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| Fig. 1: U.S. coal usage starting in 1965. [3] Coal consumption in the US has dropped substantially from its peak in 2007. (Source: W. Golub) |
Coal has been a major source of energy for the US for much of its recent history. However, as can be seen in Fig. 1, coal usage has slowed dramatically with the introduction and popularization of other forms of energy production. Continuing to maintain knowledge of our coal usage is critical for understanding our nation's environmental impact as well as its economic energy composition. Coal has many uses: it powers many plants that produce electricity for our electric grid, supplies factories that produce steel and other non-energy goods, and is even still occasionally used as a direct source of heat for homes and businesses.
To determine the market value of all coal consumed in the United States, I found a study by the US Energy Information Administration with historical information on coal usage within the US. It showed that the USA consumed 545,685,000 short tons of coal in 2021 (an increase from the 476,693,000 short tons consumed in 2020). The majority of this coal (501,427,000 short tons) was used for energy generation. [1]
To find the average price of coal, I took the percentages of coal sold to each industry and multiplied each by the average consumption price of coal within each industry in the US. The percentages for Electric Power, Other Industrial, Coke, and Commercial/Institutional are .918, .047, .032, and .0014, respectively. [2] The prices for each of those categories are $37.32, $57.89, $122.37, and $83.00 dollars per short ton, respectively. [2] Multiplying and summing, we have
| 0.918 × $37.32 ton-1 + 0.047 × $57.89 ton-1 | |||
| + | 0.032 × $122.37 ton-1 + 0.0014 × $83 ton-1 | = | $41.01 ton-1 (short) |
The market value is then
| 5.46 × 108 tons y-1 × $41.01 ton-1 | = | $2.24 × 1010 y-1 |
$22.4 billion is a non-trivial amount of spending, though it is clearly small in the context of historical consumption that Fig. 1 shows and our broader energy spending. While coal use is in decline, it is clearly still an element of our national energy portfolio. This number will likely continue to fall, but for those farther away from the use of coal in the production of electricity or industrial goods, having a sense of the dollar values involved is valuable in thinking about our energy future and policies. For all the talk about our national coal industry, it no longer appears to be a significant force in our economic future.
© William Golub. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] "Monthly Energy Review: October 2022," U.S. Energy Information Administration, DOE/EIA-0035(2022/10), October 2022.
[2] "Annual Coal Report 2021," U.S. Energy Information Administration, October 2022.
[3] "BP Statistical Review of World Energy 2022," British Petroleum, June 2022.