The U.S. Energy Information Administration on Jan. 12 continued to reduce its forecast for a rise in coal production in 2021, while declaring coal output and usage could climb further in 2022.

Coal production is expected to reach 603 million tons in 2021, a 12% jump from 537 million tons produced in 2020, the EIA said in its January short-term energy outlook. While the estimated rise in production could be positive news for the coal sector, it was lower than the 627 million tons of output forecast by the EIA in November and the 624 million tons of coal production it predicted in December.

EIA reiterated a belief the decline in coal output in 2020 was the result of pandemic-driven drops in demand. "This decline largely reflected lower demand for coal from the electric power sector and the coal export market. Lower natural gas prices made coal less competitive for power generation," the outlook stated, asserting a 41% increase in gas prices during 2021 would make "coal more competitive in the electric power sector."

The EIA projected increases in coal production will "moderate" in 2022, rising to 628 million tons of output "as forecast coal consumption growth slows." Coal's expected share of electricity generation in the U.S. was expected to rise from 22% in 2021 to 24% in 2022, according to the outlook.

Reflecting on the previous year, EIA stated coal consumption for all sectors totaled 476 million tons in 2020, a 19% decline from 110 million in 2019. The agency said it anticipates a 61 million tons rise in coal consumption from all sectors in 2021 "largely driven by an increase in demand from the electric power sector."

Addressing trade, EIA stated 2020 saw the second-lowest annual level of U.S. coal exports in a decade. Metallurgical coal exports totaled 42 million tons, a 24% drop from the previous year, and thermal coal shipments fell to 24 million tons, a 35% decline from 2019 exports.

U.S. coal exports are expected to rise 23% in 2021 as economies emerge from the pandemic and their economies restart activity. Exports are expected to rise by a further 12% in 2022 as market conditions "continue to normalize following the pandemic," but will still total levels lower than 2019 shipments, the outlook stated.

On pricing, EIA estimated coal prices will rise to $2.06/MMBtu in 2021 from $1.94/MMBtu in 2020, and climb further by one cent in 2022.