By Tyler Godwin

November 11, 2020 - The US is estimated to produce 520.6 million st of coal in 2020, the US Energy Information Administration said in a Nov. 10 report, lowering its estimate from a month ago by roughly 4.3 million st, or 0.8%.

The year-end output estimate would be 26.2% below the 705.3 million st produced in 2019, and the lowest production since 504.18 million st was produced in 1964. Meanwhile, 2021 production is estimated at 626.9 million st, EIA said in its November Short-Term Energy Outlook.

Since the beginning of the year, the EIA's 2020 production estimate has dropped by 76 million st because of the coronavirus pandemic, which has resulted in a decrease in US power generation and coal production cutbacks by miners.

"COVID-19 and efforts to mitigate it, along with reduced demand from the US electric power sector amid low natural gas prices have contributed to mine idling and mine closures," the EIA said.

Power-sector coal consumption is projected to be 442.5 million st in 2020 and 545.9 million st in 2021, compared with 538.6 million st in 2019. Average stockpiles in the electric sector are expected to rise to 138.4 million st in 2020, up from 111.3 million st in 2019. However, with the higher consumption in 2021, inventories are expected to fall to 124.4 million st in 2021.

Total consumption, including by petcoke plants and retail, is estimated at 484.1 million st in 2020 and 588.9 million st in 2021, down from 586.5 million st in 2019.

The EIA said the increase in 2021 "reflects rising demand for coal from US electricity generators because of higher natural gas prices compared with 2020."

Coal is expected to make up 20.2% of US power generation in 2020 and 24.8% in 2021, compared with 24.3% generated from coal in 2019. It was the first monthly forecast with coal's generation share higher in 2021 than the 2019 average.

But coal's estimated share in 2020 would be cut by more than half from a decade earlier when coal made up 44.8% of the power in 2010.

Renewables are projected to make up 19.8% of the stack in 2020 and 21.7% in 2021, up from 17.5% in 2019.

Power generation from natural gas is estimated at 38.9% in 2020 and 32.9% in 2021, compared with 37.3% in 2019.

The estimated increase in 2020 is largely from cheaper gas prices, despite a drop in dry gas production, which is forecast to average 91 Bcf/d in 2020 and 87.9 Bcf/d in 2021, down from 93 Bcf/d averaged in 2019.

The EIA projects the spot Henry Hub gas price to average $2.22/MMBtu this year and $3.26/MMBtu in 2021, compared with an average $2.67/MMBtu in 2019.

Exports Expected to Fall to Four-Year Low

Coal exports are projected to be at a four-year low 63.6 million st in 2020, down from 92.9 million st exported in 2019 and the lowest since 60.3 million st was shipped out in 2016. However, exports are expected to recover in 2021 to 64.7 million st.

Thermal coal export volumes are estimated at 22.8 million st in 2020 and 23.2 million st in 2021, down from 37.7 million st in 2019.

The remaining 40.8 million st in 2020 are expected to be metallurgical coal exports, while 2021 exports are projected at 41.5 million st. In 2019, the US exported 55.1 million st of met coal.

Exports are expected to make up 12.2% of the total US coal production in 2020 and 10.3% in 2021, down from 13.2% in 2019, according to EIA data.