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U.S. Coal Output Capacity Has Plunged 28% Since 2009 Peak

Declining coal demand across several sectors, especially electricity generation, has led to a 28-percent slump in U.S. coal mining productive capacity since the peak in 2009, the Energy Information Administration (EIA) said on Wednesday.  

At its peak in 2009, the coal capacity across the United States, that is, the maximum amount of coal that mines can produce in a year, was 1,407 million short tons (MMst). This capacity had fallen to 1,009 MMst in 2019. During the same ten-year period, America’s coal production plunged by 35 percent as many mines were closed while those in operation produced lower volumes of coal, the EIA said.

Mine capacity utilization has also declined over the past decade, as demand for coal in the electric power sector and the industrial and commercial sectors has dropped. Coal mine capacity utilization stood at 70 percent last year, down from an average of 72 percent between 2015 and 2019, and from average capacity utilization of 82 percent from 2000 to 2014, according to EIA data.

Nearly all of the coal produced in the United States goes for electricity generation, but its share has been eroded in recent years by growing natural gas-powered generation and rising share of renewable energy generation.

Coal is one of the main sources of energy in the United States, accounting for 14 percent of domestic primary energy production in 2019, according to EIA estimates.

EIA data shows that U.S. coal production and consumption have been on a decline since peaking in 2008 and 2007, respectively. Last year, for example, U.S. coal production hit its lowest level since 1978, while coal consumption dropped to the lowest since 1975.

The rise of renewables and declining coal electricity generation resulted in energy consumption from renewables in the United States, surpassing in 2019 coal consumption for the first time since 1885.

Due to rising natural gas production and increased natural gas-powered generation, coal-fired electricity generation capacity continues to retire in the U.S. Following coal capacity retirements, electricity generation from coal has dropped significantly over the past decade to the point of reaching its lowest level in 42 years in 2019.  

By Tsvetana Paraskova for Oilprice.com

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