U.S. coal stockpiles fell in September 2021 to the lowest level of total monthly coal stocks at the electric power sector since at least 2001, the Energy Information Administration (EIA) said in an Electricity Monthly Update of its November report this week.
High natural gas prices have been driving increased use of coal for power generation at utilities in recent months, while the supply response has been muted due to closures of coal mines in recent years.
So in September, total U.S. coal stockpiles saw a month-over-month decrease of 4.8 percent, reaching 80 million tons, the EIA said.
"This is now the lowest level of total monthly U.S. coal stockpiles recorded since these data were collected using the power plant operations report beginning in 2001," the administration notes.
Coal stocks with the U.S. electric power sector were down by 37.7 percent in September compared to the same month last year, while consumption rose by 14.5 percent from September 2020 to September 2021, according to EIA data.
Rising demand for coal and muted supply response have depleted U.S. coal stocks to their lowest levels since the early 1970s. As utilities scrambled to secure supply ahead of the winter, coal prices in the United States were estimated to have hit last month the highest level since 2009.
Annual U.S. coal-fired electricity generation is set to rise this year for the first time since 2014, and the share of coal in America's power generation mix is set to rise to 23 percent in 2021 from 20 percent in 2020 as electricity demand rebounds and the delivered natural gas price for electricity generators more than doubles, according to EIA estimates.
Yet, this year's rise in coal power generation in the U.S. is unlikely to continue, with generation from coal plants next year expected down by 5 percent from 2021 due to continuing retirements of coal capacity and slightly lower natural gas prices, the EIA says.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More