EIA Predicts Coal Production Will Plummet Under Regs

Jul 10, 2016


If new carbon regulations go into effect, U.S. coal production will fall by around 25% by 2040, according to updated projections by the U.S. Energy Information Administration (EIA). The Clean Power Plan is the first-ever federal rule that would limit carbon emissions from power plants. The rule is now on hold while legal challenges against it are resolved. 

 

If the plan doesn't ever take effect, the EIA predicts demand for coal will remain relatively flat over the next 25 years. That scenario assumes natural gas prices will increase and that international demand for US coal will dip down and then return back to higher 2014 levels.  

 

In May, the credit ratings agency Moody's reported that the short-term outlook for coal is negative and that the industry has undergone a severe long-term structural shift. 

 

Whether or not the Clean Power Plan is ever implemented, the EIA predicts that Americans will be getting more and more electricity from natural gas and renewables and less from coal.