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Coal Demand Falls in the U.S., Rises Everywhere Else

Cheap natural gas means U.S. electricity producers are buying less coal. But the rest of the world is buying more.
February 25, 2013

A glut of cheap natural gas in the United States has recently led utilities to replace some coal-fired electricity generation with that from cleaner-burning gas. But while the domestic coal industry is down, the international market for U.S. coal—especially in Europe and Asia—is booming.

According to the International Energy Agency, demand for coal continues to grow everywhere in the world except the United States. Globally, demand grew 4.3 percent in 2011, the most recent year for which there are data.

Data from the Energy Information Administration, illustrated in the first chart, show that U.S. coal exports are on the rise. In fact, the U.S.—the world’s second largest producer of coal behind China—exported more in 2011 than in any year except 1981, when the country exported around 112 million tons. Data for the full year of 2012 are not yet available, but through the first three quarters, the U.S. was comfortably on pace to set a new record after having sold nearly 98 million tons on the international market. Much of the recent growth is due to increasing shipments of steam coal, the type burned in power plants.

As shown in the second chart, coal producers in the U.S. have had particular recent success selling to Asian and European customers. In both regions, natural gas is much more expensive than it is in the United States. The Netherlands, for example, imported a record 10.8 million tons of American coal in 2011, up from 7.3 million in 2010, and the most since the early 1990s. Germany, Italy, and the United Kingdom saw similarly large increases.

Between 2009 and 2011, China saw its imports of U.S. coal increase fivefold. India imported 4.5 million tons of U.S. coal in 2011, doubling the amount it bought in 2010. Also purchasing a lot more U.S. coal recently is South Korea, which bought 10.4 million tons in 2011, compared to 2.1 million tons just two years prior.

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