MARKETS

Coal faces domestic headwinds in the US: Wendt

OVER the past decade, the US shale oil and gas boom has flooded the domestic market with cost com...

Lou Caruana
Coal faces domestic headwinds in the US: Wendt

The US Energy Information Administration has projected that 2016 U.S. coal production will equal about 752.5 million tons - representing a 25% decline from 2014.

During 2015, U.S. utilities burned almost exactly the same amount of coal as natural gas, with each commodity representing 33% of U.S. electricity generation, according to the EIA.

The EIA projects that coal will still deliver 20% of U.S. electricity by 2040. But as recently as 2008, the US burned more than double as much coal as it did natural gas, illustrating coal's swift decline, according to Wendt.

“The commodity is also facing intense pressure from regulators and the Obama administration, which has erected regulatory obstacles that block coal-fired power plants because of their contribution to climate change,” he said.

“Coal is without doubt becoming less acceptable within the construct of modern Western world economies and this will inevitably impact upon demand – but at the same time thermal coal demand will likely continue to increase over the near-to-medium term, as a result of population growth and corresponding energy demand escalation in emerging economies.

“The key issue however is that life is set to become increasingly more difficult for the companies that actually mine and produce thermal coal, irrespective of the overall demand outlook. This means that investors, for a range of reasons, are most likely going to be less inclined to invest in thermal coal producers.”

TOPICS:

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

ESG Mining Company Index: Benchmarking the Future of Sustainable Mining

The ESG Mining Company Index report provides an in-depth evaluation of ESG performance of 61 of the world's largest mining companies. Using a robust framework, it assesses each company across 9 meticulously weighted indicators within 6 essential pillars.

editions

Mining Magazine Intelligence Exploration Report 2024 (feat. Opaxe data)

A comprehensive review of exploration trends and technologies, highlighting the best intercepts and discoveries and the latest initial resource estimates.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production