Economics, Energy and the Environment

Energy fact of the week: Rising U.S. coal exports

Last week, the Energy Fact looked at the surprising export figures for ethanol. This week: coal. With the double play of cheap natural gas and the environmental regulatory crusade squeezing coal-fired power, it might seem like tough times for coal. However, exports of U.S. coal have been steadily increasing the last few years, after having declined almost 50 percent between the late 1980s and the late 1990s. Figure 1 shows the trend of coal exports from 2000 – 2010; data through September 2011 indicate the full year will easily top 2010. Exports in 2010 amounted to 7.5 percent of total U.S. production, up from 4.4 percent of total production in 2005. Overall coal production in the United States has been flat over the last decade.

Figure 1: U.S. Coal Exports, 2000 – 2010

Source: Energy Information Administration.

More interesting is where we are exporting our coal. Off the top of your head you’d probably guess China or India, where coal consumption is soaring. U.S. exports to those nations have risen a little, but both India and China have plenty of their own coal. Our leading Asian customer is South Korea.

But the largest customer by far is Europe, which imports twice as much coal as all of Asia. More than a third of our coal exports through September of 2011 went to Europe, up 34 percent from the first nine months of 2010. Figure 2 below shows that U.S. coal exports to Europe declined precipitously in the 1990s, largely as a result of Britain’s rapid transition to natural gas from coal, German reunification that saw the shutdown of a large number of coal-fired plants in the former East Germany, and the continued expansion of nuclear power in France, which imported nearly 10 million tons of U.S. coal in 1990, but only about 3 million per year recently. Figure 2 shows the rebound in U.S. coal exports to Europe over the last decade. One reason for this trend is that American coal tends to be cheaper than European coal, but a second reason receives little attention—Europe has reached the point of diminishing returns on its program to reduce greenhouse gas emissions from fossil fuels, and is continuing to use coal for the same reason the United States does: it’s cheaper.

Figure 2: U.S. Coal Exports to Europe, 1990 – 2010

Source: EIA.

In case you’re wondering, our leading export market for coal in 2010 (excluding Canada) was Brazil. Number two was the Netherlands, up sharply over the last few years, as shown in Figure 3.

Figure 3: U.S. Coal Exports to the Netherlands, 1990 – 2010

Source: EIA.

One thought on “Energy fact of the week: Rising U.S. coal exports

  1. Steve,
    Not sure I see much trend here on coal exports, given that 2008 and 2010 look a lot alike. Also, it’s important to segregate metallurgical coal from steam coal exports, as met coal has long dominated the coal export market. Steam coal has always been a bit of a swing export.
    Back in the mid-1980s, there was a great boom in coal exports, some 100 million tons annually as I recall, most of it met coal, with some upswing in steam coal. A driving factor was a weak US dollar, which made the coal very attractive to Japanese steelmakers.
    It’s tough to compete with the Aussies, particularly in steam coal, as their mines are closer to the fastest-growing markets in Asia and also are located close to ocean ports, reducing the cost of getting the coal from the mine to the ships.
    Thanks for your always excellent work,
    Ken Maize

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