It’s Really Happening: The Collapse of U.S. Coal


Coal production is not just declining. It’s falling off a cliff — and it’s barely a third of what it was just six years ago, according to the U.S. Energy Information Administration (EIA). The worst is yet to come, as the EIA predicts 2016 will be the biggest year-on decline for coal … ever.

Nothing is crazy when it comes to the collapse of coal anymore. Just a few years ago, coal was still America’s top fuel and its lobbyists were among the most well-connected (and deep pocketed) in Washington, D.C. Today, that era seems like a distant dream. The coal lobby is shrinking fast, and the industry isn’t faring much better: Just last month the largest private coal company, Peabody Energy, which in 2008 had a market cap of $20 billion, declared bankruptcy.

“A profound shift is happening right now in America’s energy landscape,” said Mary Anne Hitt and Bruce Nilles, the director and senior director of the Sierra Club’s Beyond Coal Campaign, in a joint letter last month. “With the bankruptcy of Peabody Energy, it’s clear that the coal industry is in decline, and that a massive shift in the global market favoring clean-energy sources like wind and solar is underway.”

According to the EIA, 2016 coal production is projected to fall 16.7 percent to 746 million tons, which it would mark over a 25 percent decrease from the 2014 total of 1 billion tons. Even last year, no one could have foreseen such a huge drop in just 12 months.

It’s hard to overstate how unexpected and massive this shift is. Remember, the United States is routinely called the ‘Saudi Arabia of coal.’ We have more of the dirty fossil fuel than any other country, an astounding 28 percent of recoverable global coal reserves. That’s 260 billion short tons in total, much of which, even today, remains underground. Coal was, literally, the foundation of the American economy for generations, and, just a decade ago, seemed set to cement its status as our primary energy source for the foreseeable future.

Amazingly, the collapse of coal has caught nearly every financial analyst at any major bank by surprise, yet many still believe that this is merely a temporary lull, akin to what petroleum saw in the late ’90s when oil prices dropped to just $18 a barrel. They think, with time — like with petroleum — that coal will return to higher prices and once again be a competitive global energy source. That is why, to this day, many continue to invest in coal, including the Bill and Melinda Gates Foundation, as 3p reported last year.

While I have no sympathy for investors who got it wrong, I do have sympathy for those really feeling the brunt of coal’s collapse. One thing that we must consider is that thousands of low-wage workers in the coal industry no longer have jobs, and many mines have been shut down without having conducted proper clean-up. They cannot – and must not – be forgotten.

“America needs to invest in the livelihoods of workers and communities historically dependent on coal,” Hitt said. “This means making sure that the new clean-energy economy provides good jobs for the people who most need them, while also ensuring that mining sites are cleaned up and reclaimed for the health and safety of communities near them.”

What’s even more encouraging is that we’re starting to see signs that this shift away from coal is happening globally. China has sharply dropped its coal imports, while earlier this year Vietnam announced plans to abandon its previously ambitious coal power plants in favor of investment in renewable energy. India’s coal imports dropped by a surprising 35 percent last year due to massive oversupply and a quicker-than-expected expansion in renewables.

Coal is on the way out. Now, we just need to take care of natural gas and oil.

Image credit: Kirloskar via Flickr


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Nithin Coca is a freelance journalist who focuses on environmental, social, and economic issues around the world, with specific expertise in Southeast Asia.

8 responses

  1. “Just last month the largest private coal company, Peabody Energy, which in 2008 had a market cap of $20 billion, declared bankruptcy.”

    After being named to Fortune Magazine’s list of America’s Most Admired Companies in 2008, Peabody Energy saw $787 million of losses, was removed from S&P 500, and had its ratings downgraded to “underperform” and “negative” by Goldman Sachs, Standard & Poor, Bank of America, and others in 2014. Falling global coal demand, stricter environmental controls and a glut of natural gas have pushed other big miners, including the second largest US coal producer, Arch Coal into bankruptcy protection over the past year. Five years ago, Peabody Energy stock was over $800 a share, losing 99.85% of its value as the coal industry has tanked, and today’s value is a mere $1.36 per share.

  2. The drop in coal production and usage is a direct result of only one thing, natural gas. Across America power plants are being retrofitted/built to be ran on the cheap natural gas supply that fracking has provided the United States. Wind and Solar still make up less than 6% of energy produced in this country. If you are happy about coal disappearing from the American energy picture, thank a Fracker.

  3. I’m not sorry to see coal go, but we need to do something for the workers and coal towns. whose livelihood is gone. Retraining at the least ,and some other help getting jobs, so they not end up on welfare in a dying town.

  4. The natural gas comes from fracked wells that leak enough methanr that they are every bit as bad as coal for AGW. Fracking needs to go the way of coal, and soon.

  5. It’s over deniers. So far this year, the US has added 18 mega watts of natural gas generating capacity 29 MW of hydro, 33MW of bio mass, and and 1229 MW of wind and solar. So, 98.5% of all new capacity is renewables, and almost all of that wind and solar. It’s time to get a new hobby.

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