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Clean Power Plan could lead to tumbling coal output say EIA

Published by
World Coal,

The Environmental Protection Agency’s (EIA) analysis of the US Environmental Protection Agency’s proposed Clean Power Plan anticipates coal production levels at all major US coal basins will be affected – with production in the west seeing the largest declines.

The EIA predicts the rule will lead to less coal-fired electricity generation but there is several factors that indicate potential increases in coal production from 2024 – 2040, for example increased natural gas prices, increased electricity demands and increased renewable capacity.

In the Annual Energy Outlook 2015 Clean Power Plan Base Policy Case, the EIA indicates Western coal production will be 214 million short t lower by 2024 compared to the Reference case. Western coal production in the Base Policy case closes the gap with the Reference case to only 110 million short t (19% lower) but does not return to its 2013 production level by 2040.

Appalachian coal production in the Base Policy case is anticipated to be lower by 46 million short t (19%) lower for 2024 compared to the Reference case; the total production approximately reaching 200 million short t afterwards. According to the Reference case, the power sector is predicted to be less dependent on Appalachian coal; the proposed rule furthers this trend. Power consumers 150 million short t of Appalachian coal in 2013. In the Reference case this is to fall to 106 million short t in 2040 and to 70 million short t in the Base Policy case.

Compared to the Reference case, in the Base Case the Interior region – largely including the Illinois and Gulf-lignite basins ¬– is 103 million t (45%) lower by 2024. After 2024, the interior region production increases to 211 million t in 2040, however this is 88 million t lower than the projected levels without the proposed rule.

The EIA’s analysis also includes outlooks on potential scenarios where the availability of oil and natural gas resources are higher and where there is increased economic growth and how this may change coal production and the power industry.

Edited from Press Release by Harleigh Hobbs

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