Coal consumption in America is plummeting. During the recent recession the volume of coal consumption fell from a peak of 94.7 million tons in July 2008, to 83.1 million in December 2009. Then, after rebounding briefly, new regulations and low natural gas prices served to crush demand for coal. The trailing twelve month average monthly consumption of coal fell to 74 million tons in October. That’s the lowest volume of consumption since October of 1989.
The striking drop is driven by environmental regulations and more importantly by inexpensive supplies of natural gas. With new regs for such things as mercury and greenhouse gas emissions coming online from the EPA, power companies are looking with increasing frequency to natural gas for new plants, and to replace older plants that can’t be economically cleaned up.
It’s perhaps somewhat ironic that after environmentalists have fought fracking and drilling for years, the large supplies of natural gas unlocked by the technology have done more to reduce greenhouse gas emissions than any regulation ever has.