Coal is down and oil is up according to the latest projections from the U.S. Energy Information Administration (EIA). Coal plants will account for 85 percent of power capacity being retired in the U.S. this year, consistent with a long-term downward trend in coal burning, while U.S. oil output is expected to increase in 2022 and hit a new high in 2023.
Last year, rising prices for natural gas drove greater use of coal, with U.S. consumption rising 14 percent, according to the EIA’s newest Short-Term Energy Outlook. But the agency projects coal use will drop off again in 2022 as natural gas prices decline. Aging coal plants, most of which were built in the 1970s and 1980s, are struggling to compete with cheaper renewables and natural gas, forcing a wave of new retirements.
Six percent of coal power capacity still in operation at the end of 2021 is scheduled to be retired this year, according to the EIA. The William H. Zimmer power plant near Moscow, Ohio will be the largest coal generating station to go offline.
While coal is in decline, oil is making a comeback as the world recovers from the coronavirus pandemic and more cars and trucks take to the roads. The EIA expects oil production will rise in both OPEC countries and in the United States, where crude oil output is projected to reach 11.8 million barrels in 2022 and 12.4 million barrels in 2023, surpassing the previous record high of 12.3 million barrels, set in 2019.
“Producers saw increased cash flow in 2021, having held back on capital investments and cut costs, as crude oil prices rose significantly,” the EIA said in its monthly report. “With financial conditions among operators improved, we expect development to proceed at a modest pace.”