U.S. Coal Markets Hit Bottom

By Andrew Moore

This year will likely be remembered as the year the U.S. coal market hit bottom. Low demand led to low prices, which yielded production cutbacks, mine closures and some bankruptcies. As a result, U.S. coal production in 2015 is on target to slip to 908 million short tons, the lowest annual amount since 1986.

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Despite Its Cost Edge, PRB Coal Production Fell Almost 10%

By Molly Christian and Hira Fawad, SNL Energy

Production in the largest U.S. coal supply region, the Powder River Basin (PRB), fell 9.4% in the second quarter from the same time in 2014 as competitive natural gas prices, unit retirements and weather-related delays offset the benefits of the basin’s cost advantage to other U.S. coals.

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Some States Have Long Road to CPP Compliance

By Annalee Grant, SNL Energy

Some states have a long, hard road to comply with the Environmental Protection Agency’s (EPA) Clean Power Plan (CPP) regulations — specifically the 2030 carbon emissions goal — while others should be able to coast into the finish line. Under a revised set of emissions reduction goals, which include significant changes to some of the 2012 state baseline targets to address commenter concerns, coal-heavy states in the Midwest and Rocky Mountain regions appear to have the most difficult paths to compliance with EPA’s final rule, based on an SNL Energy analysis of each state’s 2030 goals and the agency’s business-as-usual projections.

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3 Basins to Serve the Surviving US Coal Fleet

By Molly Christian and Neil Powell, SNL Energy

An SNL Energy analysis shows that 75% of coal deliveries to surviving plants come from the Powder River Basin (PRB), Illinois Basin (ILB) and Northern Appalachia (NAPP) combined. The breakdown was similar for total shipments to retiring and non-retiring plants in 2014 and up from 62% from the three markets in 2007. The analysis is based on 2014, deliveries to coal units not already closed or announced for retirement or conversion. Coal receipts at those units totaled 733 million tons last year compared with overall shipments of 812.8 million tons, including those to plants slated for closure, according to U.S. Energy Information Administration (EIA) data.

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With MATS in Effect, Coal Unit Retirements Will Hit Peak in 2015

Approximately 4,600 megawatts (MW) of U.S. coal-fired generation has already retired this year through April and another 7,700 MW will close during the rest of 2015 as utilities work to comply with the U.S. Environmental Protection Agency’s (EPA) new Mercury and Air Toxics Standards, or MATS, which took effect last month.

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