Coal

How Russia’s War Buoyed U.S. Coal Production

It’s hard to quit using fossil fuels because we can transport them all around the world. Particularly oil and coal. They are energy dense and portable. 

That’s why their discovery fueled the industrial revolution and then the modernization of the world. However, as we know now, that came with a cost. 
In response, the U.S. closed 546 coal-fired power plants between 2010 and 2019. By 2018, coal mining companies began to file for bankruptcy. Eight coal miners shut their doors from 2018 to 2019. However, restructuring and exports sent the U.S. coal industry a lifeline, as you can see from the chart below:

The chart shows the Dow Jones U.S. Coal Stocks Index. And you can see that coal companies’ stocks soared from 2020 to 2022. That’s because, as domestic U.S. consumption declined, exports increased. That’s the primary reason coal mining had a resurgence in the U.S. 

The problem is, many countries around the world still use fossil fuels, particularly coal, to generate electric power. And they aren’t wealthy enough to change their infrastructure. 

The chart below from Reuters shows the extent of U.S. coal exports around the world:

Shipping tracking firm Kpler reported that coal exports for power generation topped $5 billion in 2023. U.S. coal exports are at a five-year high today, because of the war in Ukraine.

Europe put strict sanctions on Russian coal exports in August 2022. According to the U.S. Energy Information Administration (EIA), those sanctions drove a 22% increase in U.S. coal shipments to Europe between August 2022 to July 2023. 

In 2021, Europe consumed a third of Russia’s coal exports, which fell to almost none today. They filled the gap, in part, by increasing imports from the U.S. It’s a short-term bump to a declining industry. 

The fact is, that coal represents a much smaller fraction of the U.S. energy supply today than a decade ago. The chart below shows the long-term trend of coal use in the U.S.:

his is the trend we’d like to see reflected in the world. And there is good news on that front. According to Bloomberg, coal use in China – the world’s largest coal consumer – peaked. We should see a massive decline in coal consumption over the next few years.

It’s a slow process, but we are on the right track.

For the good,

The Mangrove Investor Team

Numbers You Need to Know

44,854 TWh

Worldwide Coal consumption in 2022 measured in terawatt-hours. (Our World In Data)

60.78 million tonnes

The North Antelope Rochelle Mine situated in Wyoming, United States is the worlds largest coal mine. It produced an estimated 60.78 million tonnes of coal in 2022 (Mining Technology)

920 Miles

Coal exists in underground formations called “coal seams” or “coal beds.” A coal seam can be as thick as 90 feet and stretch 920 miles. (National Geographic)

What’s New in Sustainable Investing

U.S. SEC waters down its climate reporting rule under legal threats

The sustainable investment industry in the United States has grudgingly endorsed a watered-down regulation on climate disclosure, acknowledging a barrage of lobbying and legal threats that thwarted tougher carbon-reporting requirements. (Corporate Knights)

IBM Commits Up To $45M to Climate Adaptation, Starting With New RFP for Resilient Cities

IBM announced a new request for proposals from government and non-profit organizations for the IBM Sustainability Accelerator, focused on technology-driven projects to advance city resiliency. (IBM)

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