According to the US Energy Information Administration in its monthly Short-term Energy Outlook published, coal production will fall 1.7% in 2011 despite a significant increase in coal exports.
The estimate marks an accelerated decline from the 1.2% decrease EIA projected in July.
US coal production this year has been hampered by widespread flooding that hit western coal, whose output declined 2% in the first six months of 2011 compared with the same period the year before. Coal production from the Western region declined 2% in the first six months of 2011 compared with the same period the year before, while production in the Appalachian region increased.
The agency also removed tonnage from its 2012 forecast, saying US production will increase 0.3% next year rather than the 1.8% it forecast in its July outlook.
EIA also increased its estimate for a drop in the electric power sector's coal consumption to nearly 3% in 2011 from its previous projection of a 2.5% decrease, as total electricity generation rises by less than 1% and generation from natural gas increases by 3.5%.
In July, the EIA reported the share of US electricity generated by coal during the first quarter of 2011 was at the lowest level in more than 30 years as power plants switched to natural gas. Coal provided 46% of total generation in the first quarter, down from 49% in 2010 and 52% in 2008 during the same three month period. Total electricity generation increased less than 1% in the first quarter.
EIA also said in its short-term outlook update that it expects coal consumption at coke plants will increase 17% to 25 million short tons in 2011 and stay near that level in 2012.
US coal exports are expected to reach 98 million short tons in 2011, above the EIA's previous forecast of 96 million short tons. Exports are expected to fall to 83 million short tons in 2012 as supply from other exporting countries recovers. The forecasted level of imports remains unchanged at 19 million short tons for both 2011 and 2012.
(Sourced from Argus Media Ltd)
