The last few days has seen a flurry of boosterish news accounts about the coal industry, suggesting that demand overseas can make up for the steep decline at home. It all has something of an “I’m not dead yet” ring to it.
To understand why the US coal industry is so worried—and why the industry is so desperate to find new export markets—take a look at year-over-year trends in coal consumption through the third quarter of 2012.
Find this article interesting? Support more research like this with a year-end gift during our Fall Fund Drive!
According to the latest official numbers, total consumption in 2012 may have fallen by a staggering 14 percent in a single year. Even that makes things sound overly rosy for the coal industry because 2011 consumption was already down something like 11 percent from typical years in the mid-2000s. We’ll have to wait for final Q4 numbers to confirm, but it looks as though US consumers in 2012 used roughly 100 million tons less coal than the year before.
Keep in mind that 2012’s travails for coal came in spite of a tremendous heatwave that spread across much of the coal-burning regions of North America. Somewhat perversely, high temperatures are good for the coal industry because it induces Americans to crank up their air conditioners. Yet record temperatures were not enough to stave off a record decline in coal use.
If you need a single explanation for why coal interests are so aggressively pursuing export plans, this is about as close as you can get: the American coal market—home to the world’s biggest coal reserves—is evaporating right before our eyes.