Consumption

Preliminary data shows that total coal consumption declined slightly in 2008, dropping by 0.6 percent from the 2007 level. Total U.S. coal consumption was 1,121.7 million short tons, a decrease of 6.3 million short tons, with all of the coal-consuming sectors having lower consumption for the year. Although all sectors had declines, the electric power sector (electric utilities and independent power producers), which consumes almost 93 percent of all coal in the U.S., is the overriding force for determining total domestic coal consumption.

Figure 3. Electric Power Sector Consumption of Coal by Census Region, 2008 (Million Short Tons and Percent Change from 2007)	Figure 4. Comparison of Coal Consumption to Coal Generation

Coal consumption in the electric power sector decreased by 0.3 percent or 3.5 million short tons to end 2008 at 1,041.6 million short tons (Figure 3), while coal-based electricity generation in kilowatt hours decreased at a slightly higher rate of 1.1 percent, reflecting increasing volumes of lower Btu western coals (subbituminous and lignite) to generate electricity (Figure 4.) (Note: Graph shows both tons of coal consumed in the electric power sector and coal-generated kilowatt hours indexed to 1990, i.e., values for the data were set to 1 for 1990. 1990 was the year that the Clean Air Act Amendments were passed.) Nationally, total generation in the electric power sector from all fuels declined in 2008 by 0.9 percent with losses in electricity generation by all sources except the hydroelectric and nuclear sectors in the U.S. (Figure 5). The increase of 1.1 percent in electricity generation by hydroelectric facilities in the country was a direct result of the improved water levels experienced across all regions during the year. Nuclear power generation increased slightly in 2008 by 0.3 percent. The decreases in electric generation in 2008 by other fuel categories were 0.6 percent for the petroleum and other sources category and 2.0 percent for natural gas.

Figure 5. Share of Electric Power Sector Net Generation by Energy Source, 2007 vs. 2008 (Million Short Tons)

Total electricity generation in the U.S. is primarily driven by two factors: economic growth and weather (as measured by heating and cooling degree-days). Economic growth slowed during the first three quarters of the year and declined during the fourth quarter resulting in the Gross Domestic Product (GDP) of the U.S. for 2008 increasing by only 1.3 percent for the year, down from the 2.0 percent growth experienced in 2007. The weather was also a factor in the decline of total electricity generation in 2008. Although the winter weather across a large portion of the country was colder than it was in 2007, it was still not as cold as the normal 30-year average. According to preliminary data from the National Weather Service Climate Prediction Center of the National Oceanic and Atmospheric Administration (NOAA), heating degree-days in 2008 were lower for the country as a whole than the normal by 0.6 percent. Also, the summer weather in 2008 was not as hot over most parts of the country as it was in 2007, which lead to a decrease in cooling degree-days of 11.1 percent, resulting in less need for electricity to run air-conditioners and lower demand for generation.

Of the nine Census Divisions, coal is a minor component (less than 20 percent) in the fuel mix for electricity generation in two divisions, New England and Pacific, and a major component (more than 50 percent) in five divisions, East North Central, West North Central, South Atlantic, East South Central, and Mountain. In the other two divisions, coal is one of two main fuel sources for the electric power sector. In the Middle Atlantic, coal competes with nuclear power for dominance, while in the West South Central coal competes with natural gas.

In 2008, three of the nine Census Divisions had an increase in total electricity generation, while five of the nine had increases in coal-based generation. However, only four of the five Census Divisions that had increased coal-based generation, had increases in coal consumption in 2008 while the other remained at the same level. The decreases in coal consumption by the four Census Divisions more than offset those that had increases. The decline in total U.S. coal consumption for 2008 in the electric power sector was primarily a result of lower consumption in two of the Census Divisions, the South Atlantic and the Middle Atlantic.

The South Atlantic Census Division usually accounts for about 20 percent of total U.S. electricity generation, while the Middle Atlantic Census Division usually accounts for about 10 percent of the total. Coal is the primary fuel for electricity generation in the South Atlantic while in the Middle Atlantic coal competes with nuclear power for the largest share of total generation. In 2008 total generation in the South Atlantic Census Division decreased by 3.5 percent (Table 3) while coal-based generation decreased by 4.4 percent. The decline in coal-based electricity generation in 2008 in the South Atlantic resulted in a decrease in coal consumption of 5.5 million short tons, down 2.9 percent to end the year at 180.4 million short tons. Both nuclear and hydroelectric generation increased in the South Atlantic Census Division in 2008, with the increase in nuclear generation of only 0.9 percent. Even though hydroelectric generation increased by 4.7 percent for the year, it still only accounted for slightly more than 1 percent of total generation for the division. In 2008 total generation in the Middle Atlantic Census Division decreased by 2.0 percent, while both nuclear and hydroelectric generation increased for the year. The increase in the Middle Atlantic Census Division for hydroelectric generation was 7.5 percent while the increase in nuclear generation was 1.4 percent. Coal-based generation declined in 2008 by 4.9 percent and that resulted in a decrease in coal consumption of 3.4 million short tons, down 4.9 percent to end the year at 66.6 million short tons.

In the East South Central Census Division coal is the dominant fuel for generation, typically accounting for just under two-thirds of total generation in a year. In 2008 total generation in the East South Central Division decreased slightly by 0.2 percent, while coal-based generation declined by 2.2 percent. Both nuclear and hydroelectric generation increased in the East South Central in 2008. The decline in coal generation in the division in 2008 resulted in a decrease of 1.2 million short tons in the East South Central Census Division to a level of 114.3 million short tons.

Over half of the electricity generated in the Mountain Census Division is derived from coal. In 2008 total generation in the Mountain Census Division increased by 3.1 percent, with increases experienced by all generation categories. However, coal-based generation increased the least, growing by 1.5 percent with the increases in the other sources ranging from 1.7 percent for natural gas to 39.5 percent for petroleum and other sources. Total coal consumption in the electric power sector in the Mountain Census Division increased in 2008, ending the year at 116.3 million short tons, an increase of 1.1 million short tons. In the West South Central Census Division coal competes with natural gas as the primary source for electric power generation, both accounting for about 40 percent of the Division’s generation. Total generation in 2008 in the electric power sector in the West South Central Census Division grew by 0.8 percent, while coal-based generation grew at a higher rate of 1.4 percent. Declines in generation were experienced by both natural gas and nuclear in the division. Total coal consumption in 2008 for the electric power sector in the West South Central Census Division increased by 1.5 million short tons, or 1.0 percent, ending the year at a total of 156.1 million short tons.

In the East North Census Division, coal usually accounts for about 70 percent of total generation and although total generation in the division decreased in 2008 by 0.8 percent, coal-based generation increased by 0.2 percent. The only fuel source to have a decrease in generation for the division in 2008 was natural gas, declining by 30.2 percent. For 2008, total coal consumption in the East North Central Census Division was 239.2 million short tons, an increase in coal consumption of 2.1 million short tons, or 0.9 percent, making it the largest electric power coal-consuming division in the U.S. The dichotomy of slightly lower total generation with increased coal consumption in the East North Central Census Division is a result of an increasing share of lower Btu coal being used by the electric generating plants in the division.

In the West North Central Census Division coal is the dominant source for electric power generation accounting for about three-fourths of the Division’s generation. Total generation in 2008 in the electric power sector in the West North Central Census Division grew by 1.2 percent, while coal-based generation grew by 1.7 percent. Total coal consumption in 2008 for the electric power sector in the West North Central Census Division increased by 2.2 million short tons, or 1.5 percent, ending the year at a total of 149.8 million short tons.

Coal accounts for less than one-sixth of total generation in the New England Census Division and in 2008 total coal consumption for electricity generation decreased by 0.4 million short tons, ending the year at a total of 8.5 million short tons. Coal accounts for less than five percent of total generation in the Pacific Census Division and in 2008 total coal consumption for electricity generation increased slightly by 0.2 percent to end the year at 10.4 million short tons.

Coal consumption in the non-electric power sector (comprised of the other industrial, coking coal, and the commercial and institutional sectors) declined in 2008 (Figure 6). Coal consumption at coke plants decreased by 0.6 million short tons to end the year at 22.1 million short tons, a decline of 2.8 percent. The decline in U.S. coke production in 2008 was a result of the economic downturn in the last quarter of the year when several steel plants lowered production, some by more than half, in response to the world-wide drop in demand for their products.

Figure 6. Coal Consumption by Sector, 1999-2008

Although the GDP grew in 2008 by 1.3 percent, the economic growth did not extend into the manufacturing sector, and as a result, coal consumption in the other industrial sector declined by 2.1 million short tons to end the year at 54.5 million short tons. Within the manufacturing economic sector of the North American Industry Classification System (NAICS) most of the manufacturing subsectors showed lower coal consumption for 2008. The only major coal-consuming manufacturing subsector to have an increase in consumption was the paper sector and it had only a slight increase in coal consumption. However, the decrease in coal consumption in 2008 in the other industrial sector was primarily a result of the large decrease in the nonmetallic mineral products segment, a decline of 1.1 million short tons. Also contributing to the overall decline in consumption for the other industrial sector was the decrease of 0.4 million short tons by the primary metal manufacturing segment. Coal consumption in the commercial and institutional sector decreased slightly in 2008, ending the year at 3.5 million short tons.