EIA tracks falling coal exports to increasingly coal-averse Canada

Exports of U.S. coal to Canada have declined in recent years as Canada has reduced its coal-fired electric generation, said the U.S. Energy Information Administration in a Nov. 29 version of its periodic “Today in Energy” feature.

A key factor in that development, not mentioned by EIA, is that Ontario Power Generation has been gradually phasing out its coal-fired capacity, under a provincial greenhouse gas policy, with a goal of ending all coal-fired generation by the end of 2014.

U.S. coal exports to Canada totaled 3.2 million tons and represented roughly 5% of the 66.2 million tons of total U.S. coal exports during the first half of 2012, according to EIA’s Quarterly Coal Report. Coal exports to Canada as a share of U.S. total coal exports are expected to reach a record low later this year. The share of U.S. coal exports destined for Canada averaged 41% between 2002 and 2006. This percentage has declined annually since 2007, according to annual U.S. coal exports data.

“The decline is largely the result of Canadian initiatives to reduce coal-fired electric generation,” EIA noted. “In an effort to reduce greenhouse gases, Canadian federal and provincial governments have announced policies to move away from coal-fired generation. Beginning July 1, 2015, the Canadian federal government plans to enforce a strict performance standard for all coal-fired units. The addition of the new regulations will likely encourage utilities to retire aged coal-fired generators and shift to lower- or non-emitting fuels (i.e., natural gas and renewable energy).”

Steam coal demand in Canada, which accounted for about 88% of total coal consumption in 2011, is primarily used for power generation. In 2011, according to the latest data available, about 16% of Canada’s electricity was generated using coal, down from 18% in 2010, EIA noted. A shift to lower- or non-emitting fuels may cause further decreases in coal’s share of total generation, it added.

Notable is that Canada, particularly out of British Columbia and the nearby province of Alberta, is a major producer and exporter of metallurgical coal. There has been a lot of new mine development activity there in recent years to meet new Pacific Rim demand over the long term, though slumping demand right now has put something of a damper on some of those projects.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.