U.S. coal production is up sharply after hitting a 50-year low last year

Oct 22, 2021
Originally published on October 22, 2021 10:18 am

More than 40% of America's coal comes from the Powder River Basin, a 120-mile swath along the Montana-Wyoming border.

But times have been tough for producers there. Like other U.S. coal-producing areas, the Powder River Basin has seen mine closures and job losses mount in recent years. Production hit a 50-year low in 2020, and 151 coal mines were idled or closed.

"It's been year after year where we've seen decline, decline, decline," says Joe Micheletti, an executive with Westmoreland Mining, which operates three mines in Montana.

"Our hope is maybe we've hit the bottom," he says, "and what we see coming is maybe ... that the coal demand is going to be maybe steady."

Consulting company IHS Markit says natural gas prices and energy demand dropped early in the COVID-19 pandemic. Unburned coal piled up into a surplus in 2020.

Now, surging global demand has chipped away at the supply. James Stevenson with IHS-Markit says coal demand is especially high in the Asia-Pacific region.

"There isn't enough coal in China," says Stevenson. "Japan's had more coal demand. So there's a scramble to buy coal from where you can."

Including from producers in the U.S.

The future of coal probably won't be a repeat of 2021

As the Biden administration prepares to negotiate reductions in fossil fuel use at the Glasgow climate summit at the end of the month, U.S. coal production is actually up significantly this year.

Natural gas prices rose significantly this summer, and now American coal producers are on track for the first year-over-year rebound in production since 2014.

The U.S. Energy Information Administration expects 22% growth in electricity generation from coal this year compared to 2020, partially due to coal's stable prices and the high cost of natural gas.

But experts say it's not a sign of what's to come, as much as a reflection of the exceptional period we're currently in.

The EIA says the increase in coal generation is unlikely to continue in the long term due to continued power plant retirements and competition from other generation alternatives like natural gas.

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President Biden is heading to Glasgow soon to meet with other world leaders about rapidly lowering greenhouse gas emissions. Right now, though, his climate agenda is being scaled back in Congress. And this year, coal production in the U.S. is actually going up. Yellowstone Public Radio's Kayla Desroches reports.

KAYLA DESROCHES, BYLINE: Times have been tough in the Powder River Basin of Wyoming and Montana, where more than 40% of America's coal comes from.

JOE MICHELETTI: It's been just year after year after year where we've seen decline, decline, decline.

DESROCHES: Joe Micheletti is an executive with Westmoreland Mining, which operates three mines in Montana. The Powder River Basin, like other coal-producing areas, has seen mine closures and job losses mount over the last few years. A hundred and fifty-one coal mines were idled or closed last year.

MICHELETTI: Our hope is maybe we've hit the bottom, and what we see coming is we think - maybe a little bit more of what we're seeing right now - that the coal demand is going to be maybe steady.

DESROCHES: Consulting company IHS Markit says natural gas prices and energy demand dropped early in the COVID-19 pandemic. That led to a surplus of coal in 2020. Now surging global demand has chipped away at the supply. James Stevenson with IHS Markit says coal demand is especially high in the Asia Pacific region.

JAMES STEVENSON: There isn't enough coal in China. Japan's been - had a very strong coal demand. So there's a scramble to buy coal from where you can.

DESROCHES: Natural gas prices rose significantly this summer, and now there's higher domestic demand for coal, too. This year, American coal producers are on track for the biggest year-over-year rebound in production since 2014. The U.S. Energy Information Administration expects a 22% growth in electricity generation from coal this year compared to 2020, partially due to coal's stable prices and the high cost of natural gas. The EIA says the increase in coal generation is unlikely to continue in the long term due to continued power plant retirements and competition from other generation alternatives like natural gas.

For NPR News, I'm Kayla Desroches in Billings, Mont.

(SOUNDBITE OF THE FOREIGN EXCHANGE'S "RAW LIFE") Transcript provided by NPR, Copyright NPR.

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