US increases its coal export to Europe and Asia

David McHutchon | July 31, 2017 | Views: 150

Coal exports to Europe and Asia are surging despite criticism from countries such as France and China over President Trump’s decision to exit the Paris climate change agreement, according to new federal data, noted.

Coal exports for making steel and generating electricity rose 58 percent in the first three months of the year compared to the first quarter of 2016, the Energy Information Administration reported this month. The Energy Department’s independent analysis arm said it is not sure how long the trend will last.

The trend is continuing into the second quarter, with exports up 60 percent from a year ago, Reuters reported Friday.

However, the levels are still much lower than the peak exporting days of five years ago.

The first-quarter export numbers show coal supplies to Europe and Asia for electricity production rose by 6 million short tons while metallurgical coal rose by 2 million short tons. Nevertheless, the agency’s most recent projections show the trend will eventually subside.

One of the interesting points in the rise of U.S. coal exports comes from who is buying it — Europe. Many of the countries on the continent have criticized Trump’s decision to withdraw from the United Nation climate deal that the Obama administration signed onto.

Trump called the climate agreement a bad deal for the U.S. because it allowed some of the largest emitters of greenhouse gases, principally China and India, to continue their use of the fossil fuel over the next decade, while the U.S. would be required to begin phasing down its emissions from fossil fuels sooner. Many scientists blame the emissions from burning fossil fuels for driving man-made climate change.

The agency said the jump in coal shipments was coming from demand in the United Kingdom, which has climbed 175 percent, and a doubling of exports to France, which has been the most vocal critic of Trump’s decision to withdraw from the Paris deal.

The export surge to Europe has climate change economists wagging a finger at European nations that like to criticize Trump. “If Europe wants to lecture Trump on climate, then EU member states need transition plans to phase out polluting coal,” said Laurence Watson, a coal researcher at the Carbon Tracker Initiative based in London.

Although increased coal demand is helping Trump’s energy agenda, the mining industry is still recovering after a number of top coal producers had been in bankruptcy proceedings a year ago. Many of the coal export facilities on the Gulf and Atlantic coasts are working well below their intended capacity, while plans to build export facilities in the Northwest have been delayed or scuttled completely.

“With coal exports running well below export capacity, no significant expansions of coal export facilities in the United States are currently under construction,” EIA said in this month’s public coal reporting.

Consol, a former coal firm turned natural gas company, operates one of two coal export facilities on the Atlantic Coast that ships out of Baltimore.

The Consol terminal, along with another owned by railroad giant CSX, has the ability to export slightly more than the 21 to 22 million short tons that were shipped from the U.S. in the first quarter of 2017, according to Energy Information Administration.

“Facilities in the Norfolk, Va., area alone have the capacity to export approximately 84 [million short tons] annually,” which is more than the 61 million short tons that were exported in 2016. The U.S. had the capability of shipping 257 million short tons of coal in 2016, which means 196 million tons of capacity went unused.

The Trump administration for the most part is not focused on coal exports as much as it is on increasing natural gas exports from the U.S. to ports in Europe, Asia, and Latin America. Trump has made increased use of American natural gas a top priority in discussions with foreign leaders, and the number of natural gas export terminals is set to grow through next year.

Talk of coal export terminal expansion projects in Baltimore have not taken any serious steps forward, while expansion projects at smaller terminals on the Great Lakes and California have stalled, according to the EIA. One project in the Pacific Northwest is awaiting a major environmental permit decision from the state and the Army Corps of Engineers later this year to be built in Washington state, called the Millenium Bulk Terminal. But the administration has been quiet on the topic, while other projects in the region have been canceled.

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