Coal shipments are down and a looming nationwide railroad strike likely will make it worse
Shipments of coal to U.S. power plants fell significantly over the last decade, which is notable for Wyoming as its the top producer of coal in the country.
The U.S. Energy Information Administration (EIA) released new data showing that from 2010 to 2021 coal shipments to U.S. power plants fell by about half.
This does not come as a huge surprise, as demand for coal fired electricity in the country has significantly declined over the last 20 years. The market has shifted to favor natural gas and renewables, causing many coal-fired power plants to shut down. About 20 years ago, coal accounted for 50 percent of electricity, now it is about 22 percent.
“Obviously, with power producers needing to provide power to their customers at the lowest price, natural gas was very much a very attractive option,” Travis Deti, the executive director of the Wyoming Mining Association, said. “That and with public policy and climate change issues, coal was kind of in the sights to go down a little bit.”
However, Deti added the state actually saw a large bump in demand for coal over the last year.
“Wyoming coal is competitive when natural gas prices are around $2.50 in that range, and they've been, heck, they've been up over $8 at points this year,” he said.
The EIA data also reflects that, with shipments increasing five percent in 2021 compared to 2020.
Deti said he is forecasting a relatively good production year, but that does not mean the coal can actually be shipped, as the industry is heavily reliant on railroads. In fact, 70 percent is shipped via railroads.
“And unfortunately, the railroads didn't keep pace, and they haven't kept pace. And they've got a lot of issues that they're dealing with right now,” Deti said.
Railroad union workers are threatening a nationwide strike over pay and sick leave policies. The strike was averted in September due to a tentative agreement between workers and companies that was brokered by the White House; however, union members ultimately rejected the deal putting a strike back on the table.
Deti speculated a strike could come by the end of November, which would halt all coal shipments.