Environmental Impact of Coal
- In the United States, coal is the third largest primary energy source, accounting for 18 percent of all energy consumed in 2012 with the electric power sector accounting for 91 percent of U.S. coal consumption.
- Coal is still a major source of energy for U.S. electricity generation, but its role is declining in favor of natural gas and other energy sources due to low natural gas prices, state renewable energy standards and environmental regulations.
- With the highest carbon content of all the fossil fuels, carbon dioxide emissions from coal combustion represented 24.5 percent of total U.S. greenhouse gas emissions in 2012.
- Globally, coal is one of the most widely distributed energy resources with recoverable reserves in nearly 70 countries. The U.S., China, and India are the top producers and consumers of coal. Worldwide, coal supplies 29.7 percent of energy use and is responsible for 44 percent of global CO2 emissions.
- Most of the coal produced is consumed in the country in which it was mined. International trade accounts for only 16 percent of coal consumption worldwide; this share is expected to increase to 17 percent over the next 25 years.
- Compared to natural gas, the price of coal for electric power plants in the United States has remained relatively stable since the 1980s and expected to remain so over the next 25 years.
- Under potential climate policies, the development and success of low-emission technologies such as carbon capture and storage or other pollution control devices will be key in order to reduce the impact of continued to coal use.
In 2012, 91 percent of coal consumed in the U.S. was used for 37 percent of total U.S. electric power generation. The remaining 8 percent was consumed for industrial purposes, including steel and cement manufacturing. Worldwide, electric power generation was also the largest consumer of coal. In 2011, the electricity sector consumed 62 percent, while global industrial coal consumption was approximately 33 percent. The remaining 5 percent was used in the commercial and residential sectors.
Coal is a brownish to black sedimentary rock; it is formed under high temperature and pressure from plants and other organic matter that lived millions of years ago through a geologic process known as coalification. There are four main types of coal, classified according to the amount of available heat energy. The amount of carbon, hydrogen, and oxygen in the coal are the main factors that determine the amount of heat released during combustion. The carbon content determines the amount of CO2 emissions from each type of coal.
Table 1: Types of Coal and its Uses
Location of Deposits
% US Production (2010)
Black and brittle with a glassy appearance; usually the oldest type; sometimes called “hard coal”
Electric power, some space heating, industrial uses
Nearly 15,000 BTUs per pound
Softer than anthracite and sometimes called “soft coal”; low moisture content; 100 to 300 million years old
Most common type used for electric power, production of coke for steel industry
10,500- 14,500 BTUs per pound
East of the Mississippi; WV, KY and PA are top producers
Harder and darker than lignite; dates back at least 100 million years; lower sulfur content than bituminous coal
Electric power, industrial uses
8,300-13,000 BTUs per pound
West of the Mississippi; Wyoming is the top producer
Soft, crumbly and light-colored; relatively young; high moisture and ash content
Electric power, production of synthetic gas and liquids
4,000- 8,300 BTUs per pound
Mainly in Texas and North Dakota
Source: U.S. Energy Information Agency, “Coal Explained,” 2012
Bituminous coal is the most abundant type of coal in the United States and it is divided into two sub-types, according to end use. The first, steam or thermal coal, is used mainly for electricity generation, while the second, coking or metallurgical coal, is used in steel production. As a general rule, bituminous coal with its higher heat content coal is more desirable for electric power generation. Sub-bituminous coal from Wyoming’s Powder River Basin has a much lower sulfur content, which makes it an attractive fuel option because of regulatory limits on sulfur dioxide emissions.
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Depending on the geology of the coal formation, there are two main methods of extracting coal, surface and underground. Surface mining is used when coal is deposited less than 200 feet below the surface, while underground mines are suitable for coal formations several hundred feet below the earth. The recovery ratio of a coal deposit can be more than 90 percent for surface mines, while less than 40 percent for underground mines.
After the coal is mined, it is sent to a preparation plant for minimal processing and then transported to end-users through rail, barge, and/or truck. In the United States, rail is the primary mode of transportation for long-haul shipments of coal. Nearly all the coal mined in Wyoming, for instance, is sent via rail directly to power plants in the eastern United States. Trucks are used mainly for short hauls from mines to nearby electricity and industrial plants.
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Environmental Impact of Coal
A large number of environmental problems are associated with the production and combustion of coal. One significant impact is acid mine drainage, where acidic run-off is formed through a chemical reaction between water and sulfur-bearing rocks. This run-off contaminates creeks and rivers, and, because it diffuses easily, can be difficult to contain. Another significant impact is the practice of mountaintop mining. As the tops of mountains are removed to reveal coal seams, the sediment and waste becomes valley fill, impacting water quality and resulting in the loss of headwater ecosystems, or the species and environmental processes that are native to river sources. The U.S. Environmental Protection Agency uses the best-available science and incorporates feedback from the public and key stakeholders to provide guidance to protect water quality and people’s health regarding abandoned mines and mountaintop removal mining, among other things.
In terms of greenhouse gases, mining can result in the direct release of methane (which has a global warming potential 23 times higher than CO2, but only persists in the atmosphere for 12 – 17 years), particularly from underground mines. In 2012, methane emissions from U.S. coal mining were 0.9 percent of overall U.S. greenhouse gas emissions. The EPA estimates that coal mine methane contributes 8 – 10 percent of human-made methane emissions worldwide.
Table 2: Global Methane Emissions from Coal Mining
Surface mining %
Underground mining %
20 (NSW 59)
Source: U.S. Environmental Protection Agency, 2005
Carbon dioxide emissions from coal combustion for electric power and industry were responsible for 24.5 percent of total U.S. greenhouse gas emissions in 2012. Moreover, combustion emits common air pollutants, such as sulfur dioxide, nitrogen oxides, particulate matter, and mercury as well as other heavy metals. These air pollutants have adverse effects on both public health and the environment. Consequently, many but not all coal plants use a variety of technologies, such as scrubbers, to reduce most of the pollutants from combustion emissions. Some governments and companies are developing carbon capture and storage technologies that will capture, transport and store CO2 emissions underground. For more information, see Climate Techbook: Carbon Capture and Storage.
Additionally, coal combustion residuals, commonly referred to as coal ash, contain a broad range of metals, including arsenic, selenium and cadmium; however, the EPA considers the amounts of chemicals leached from these residuals to be non-hazardous. Coal combustion residuals are one of the largest waste streams generated in the United States, and must be managed to prevent environmental impacts such as the Kingston, Tennessee spill in 2008. Finally, considerable water usage for coal-fired power generation can stress aquifers and watersheds, and in many instances, water must be cooled to near ambient levels before being returned to the surroundings to protect ecosystems.
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The U.S. Energy Information Administration estimated global coal reserves at 980 billion short tons in 2011. At current consumption rates, these reserves are expected to last 113 years. The BP Statistical Review of World Energy gives similar numbers for global reserves.
Figure 1: McKelvy Diagram for Coal or Gas Resources
Source: McKelvy, V.E. 1972. “Mineral Resource Estimates and Public Policy.” American Scientist 60 (1): 32-40
Although coal deposits are distributed throughout the world, they are concentrated in the United States, Russia, China, and Australia.
Figure 2: Recoverable Coal Reserves by Country
Source: U.S. Energy Information Administration, “International Energy Statistics: Coal,” 2011
For the United States, estimated recoverable reserves were 257 billion short tons as of January 1, 2013. Of this, recoverable reserves at producing mines were 18.7 billion tons; this reflects the working inventory at producing (active) mines.
Figure 3: Coal-Bearing Areas in the United States
Source: Energy Information Administration, 2014.
Domestic coal reserves are concentrated in several regions of the country. The majority of the estimated reserves are bituminous (53.1 percent), mainly found east of the Mississippi River. The next most common, sub-bituminous (36.6 percent) is found primary west of the Mississippi. Lignite deposits, which account for 8.8 percent of estimated reserves, are found in Montana, Texas, and North Dakota. Anthracite reserves are only about 1.5 percent and are concentrated in northeastern Pennsylvania.
In 2012, world coal production was 8,695 million short tons. China, the United States, and India are the top three coal producers. Since 1985, China has surpassed the United States in annual coal production. In 2012, China produced 4,025 million short tons of coal, nearly 4 times the amount of coal produced in the United States.
Since 1990, domestic coal production has ranged from a low of 945 million short tons in 1993 to a high of 1,171 million short tons in 2008. Coal production in 2012 has fallen around 13 percent from its 2008 peak. The recent lower trend obscures the fact that in some areas of the country, production has gone down even as it has gone up in other regions. In the Interior and Western regions, production increased, while production in the Appalachian Region continued to decrease, remaining at a near 50-year low. The top five coal producing states are:
- Wyoming (39 percent of U.S. total) is part of the Western region, producing 89 percent of the total amount of sub-bituminous coal in the United States.
- West Virginia (12 percent of U.S. total) is in the Appalachian region and produces only bituminous coal.
- Kentucky (9 percent) is split into two regions, both of which produce only bituminous coal.
- Pennsylvania (5 percent) is in the Appalachian region and the country's only producer of anthracite.
- Montana (5 percent) is in the Western region and produces only sub-bituminous coal.
There were approximately 1,229 mines in operation in the United States in 2012. The majority of these mines (60 percent) were surface mines and responsible for 66 percent of domestic coal production in 2012. Surface mining is much more prevalent in the western United States, where about 90 percent of the coal is extracted from surface mines.
Approximately 8,449 million short tons of coal were used worldwide in 2012. Three quarters of the world's coal is consumed by the top five users – China, United States, India, Germany, and Russia. As a region, Asia uses almost two thirds of global coal supplies. Coal usage accounts for approximately 29 percent of world energy consumption. Industrial consumers are responsible for about 33 percent of coal consumption worldwide, while the electricity sector uses about 62 percent.
In 2012, total coal consumption in the United States was 889.2 million short tons, which represented a decrease of approximately 21 percent from 2007. The electric power sector is the main driver of domestic coal consumption. Coal use (figure 5) has been declining due to a number of factors. First, the recession, which began in late 2007, reduced overall economic activity and the demand for coal in the electricity and industrial sector fell. In 2009, the economy began to grow again, albeit slowly. During this period, very low natural gas prices (which are expected to continue until at least the end of this decade), coupled with under-utilized generating capacity at efficient combined cycle power plants, made natural gas an economic fuel choice for baseload power in the U.S. electric power sector. That further eroded demand for coal. At the same time, EPA rules affecting coal plant emissions are coming into force, contributing to coal plant retirements. Finally, state energy portfolio standards have increased the quantity of available renewable power sources; wind now makes up approximately 4 percent of the annual electric generation mix in the U.S.
Figure 4. Recent Trend in U.S. Coal Consumption, 1990 – 2012
Source: U.S. Energy Information Administration, 2013
Figure 5. U.S. Coal Consumption, 1949 – 2013
Source: U.S. Energy Information Administration, 2014
Over the next 25 years, the EIA predicts that China will make up more than half of the world coal consumption. Increased use of coal in develpoping economies, including China, accounts for all of the projected growth in coal use until 2040, continuing a trend that began in the early 2000s (figure 6). Total coal production in developing economies of 176.8 quadrillion Btu in 2040 is expected to be more than four times higher than total coal production in developed nations.
Figure 6: Global Coal Consumption and Forecast, 1980-2040
Source: U.S. Energy Information Administration, “International Energy Outlook: Coal,” 2013
Over the next 25 years, the EIA forecasts that coal use in the United States will increase 0.3 percent annually, from 2012 to 2040. Projected growth is due to increases in domestic coal consumption for use in power plants and for the production of synthetic fuels. However, the portion of electricity from coal-fired generation is predicted drop from 37 to 32 percent, due to increases in electricity generation from natural gas and renewables. Note that total electricity generation is forecast to increase 0.8 percent annually, from 2012 to 2040.
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Most coal is consumed in the country in which it was mined, with only about 15 percent of total overall coal consumption traded internationally in 2011. Coal trade is differentiated by the type of coal, either steam coal (used in power plants) or coking coal (used in industrial production). Historically, trade in steam coal has increased at an average rate of 7 percent per year over the past 20 years, and for coking coal, about 2 percent annually. U.S. coal exports, chiefly Central Appalachian coal, made up 9 percent of the global export market in 2012, up from 6.9 percent in 2010.
Table 3. Top Six Exporting and Importing Countries in 2012 (Million Short Tons)
|Russia||150.7||10.7%|| ||South Korea||135.7||10.1%|
|United States||126.7||9.0%|| ||India||97.2||7.2%|
|South Africa||82.0||5.8%|| ||Germany||53.4||4.0%|
|World||1413.9|| || ||World||1342.5|| |
Source: U.S. Energy Information Administration, International Energy Data, 2014
Because transportation costs are a large share of the total coal price, international trade in coal is split into two main regions: the Atlantic, made up of Western Europe, and the Pacific, composed of importing countries in Asia, which accounts for the majority of world coal trade. These markets overlap when prices are high, with South Africa as a point of convergence between the two.
Figure 7: Inter-regional Coal Trade Flows (Metric Tons)
Source: World Coal Institute, The Coal Resource: A Comprehensive Overview of Coal, 2009
Indonesia is the world's largest exporter of steam coal, while Australia is the largest exporter of coking coal; most of their coal goes to Asia. Under forecast consumption rates, international coal trade is predicted to grow at an average annual rate of 1.4 percent over the next 25 years. Because the largest increases in consumption are forecast to occur in India and China, which meet most of the increase in their coal demand with domestic supply rather than imports, the share of coal trade as a percentage of global coal consumption grows modestly to 17 percent in 2035. Australia and Indonesia are expected to continue as the leading suppliers of coal over the next 25 years, while Asia is forecast to remain the largest importer of coal.
In its International Energy Outlook 2013, the EIA projects that total annual U.S. coal exports will rise from about 83 million short tons in 2010 to 169 million short tons in 2040 (from around 8 percent to 14 percent of U.S. annual production levels), buoyed by the increase in Asian and European coal demand. Because U.S. coal export facilities are located primarily in the east, the United States is currently at a distinct geographic disadvantage relative to Australia and Indonesia. Higher transportation costs associated with shipping coal from the eastern United States to Asian markets historically has meant that U.S. coal exports cannot compete economically in that region.
With strong growth in world coal trade, favorable international prices, and declining demand for coal in the U.S. electric power sector, there has been renewed activity and investment in port capacity expansion projects to facilitate the growth of U.S. coal exports.Some projects, particularly along the coastlines of Washington and Oregon face considerable local and environmental challenges. However, a number of projects on the U.S. Gulf coast are moving ahead and will add approximately 50 million tons of additional export capacity between 2012 and 2015.
The domestic price of coal is a function of supply and demand, coal type, and mining method used. Generally, lignite is the least expensive, and anthracite the most expensive. Surface-mined coal is usually lower in price than underground-mined.
Figure 8: U.S. Regional Coal Spot Prices
Source: Federal Energy Regulatory Commission, Market Oversight, 2013.
Transportation can be a significant portion of the delivered coal price. In 2010, transportation costs on average accounted for approximately 38 percent of the total delivered price to power plants in the United States. Compared to natural gas, the price of coal for electric power plants in the United States has remained relatively stable since the 1980s (with the notable exception of 2008, when many commodities spiked simultaneously).
Over the next 25 years, the average real minemouth price of domestic coal is expected to increase by 1.4 percent per year, from $1.98/MMBtu in 2012 to $2.96/MMBtu in 2040. In comparison, natural gas prices are expected to increase by approximately 3.7 percent per year.
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Because of its high-energy content, low cost per unit of energy, and abundant worldwide reserves, coal is the least-cost energy source for both developed and developing countries. Estimated worldwide reserves, if consumed at forecast consumption levels, are expected to last 120 years. Although supplies of coal are substantial, other factors may limit its use as an energy source.
In the United States, proposed and upcoming regulations by the EPA, as well as any future action on greenhouse gas emissions, will impact coal power plants and future coal markets. For example, in July 2011, the U.S. EPA issued guidance on water quality standards from surface coal mining in the Appalachian Region. Additionally, in February 2012 the agency published the mercury and air toxic standard rule, which is designed to reduce the emissions of harmful heavy metals as well as sulfur dioxide and fine particle pollution from power plants. Many electric generating units are already compliant with these rules; however, existing sources will have up to four years if they need it to comply. Also, the EPA in July 2011 issued the Cross-State Air Pollution Rule, which sets new standards for controls on power plants that cause much of the oxides from nitrogen and sulfur dioxide (which react and become ozone and fine particulate matter) that travel downwind and across state lines. Utilities have already announced the retirement of older, inefficient and infrequently used coal power plants in response to these rules. Additionally, in March 2012 the EPA released new performance standards for new electric power plants under the Clean Air Act. Under the proposed standard, all new power plants would need to match the greenhouse gas emissions performance currently achieved by highly efficient natural gas combined cycle power plants, that is, emit less than 1,100 pounds of CO2 per megawatt/hour. If implemented, this rule would effectively bar any new coal power plant from being built in the U.S. unless it implemented carbon capture and storage technology; even emissions from a state-of-the-art, integrated gasification combined cycle coal power plant are in excess of 1,600 pounds of CO2 per megawatt/hour.
Worldwide, coal use accounted for 44.3 percent of energy-related CO2 emissions in 2011. Reducing these emissions, in the context of increasing use in growing economies, will be a challenge. Development of low-carbon technologies and complementary government policies to drive the deployment of these technologies will be key factors enabling the use of coal in the future.
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