Coal In Your Stocking This Year Will Likely Be From Wyoming

  • Tuesday, January 28, 2014
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  • Keywords:Coal

The U.S. Energy Information Administration (EIA) highlights a positive future for Powder River Basin (PRB) coal. That's good news for miners like Peabody Energy , Arch Coal , and especially Cloud Peak Energy .

It's all about the burn
Utilities have been turning to natural gas for new generating capacity. That's a long-term trend that isn't going to change, but there's still the issue of cost. For example, according to the EIA "Higher natural gas prices in 2013 resulted in the greater use of coal for electricity generation and higher domestic consumption of coal."

But coal is still in the doldrums because utilities haven't been buying more coal, they've been burning down their stockpiles. "Coal inventories in the electric power sector dropped by 31 million tons from the end of 2012 to 154 million tons at the end of September 2013. The significant drawdown reduced the stockpile to below the monthly five-year average and met the increased demand for electricity generation."


At the same time, coal miners have been shutting production. This is a healthy clearing process that's aligning coal supply and demand at a new, likely lower, level. And the coal basin set to benefit first is the PRB. "Subbituminous coal, mostly from the Powder River Basin, was burned from stockpiles at a greater rate than bituminous coal..." and this suggests there will be "...greater demand for delivery of PRB coal."

  • [Editor:editor]

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