Coal

Coal Changing with the Times

The world is moving away from coal and leaning into the use of natural gas. China is cutting back on coal exports, while across the pond, America is rapidly shutting down coal plants. The U.S. and China are the third and first largest coal consumers in the world. These countries are looking to natural gas because it is cleaner, cheaper, and more available when compared to coal. This is happening on a global scale. Though there are utility companies looking to renewables to take over for coal processing, energy demand seems to be turning to natural gas. 

The United States 

Is the future of coal the transition to natural gas? In the U.S., it may be.

According to the Energy Information Agency, coal production in the United States has been on a downswing since 2006 — though intertwined with some good years from 2012 to 2014. The year 2015 saw the steepest decline of coal generation (about 10 percent of total energy production) in the resource’s history. Coal production is expected to continue on that downward trend. Also in 2015, natural gas reached its highest share of U.S. production. This trend, the EIA estimates, will continue to increase. 

One major appeal of natural gas is that it is domestically available and less expensive to maintain. The cost of natural gas has remained competitive with coal-fired electricity. Recently, though, the cost of natural gas decreased by 2 percent, whereas coal costs spiked 5 percent. 

It’s been the primary energy source in the U.S. for the past several years, and it seems it is going to stay that way. EIA estimates found that the 2019 natural gas average is expected to be more than one-third of electricity generation in the country for the second year in a row. Currently, natural gas accounts for nearly one-half of total energy consumed by residential and commercial utilities as well as 41 percent of U.S. industry usage. From 2010 to 2018, the United States saw the shutdown of more than 200 coal-fired power plants — with more announcing closures by 2025. At least 150 new natural gas plants are planned for the future, which is expected to add thousands of miles of pipelines throughout North America. 

Trends in China

Realities in China are a little different. The country is stuck between anticipated growth in energy demand and its efforts to transition between energy resources. Known as the largest coal producer and consumer, China looks to be pulling back on traditional practices for electricity generation.  

Coal Demand in Select Countries/Regions in 2000, 2017, and 2023

Since becoming focused on cleaning up its act regarding energy production in 2006, the country is looking to oil and gas as half-way points before “directly entering the age of clean energy” (Silverstein, 2019). However, even though usage is expected to fall substantially in the next couple of decades, the country will still use the most coal out of any other country when that time comes.

As of 2017, China’s demand for coal blew other top coal users out of the water. The International Energy Agency reported Chinese demand reached 2,7252 million trillion tons of coal equivalent that year. India and the United States trailed behind by the thousands of units at 563 million trillion tons and 472 million trillion tons, respectively.  

China’s energy department reported decreasing coal capacity by 8,600 megawatts, or 1 percent, from its total electricity. Currently, coal accounts for 59 percent of the total electricity generated and consumed in the country. At least two energy companies in China have assessed that, by at least 2025, natural gas demand will grow by 30 percent (or 300 billion cubic meters) within the next 15 years. These companies, such as PetroChina, are signing onto securing the future of natural gas production in the coming years. 

Sources

Ken Silverstein (2019). “As American Coal Fades, Will LNG Exports Pick Up Market Share?” Forbes.

Brad Plumer (2019). “As Coal Fades in the U.S., Natural Gas Becomes the Climate Battleground.” The New York Times. 

Energy Information Agency (2019). “EIA forecasts natural gas to remain primary energy source for electricity generation.”

Qi Ye and Jiaqi Lu (2016). “The end of coal-fired growth in China” The Brookings Institute 

International Energy Agency (2018). “Coal 2018: Analysis and forecasts to 2023”

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