U.S. coal demand has decreased due to the increased availability of natural gas, growth in renewable energy sources, and stricter environmental regulations.
One of the primary reasons for the decline in U.S. coal demand is the increased availability and affordability of natural gas. The advent of hydraulic fracturing and advanced drilling techniques led to a significant expansion of natural gas production, resulting in lower natural gas prices. Many power plants have shifted from coal to natural gas as it produces fewer greenhouse gas emissions and can be more economically viable.
These are positive developments given coal’s role as the fossil fuel source with the highest carbon dioxide emissions. However, it’s very important to note that U.S. demand is small relative to the world. The U.S. uses only 6.6% of the world’s coal, so coal consumption trends outside the U.S. are even more important.Coal consumption is still high and growing in many developing countries, particularly in Asia.
This trend is set to continue. Last year the Chinese government approved a record-breaking 86 gigawatts of new coal-fired power capacity. This raises significant doubts about whether China can meet its emissions goals by 2030.