With coal production down over 40% from a year ago, it’s appropriate to assess the industry’s health and viability. It is important to understand supply and demand, and the fundamental forces shaping the coal industry’s future.

Coal storage levels are rising, prices and production levels are falling, investors are fleeing the sector, and policy appears increasingly likely to favor natural gas and renewables over coal. These trends indicate a sector in deep distress. The U.S. coal industry might be defunct by 2030, or even as early as 2025, presenting opportunities for natural gas and renewables. 

Demand is falling

Coal generation at U.S. utility scale facilities fell 48% from 2010 to 2019, as coal’s share of total generation in the power mix fell from 45% to 23% over the same period. Early indications from 2020 suggest coal demand remains in free fall. Year-to-date (YTD) Coal generation is down 33% from the same prior-year period, according to the latest EIA data. Note that domestic demand took a hit before COVID-19 started to weigh on the economy in March.