Coal consumption in Arkansas and the rest of the U.S. has declined precipitously as natural gas becomes the nation’s major electricity source and utility operators continue to shutter aging coal-fired power plants.
According to newly released data from the U.S. Energy information Administration (EIA), coal consumption in Arkansas declined by 33.3% from 19.5 thousand short tons in 2014 to a mere 13 thousand short tons in 2015. Nearly all of that consumption in 2015, or about 12.8 thousand short tons, was used for electric power generation.
At the same time, marketed natural gas production in Arkansas was nearly five times greater in 2015 than in 2005. Coal-fired electric power plants in Arkansas supplied 39% of the state’s net electricity generation in 2015, down from 54% in 2014.
Nationwide, the U.S. electric power sector consumed 677 million short tons of coal in 2016, the lowest amount since 1984. Electric power sector coal consumption accounted for more than 93% of all coal consumed in the United States, and more than two-thirds of this coal was shipped either completely or in part by rail. Most of the remainder was shipped by barge, truck, or — for power plants located near a coal mine — by conveyor.
Electric power sector coal consumption in 2016 was 35% lower than in 2008, when U.S. coal production reached its highest level, but the share of coal shipped to the electric power sector by rail has consistently remained near 70%.
After rail, the next two most common modes of transporting coal are barge and truck. Both modes have accounted for about 10% of yearly coal shipments since 2008, but truck shipments have decreased slightly, reaching 9% in 2016, while barge shipments have increased slightly, reaching 13% in 2016.
The electricity industry is planning to increase natural gas-fired generating capacity by 11.2 gigawatts (GW) in 2017 and 25.4 GW in 2018, based on information reported to EIA. If these plants come online as planned, annual net additions in natural gas capacity would be at their highest levels since 2005. On a combined basis, the 2017–18 additions would increase natural gas capacity by 8% from the capacity existing at the end of 2016.
The upcoming expansion of natural gas-fired electricity generating capacity follows five years of net reductions of total coal-fired electricity generating capacity. Available coal-fired capacity fell by an estimated 47.2 GW between the end of 2011 and the end of 2016, equivalent to a 15% reduction in the coal fleet over the five-year period.
The electricity industry has retired some coal-fired generators and converting others to run on natural gas in response to the implementation of environmental regulations and to the sustained low cost of natural gas. The cost of natural gas delivered to power generators fell from an average price of $5 per million Btu (MMBtu) in 2014 to $3.23/MMBtu in 2015 and averaged $2.78/MMBtu from January through October 2016, the latest available data.
Expanded production from shale formations is one of the main reasons natural gas prices have remained low in recent years. Many natural gas-fired power plants under construction are located in Mid-Atlantic states and Texas, where the nation’s major natural gas shale plays are located. Expanding natural gas pipeline networks also help support the growth in natural gas-fired electric generating capacity.
The EIA report on coal consumption across the U.S. was released June 2, the same day that President Donald Trump announced his decision to withdraw from the nearly 200-nation Paris Climate Accord to address global warming. Despite the coal industry’s support of the Trump administration’s decision to back out of the historic climate treaty, several U.S. companies that produce nearly half of the nation’s coal supply have filed bankruptcy within the past 12 months.
An Arkansas group calling themselves “Arkansas Citizens’ Climate Lobby will travel to Washington, D.C., next week to lobby a nationwide, market-based solution on climate change. Last week, most of Arkansas’ congressional delegation approved of the president’s move to renege on the previous administration’s agreement to reduce emissions to 26% to 28% of 2005 levels by 2025.