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US coal sector takes steps toward greener future

U.S. coal miners are experimenting with greener business projects as long-term demand for the carbon-intensive fuel collapses around them.

Creative coal mining companies, flush with cash from a bump in coal prices in 2021, are insulating themselves against future decreased demand by building solar projects on land they hold or setting up carbon sequestration zones. Other companies are burning coal waste or finding new uses for coal that can feed the energy transition. One company, Hallador Energy Co., appears to be trying to have it both ways, promising to build a solar facility as soon as it retires a coal power plant it recently purchased.

With companies across the economy seeking to cut their carbon emissions while renewable power and natural gas power undercut coal power on price, the long-term trend has been toward lower coal consumption. As recently as 2014, the nation’s coal companies mined about a billion tons of coal in a year, compared to an estimated 578 million tons in 2021 as the fuel was replaced by natural gas and renewable energy. Despite the uptick in demand in 2021, companies remain hesitant to invest in additional coal capacity.

“I think it’s really just the longer we go, the more even the most resistant companies have to start thinking about a pivot,” said Robert Godby, an energy economist and interim dean of the University of Wyoming College of Business. “I mean, how will they stay in business?”

U.S. coal generation accounted for 23% of the utility-scale electricity produced in the U.S. in 2021, down more than half from 52% in 1990. The U.S. Energy Information Administration forecasts coal’s share of power generation will fall by a percentage point in both 2022 and 2023. Just a few years down the road in 2028, utilities have scheduled a record-high 23.3 GW of U.S. coal-fired capacity retirements, according to a recent analysis of S&P Global Market Intelligence data.