Powder River Basin coal

A large large mining truck filled with coal passes by another truck heading into the pit at the Eagle Butte mine north of Gillette.

For the first time since before 1885, the annual United States energy consumption from renewable sources outpaced coal, according to a new report released Thursday by the federal U.S. Energy Information Administration.

Market pressures from cheap natural gas and reduced production continues to drag down the nation’s thermal coal industry. Compared to 2018, last year’s consumption of coal in the U.S. was down nearly 15%, the EIA reports. At the same time, total consumption from renewable sources grew by 1%.

Last year, coal accounted for 11.3 quadrillion British thermal units of power consumption (quads) while renewables combined for 11.5 quads, according to the report. Renewables include solar, wind, geothermal, biofuels, waste, wood and hydro.

“Historically, wood was the main source of U.S. energy until the mid-1800s and was the only commercial-scale renewable source of energy in the United States until the first hydropower plants began producing electricity in the 1880s,” the report says. “Coal was used in the 1800s as a fuel for steam-powered boats and trains and making steel, and it was later used to generate electricity in the 1880s.”

Last year’s decline was the sixth consecutive for coal as a fuel source to make electricity in the United States. It also saw electricity generation from coal drop to its lowest level overall in 42 years.

“Natural gas consumption in the electric power sector has significantly increased in recent years and has displaced much of the electricity generation from retired coal plants,” the EIA report says.

Along with coal’s decline, the growth in U.S. renewable energy is “almost entirely attributable to the use of wind and solar in the power sector,” according to the report. For the first time in 2019, wind surpassed hydro and is the now the largest source of renewable electricity.

The Powder River Basin, which makes up much of Campbell County, produces about 40% of the thermal coal used in U.S. power generation, the EIA reports. However, that statistic doesn’t tell a complete picture. That’s because while the PRB continues to be a significant source of the coal that’s consumed by power plants, there overall has been a big drop in coal consumption.

About a dozen years ago, the PRB accounted for 50% of all electricity produced in the nation. That has dropped to about 22%, according to the EIA and other agencies.

While the PRB produced 266.8 million tons of coal in 2019, that was about 9% less than the 293.5 million tons produced the year before. And it’s 40% less than the region’s high point in 2008 when 446.5 million tons of coal came out of the basin.

Projections for 2020 before the COVID-19 pandemic were for the basin’s production to be just over 200 million tons.

The coronavirus has had a significant impact on the energy sector with consumption down nearly 20% as people stay home and economies are shut down. That’s only fueling an already poor outlook for thermal coal, said Benjamin Nelson, lead coal analyst for Moody’s Investors Services.

“Coal-fired power generation has fallen below renewable energy for the first time in more than 130 years — when wood was the primary source of energy in the United States,” he said in a statement reacting to the EIA report. "We expect ongoing secular decline in the demand for coal, accelerated by the economic fallout from the global outbreaks of COVID-19 will persist in the early 2020s.”

This is a developing story and will be updated.

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