US Coal Stockpiles Near Historic Lows

 Source:

https://www.theepochtimes.com/us-coal-stockpiles-near-historic-

"The U.S. Energy Information Administration’s (EIA’s) latest short-term energy outlook (pdf) reveals that coal inventories in the electric power sector reached 93.7 million short tons as of December 2021

—an increase since September when stockpiles hit a historic low not seen since the Carter administration.

Isaac Orr, a policy fellow at the Center of the American Experiment, told The Epoch Times he thinks the increase stemmed from warmer-than-expected winter temperatures, greater wind generation, and electric companies’ decisions to hold onto coal as a safeguard against potentially extreme winter weather.

“Companies are saying, ‘Look, we know we’re going to need this coal when the cold snap hits. So, let’s preserve it to kind of keep our powder dry,’” Orr said.

In September 2021, coal stockpiles at U.S. power plants fell to just over 80 million tons.

This marked the smallest quantity in more than four decades, when in March 1978 power sector coal stocks hit 77 million tons.

EIA statistics provided exclusively to The Epoch Times indicated that December’s electric power sector coal stocks were still among the lowest since the 1970s, with the exceptions of multiple months earlier in 2021.

In early 1978, the United States’ population was 217 million according to the Census Bureau (pdf), less than two-thirds of the Census-estimated population of 332 million in January 2022.

Power sources on the U.S. grid have also shifted during that time.

With innovations in the extraction of natural gas from shale formations, natural gas has risen to 43 percent of domestic generating capacity in 2020 from 17 percent in 1990, per the EIA.

Coal, meanwhile, fell from 53 percent of generating capacity to 20 percent of generating capacity during that same period.

While coal stockpiles have shrunk, Orr pointed out that days of burn, a statistic based on both inventories and historical consumption levels, have remained relatively steady in recent years.

“That’s showing how many days you can provide electricity with the coal power plants that are in operation now,” he said.

In a 2019 report, the Brookings Institution argued that coal is probably in irreversible decline.

The think tank cited the emergence of solar and wind, driven in part by state-level renewable mandates that were less responsive to federal policy under then-President Trump.

It also noted the rise of natural gas, which has played a major role in decreasing U.S. carbon emissions.

Brookings also cited the possibility of new policies aimed at curbing greenhouse gas emissions as an impediment to investments in coal-fired generators.

“The bottom line is that U.S. coal production is unlikely to again rise from the ashes,” Brookings concluded.

The Heritage Foundation, another think tank, has argued that coal power is saddled with “excessive, ineffective regulations” along with competition from taxpayer-subsidized energy sources,

advising Congress to eliminate tax credits for solar and wind, among other recommendations aimed at curbing direct subsidies or government mandates that favor particular energy sources.

Orr said environmental groups and state agencies are pressuring utility companies to curb their use of coal plants.

He added that environmental, social, and corporate governance (ESG) standards have also begun to limit accessible capital for coal-related projects.

“There was a political decision to move away from coal that physics isn’t really able to deliver on,” he said.

While U.S. Climate Envoy John Kerry predicted in November that the United States will not have coal by 2030, Orr has his doubts.

“Energy transitions are not things that you can just go to a conference and declare.

They’re long transitions that take decades, if not centuries to accomplish,” he said.

Orr also drew attention to the role of state mandates and federal subsidies in facilitating the growth of renewables and the concurrent fall of coal.

Yet some groups have argued that significant indirect subsidies maintain the profitability of coal, oil, and natural gas.

The International Monetary Fund (IMF), for example, has argued that 99 percent of coal is priced below what it should be when damages from global warming, pollution, and related factors are taken into account.

The EIA has anticipated that domestic coal reserves will increase.

“U.S. coal inventories remain at near-historic lows, so we expect production to remain high to replenish those inventories,” EIA Acting Administrator Steve Nalley said in a press release.

Orr thinks this is plausible based on behavior he’s seen among utilities in Minnesota: “It’s hard to be right in terms of the amount of increase, but directionally, that sounds right.”

Internationally, prices for the commodity are on the rise.

Coal futures at Newcastle in Australia, the Asian market’s benchmark, have risen in recent weeks after declining from a recent peak in early October 2021."