The U.S. coal sector between shale gas and renewables: Last resort coal exports?

Highlights: • Observed rate of U.S. coal sector decline has exceeded many model scenarios. • Taking into account power plant lifetime rapidly continues downward trend of coal. • Ambitious global climate policy would make U.S. coal sector collapse in the 2030s. • West Coast exports could delay U.S. coal sector decline but is an uncertain strategy. • Low-cost, high-productivity Powder River Basin also has substantial decline risk. Coal consumption and production have sharply declined in recent years in the U.S., despite political support. Reasons are mostly unfavorable economic conditions for coal, including competition from natural gas and renewables in the power sector, as well as an aging coal-fired power plant fleet. Nevertheless, coal remains a major energy source in the North American energy markets. Supplementing EMF34 energy system analyses, we take a sectoral perspective to analyze coal's future role in this context. The U.S. Energy Information Administration as well as most models in EMF34 depict continuously high shares of coal-fired power generation over the next decades in their current policy scenarios. We contrast their results with coal sector modelling based on bottom-up data and recent market trends. We project considerably lower near-term coal use for power generation in the U.S. This has significant effects on regional coal production. Allowing new export terminals along the U.S. West Coast could ease cuts in U.S. production. Yet, exports are a highly uncertain strategy because the U.S. could be strongly affected by changes in global demand, for example from non-U.S. climate policy.