EIA: Coal production to rise after 2016, except from Appalachia - Beckley, Bluefield & Lewisburg News, Weather, Sports

EIA: Coal production to rise after 2016, except from Appalachia

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Although total U.S. coal production is expected to rise after 2016, Appalachian coal will not, according to the U.S. Energy Information Administration.

"Appalachian coal production declines substantially from current levels, as coal produced from the extensively mined, higher-cost reserves of Central Appalachia is supplanted by lower-cost coal from other regions," reads the EIA's summary of a partial release of its Annual Energy Outlook 2013, begun April 15 and to continue over the coming month.

"An expected increase in production from the northern part of the Appalachian basin moderates the overall decline," the forecast reads.

The Annual Energy Outlook is the U.S. Department of Energy's most comprehensive forecast of U.S. energy production, consumption and market trends. The AEO2013 is the agency's first forecast through 2040, extended beyond the AEO2012's forecast to 2035. The reference case takes into account policies that are in place. AEO 2013 also includes a low-growth case, a high-growth case and many alternative policy cases.

These first sections to be released include forecasts of market trends and discusses legislation and regulation, as well as a comparison with other projections. Sections to be released through May 2 include, among others, analyses of competition between coal and natural gas in the power sector and of the impact of growing natural gas liquids production.

In its market trends forecast, the agency sees average energy use per person declining from 2011 through 2040 due to more efficient appliances and tightening vehicle fuel economy standards. Also contributing is a continued shift away from manufacturing, particularly energy-intensive manufacturing. By 2040, energy use per person is forecast to decline to a level not seen since 1963.

Notably, while the energy intensity — the amount of energy per unit of gross domestic product — of the economy as a whole falls, the energy intensity of energy production rises. The energy intensity of mining activity increases with resource depletion over time, the EIA forecasts, and the only industry subsector in which energy intensity increases is refining, as coal-to-liquids production and the use of heavy crude feedstock, both of which are more energy-intensive to process than typical crude oil, increase after 2022.

The aggregate fossil fuel share of total energy use falls from 82 percent in 2011 to 78 percent in 2040 in the reference case, while use of renewables grows.

Natural gas consumption grows about 0.6 percent per year from 2011 to 2040, led by increased use for the generation of electricity and, at least through 2020, by industrial use. Coal consumption remains below 2011 levels through 2030 and ends the period having increased by an average 0.1 percent per year.

Domestic production of natural gas and oil are seen growing, with prices remaining low at least through the first years of the forecast.

Early declines in U.S. coal production are followed by growth after 2016 driven by exports and by increasing use of coal in the electricity sector as electricity demand grows and natural gas prices rise.

But coal from Appalachia, which peaked in 1990 at 12.35 quadrillion British thermal units, or 55 percent of U.S. production, falls from its level of 8.5 quads in 2011 to about 7.5 quads in 2040 — just 32 percent of the total.

The detailed forecast figures show production of Northern Appalachian coal — the kind mined in northern West Virginia and northward — increasing, while the Central Appalachian coal mined in southern West Virginia and the surrounding region declining dramatically.

It has to be noted that, while the EIA points to increased U.S. production after 2016, it does not project U.S. production topping the 1998 high of 24 quads at any point in the forecast period.

Energy related carbon dioxide emissions are projected to remain below the 2005 level through 2040.

Legislation and regulations reviewed briefly in the current release include, among others, the Clean Air Interstate Rule that remains in effect following the court's rejection of the Cross-State Air Pollution Rule in August, Maximum Achievable Control Technology for boilers, and the renewable energy requirements and goals in place in 30 states and the District of Columbia.

Comparisons with other forecasts are awkward. Some forecasts, such as ExxonMobil's and BP's, include costs for carbon dioxide emissions in their projections while EIA does not, for example; the International Energy Agency uses 2010 as a base year rather than 2011, and all forecasters use varying assumptions.

To look briefly at the comparisons just for coal, the AEO2013 reference case projects the highest levels of coal production and prices in 2040 in comparison with outlooks available from those and other forecasters, seven in total; consumption is higher than in all but two of the other forecasts. The differences are attributed to the broadly varying assumptions among the forecasts.