Houston (Platts)–10 Jan 2017 541 pm EST/2241 GMT
The US will burn and produce more coal this year than in 2016, the Energy Information Administration said Tuesday.
In its first Short-Term Energy Outlook of the year, the EIA estimates electric power sector coal consumption will increase by 6%, or 41 million st, year over year to 720 million st on higher natural gas prices and increased electricity generation.
The agency said the Henry Hub natural gas spot price should average $3.55/MMBtu in 2017, up more than $1 from $2.51/MMBtu in 2016. Consumption is estimated to have fallen 8%, or 60 million st, in 2016 to 678.7 million st.
RECORD PRODUCTION DROP
US coal production for 2016 fell 18%, or 158 million st, year on year to 739 million st, the EIA estimates, marking the lowest level of production since 1978. Such a drop in output would be the largest annual decline ever in both tons and percentage based on data going back to 1949.
COAL TO GAIN ON GAS
Increased utility burn this year will lead to coal accounting for a greater share of generation, the EIA said, with coal and gas each making up about 32% of the fuel mix. In 2018, the EIA said gas will pull slightly ahead with a 33% share of generation compared to coal at 32%.