2% in 2022, up from 12.8% in 2020, according to EIA data.

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