Canada is a declining market for U.S. coal

Dec 5 - McClatchy-Tribune Regional News - Fred Pace Coal Valley News, Madison, W.Va.

U.S. coal exports to Canada totaled 3.2 million short tons and represented roughly 5 percent of the 66.2 million short tons of total U.S. coal exports during the first half of 2012, according to EIA’s Quarterly Coal Report.

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Exports of U.S. coal to Canada have declined in recent years as Canada has reduced its coal-fired electric generation.

Further, 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 percent 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, the report said.

"In an effort to reduce greenhouse gases, Canadian federal and provincial governments have announced policies to move away from coal-fired generation," the report stated. "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 approximately 88 percent of total coal consumption in 2011, is primarily used for power generation.

In 2011, according to the latest data available, about 16 percent of Canada's electricity was generated using coal, down from 18 percent in 2010.

A shift to lower- or non-emitting fuels may cause further decreases in coal's share of total generation, the report indicated.