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.