Coal surges in 2H16, but not enough
New data from the Energy Information Administration (EIA) has revealed that coal production was up in the third and fourth quarters of 2016, led by significant jumps in the Powder River Basin area of Montana and Wyoming, though it was not enough to edge out 2015 levels.
Agency officials, citing jumps in coal-fired generation for the change, said in the report released this week that the figures reversed a trend it had seen between mid-2014 and the middle of last year, when drops were recorded in six out of seven quarters.
Powder River Basin, or PRB, coal production realized its biggest jump between 1H and 2H while other regions such as the rich Illinois Basin and Appalachia remained largely flat. In fact, nearly all of the beneficiaries of PRB coal during the latter half of 2016 – a total of 29 U.S. states – reported consuming more tonnage.
The main recipients of the region’s product, including Illinois, Missouri, Texas and Wisconsin, made up about half of the jump in demand.
The EIA said that the increased generation stemmed, naturally, from warmer-than-normal temperatures during the third quarter of the year, and that the temperatures were the highest in history for that period. As we entered the final quarter of the year, even with declining generation, higher natural gas prices led to a reduction in its share of consumption while coal simultaneously rose.
By December, coal’s share of the total electricity picture exceeded natural gas; it was the first time that had occurred since January 2016.
The report comes just two weeks after the EIA confirmed its projections that natural gas will surpass coal in the generation mix for all of 2016 for the first time in history. In its Short-Term Energy Outlook, the agency forecasted that natural gas will make up 33% of the total annual share compared to coal’s 32%. Nuclear’s position should be 19% while non-hydro renewables will rise to 8%. Hydro and other types will likely make up 6% and 1%, respectively.
* Chart courtesy Energy Information Administration (EIA)
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