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US 2015 power-sector coal consumption to hit 1991 low: EIA

US coal consumption for the power sector will total an estimated 792.9 million st in 2015, the lowest amount since 1991, the Energy Information Administration said Tuesday.

Lower natural gas prices are the main reason behind the decline, the agency said in the June edition of its Short Term Energy Outlook. In 2014, coal consumption in the power sector totaled 851.4 million st.

Tuesday's report is another indication of how far the US coal industry has fallen since the shale boom has increased gas supplies and lowered prices.

The year-over-year drop comes despite the agency's forecast for the average US residential electricity costumer to spend 4.8% more during June, July and August, reflecting a 2.6% increase in the average electricity usage and a 2.1% increase in the average retail price of electricity.

For all sectors, coal consumption is estimated to total 856 million st in 2015, down from 917 million st in 2014. In 2016, the agency estimates US coal consumption will total 861 million st.

Due to lower power sector demand, the agency expects US coal production to total an estimated 926.7 million st in 2015, down from 996.7 million st in 2014. The decline is expected in all of the nation's coal-producing regions, the agency said.

In 2016, the agency expects US coal production to total an estimated 925.5 million st.

Lower seaborne prices, slower growth in world demand and higher coal output from other countries means US coal exports are likely to total 89 million st in 2015, down 8.5% from last year. The agency estimates 2016 coal exports will total a similar amount.

The June report said expects coal generation in the US to dip to 35.6% in 2015 from 39% in 2015, while natural gas generation climbs to 30.9% in 2015 from 27.4% in 2014.

The Henry Hub futures price for natural gas is expected to average $2.97/MMBtu in 2015, up from $3.07/MMBtu in 2014. The agency estimates the price will average $3.32/MMBtu in 2016.

Coal prices, which finished 2014 averaging $2.36/MMBtu, are estimated to average $2.30/MMBtu in 2015, and $2.31/MMBtu in 2016.

source: http://www.platts.com