2014 will be producers’ worst year yet — study

Source: Ryan Holeywell, Fuel Fix • Posted: Friday, March 21, 2014

Reports of coal’s imminent demise are exaggerated, but this year will still be bleak for the industry, according to a new study from ICF International consultants.There has been much speculation about the possible downfall of coal at a time when the United States is inundated with inexpensive natural gas and prospective pollution regulations are hindering coal.

But the ICF forecasts 2014 will indeed be coal producers’ worst year and that future demand for the black rock will rise and then plateau.

U.S. EPA is planning to complete federal carbon dioxide emissions guidelines for existing coal power plants in 2015. The consulting firm, however, believes the new emissions regulations will be flexible, limiting the number of coal plants that go offline.

Yet the ICF also said U.S. coal will be a competitive fuel within international markets for outside power generation.

In 2012, U.S. coal exports reached a record-high 126 million tons due in part to the switch from coal to cheap natural gas as a source of power for the home.

Many of the future export facilities are counting on Asia to be a major coal customer, as energy prices are higher there.

The ICF said coal will manage to survive the boost in gas demand due to an upcoming increase in liquefied natural gas exports, which could increase the cost of natural gas.

“In ICF’s view, gas prices are likely to play an important role in preventing the construction of new coal power plants as well as contributing to the retirement of older smaller units,” the company wrote. “Natural gas prices, however, are not likely to eliminate coal demand at existing U.S. coal power plants over the next 10 years” (Ryan Holeywell, Fuel Fix, March 18).