What is the role of coal in the United States?

Coal is an Abundant U.S. Resource

The United States is home to the largest estimated recoverable reserves of coal in the world. In fact, we have enough coal to last more than 200 years, based on current production levels. Coal is produced in 25 states spread across three coal-producing regions. In 2011, approximately 72% of production originated in five states: Wyoming, West Virginia, Kentucky, Pennsylvania, and Texas.

Most of Our Coal is Used to Generate Electricity

Over 90% of U.S. coal consumption is in the electric power sector. The United States has more than 1,400 coal-fired electricity generating units in operation at more than 600 plants across the country. Together, these power plants generate over 40% of the electricity produced in the United States and consume more than 900 million short tons of coal per year.

Although coal-fired generation still holds the largest share among all sources of electricity, its use has declined since 2007 due to a combination of slow growth in electricity demand, strong price competition with natural gas, and increased use of renewable technologies. See related article — Today in Energy, July 6, 2012

While the share of our electricity generated from coal is expected to decrease by 2035, the amount of coal used to meet growing demand for power is expected to increase in the absence of new policies to limit or reduce emissions of carbon dioxide and other greenhouse gases. Revised emissions policies could significantly change the outlook for domestic coal use. See related article — Today in Energy, May 4, 2012

Besides its role in generating electricity, coal also has industrial applications in cement making and conversion to coke for the smelting of iron ore at blast furnaces to make steel. A small amount of coal is also burned to heat commercial, military, and institutional facilities, and an even smaller amount is used to heat homes.

The United States Exports Coal to Other Countries

Between 2000 and 2010, about 5% of the coal produced in the United States, on average, was exported to other countries. Coal exports come in two forms: metallurgical coal, which can be used for steel production, and steam coal, which can be used for electricity generation. In 2011, U.S. coal exports climbed to 10% (the highest level in two decades), partly because flooding disrupted coal mining in Australia, which is normally the world's largest coal exporter. Metallurgical coal dominated U.S. coal exports in 2011 with Europe the largest importer, followed by Asia. See related article — Today in Energy, June 19, 2012

The United States also imports a small amount of coal; some power plants along the Gulf Coast and the Atlantic Coast find it cheaper to import coal by sea from South America than to have it transported from domestic coal mines.

Coal Is a Relatively Inexpensive Fuel

Although some natural gas plants are more efficient than coal plants at generating electricity, in the past the fuel cost of generating one kilowatthour of electricity from natural gas had typically been higher than that of coal. In 2009, coal began losing its price advantage over natural gas for electricity generation in some parts of the country, particularly in the eastern United States as a surge in natural gas production from domestic shale deposits (made possible by advances in drilling technologies) substantially reduced the price of natural gas. See related article — Today in Energy, July 13, 2012

Environmental Effects from Using Coal

Coal is plentiful and fairly cheap relative to the cost of other sources of electricity, but its use produces several types of emissions that adversely affect the environment. Coal emits sulfur dioxide, nitrogen oxide, and heavy metals (such as mercury and arsenic) and acid gases (such as hydrogen chloride), which have been linked to acid rain, smog, and health issues. Coal also emits carbon dioxide, a greenhouse gas. In 2011, coal accounted for 34% of the energy-related carbon dioxide emissions in the United States. On the production-side, coal mining can have a negative impact on ecosystems and water quality, and alter landscapes and scenic views.

Outlook for Future Coal Use

The economics of burning coal may change if the U.S. adopts policies that restrict or otherwise control carbon dioxide emissions. For example, a cap-and-trade program to regulate carbon dioxide emissions would likely increase the cost of burning coal because of its carbon content, and thereby cause power companies to consider using less carbon-intensive generating technologies such as nuclear, renewables, and natural gas. In March 2012, the U.S. Environmental Protection Agency proposed a new source performance standard for emissions of carbon dioxide (CO₂) that would establish an output-based emission limit of 1,000 pounds of CO₂ per megawatthour for new fossil-fuel-fired power plants. This emission limit would effectively require that new coal-fired generating units employ carbon capture and sequestration (CCS) technologies to reduce uncontrolled emissions of CO₂ by approximately 50%.

Researchers are working on ways to lower the costs and improve the efficiency of various CCS technologies with a goal of capturing approximately 90% of the carbon dioxide from coal plants before it is emitted into the atmosphere and then storing it below the Earth's surface. CCS would theoretically address much of coal's carbon dioxide emissions; however, substantial economic and technological hurdles remain.