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U.S. coal production lowest since the 1980s

Power sector drawing more on natural gas as a source for electricity.

By
Daniel J. Graeber
Coal fading from the U.S. energy landscape as power sectors starts drawing more on natural gas to meet consumer and industry demand. Photo by Debbie Hill/ UPI
Coal fading from the U.S. energy landscape as power sectors starts drawing more on natural gas to meet consumer and industry demand. Photo by Debbie Hill/ UPI | License Photo

WASHINGTON, June 13 (UPI) -- The amount of coal produced in the United States is the lowest it's been since the early 1980s as overall demand falters, the government said.

"Coal production has declined because of increasingly challenging market conditions for coal producers," a report from the U.S. Energy Information Administration said.

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Industrial and utility sectors are drawing more heavily on natural gas, while exports in the form of liquefied natural gas are drawing on domestic supplies. The EIA's analysis finds that, through 2040, total U.S. production from shale gas and tight oil more than doubles to 29 trillion cubic feet, accounting for about 69 percent of total output of natural gas in the country.

Generating electricity accounts for nearly all of the coal use in the United States. Power plants during the fourth quarter received more coal than they consumed, leaving a net surplus of coal on the market.

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Total production of coal, meanwhile, during the first three months of the year was the lowest it's been for that period since coal workers went on strike during the second quarter of 1981

Natural gas is becoming the primary source of electricity in the United States. Prior to April 2015, the total monthly share of electricity generated by coal had always been greater than gas.

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Peabody Energy Corp., the largest privately-owned coal producer in the world, filed for bankruptcy in April. The company said the pressure on the industry has been "unprecedented" in recent years. The filing for Chapter 11 bankruptcy protection by Peabody follows trends set by its industry peers. Arch Coal and Alpha Natural Resources, among the largest coal companies in the country, filed for bankruptcy in January and August, respectively.

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The U.S. Interior Department in January announced the start of a review of the federal coal program to identify potential reforms. While the review proceeds, the Interior Department is pausing new coal leasing on public lands, with continued mining under existing leases. The review process is expected to take three years.

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