Coal Tattoo

The U.S. Energy Information Administration’s new “Short-term Energy Outlook,” is getting some attention, in part because it had this to say about coal:

EIA expects the coal share of total electricity generation to rise from 37.6 percent in 2012 to 39.0 percent in 2013 and 39.6 percent in 2014, as natural gas prices rise relative to coal prices. Lower-than-projected natural gas prices along with the industry’s response to future environmental regulations could cause the coal share of total generation to fall below this forecast.

But it’s important to remember that the EIA has also recently projected little change in U.S. coal production in 2013. Also important is the longer-term trend, which the EIA recently updated with the early release of its Annual Energy Outlook 2013:

Coal remains the largest energy source for electricity generation throughout the projection period, but its share of total generation declines from 42 percent in 2011 to 35 percent in 2040. Market concerns about GHG emissions continue to dampen the expansion of coal-fired capacity in the AEO2013 Reference case, even under current laws and policies. Low projected fuel prices for new natural gas-fired plants also affect the relative economics of coal-fired capacity, as does the continued rise in construction costs for new coal-fired power plants. As retirements far outpace new additions, total coal-fired generating capacity falls from 318 gigawatts in 2011 to 278 gigawatts in 2040 in the AEO2013 Reference case.

And remember, as EIA has previously reported, it wasn’t so long ago that coal’s share of electricity generation could reliably be quoted as more than half.

The latest EIA figures also shouldn’t give any reason to think the coal market for Central Appalachia is really going to get any better:

Regionally, coal producers in both the Interior and Western regions see their shares of total U.S. coal production increase over the projection period, while Appalachia’s share declines. From 2011 to 2040, the Appalachian region’s share of total coal production (on a Btu basis) falls from 38 percent to 32 percent.