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The U.S. Coal Sector between Shale Gas and Renewables: Last Resort Coal Exports?

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  • Christian Hauenstein
  • Franziska Holz
Abstract
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. The U.S. Energy Information Administration as well as most models of North American energy markets depict continuously high shares of coal-fired power generation over the next decades in their current policies 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 coal production and mining employment. 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. Furthermore, coal production within the U.S. is likely to experience regional shifts, affecting location and number of mining jobs.

Suggested Citation

  • Christian Hauenstein & Franziska Holz, 2020. "The U.S. Coal Sector between Shale Gas and Renewables: Last Resort Coal Exports?," Discussion Papers of DIW Berlin 1880, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1880
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    References listed on IDEAS

    as
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    Cited by:

    1. Christian Hauenstein & Franziska Holz & Lennart Rathje & Thomas Mitterecker, 2022. "Stranded Assets in the Coal Export Industry? The Case of the Australian Galilee Basin," Discussion Papers of DIW Berlin 2003, DIW Berlin, German Institute for Economic Research.
    2. Yanguas Parra, Paola & Hauenstein, Christian & Oei, Pao-Yu, 2021. "The death valley of coal – Modelling COVID-19 recovery scenarios for steam coal markets," Applied Energy, Elsevier, vol. 288(C).

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    More about this item

    Keywords

    USA; coal; international coal trade; EMF34; numerical modeling; scenarios;
    All these keywords.

    JEL classification:

    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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