Energy
The Decline of Coal in Three Charts
The Decline of Coal in Three Charts
How coal went from hero to zero in just five short years.
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
There was a time in the not so distant past that coal was the unquestioned all-star of the energy mix.
Just over a decade ago, coal-fired power generated more than 50% of U.S. electricity. Coal is cheap and found almost everywhere, but it’s also extremely easy to scale with. If you need more power, just burn more coal.
However, the decline of coal has been swift and unprecedented. That’s why it is expected that by 2020, only 22% of electricity will be generated from the fossil fuel.
What’s Behind the Decline of Coal?
While there is obvious environmental pressure on miners and utilities in the coal business, the number one coal killer is an unlikely source: hydraulic fracturing and horizontal drilling.
These two technologies have led to a natural gas supply boom, making the United States the top natural gas producer in the world. From 2005 to 2010, natural gas mostly traded in a range between $5-10 per mcf. Today, excess supply has brought it to a range between $2-3 per mcf, making it extremely desirable for utilities.
This year, for the first time ever, natural gas has surpassed coal in use for power generation in the United States. The EIA expects natural gas and coal to make up 33% and 32% respectively in the energy mix for 2016.
How the Mighty Have Fallen
Not surprisingly, shrinking demand has led to a collapse in coal prices.
The decrease in revenues have slashed margins, and now equity in some of the biggest coal miners in the world is almost worthless. Similar to some oil and gas companies, many coal miners accumulated major debt loads when prices were high and demand seemed sustainable.
Now major US coal miners such as Peabody Energy and ArchCoal have been obliterated:
2011 | 2014 | 2016 | |
---|---|---|---|
Peabody | $19.7 billion | $7 billion | $0.030 billion |
Arch Coal | $6.0 billion | $1 billion | $0.006 billion |
Alpha Natural | $10.7 billion | $1.6 billion | $0.003 billion |
Walter Energy | $8.2 billion | $1 billion | $0.006 billion |
Total | $44.6 billion | $10.6 billion | $0.045 billion |
The top four miners have lost over $44 billion in market capitalization from their recent peaks in 2011.
That’s an astonishing 99.9% decrease in value, and possibly exemplifies the decline of coal better than anything else.
Energy
The World’s Biggest Oil Producers in 2023
Just three countries accounted for 40% of global oil production last year.
The World’s Biggest Oil Producers in 2023
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Despite efforts to decarbonize the global economy, oil still remains one of the world’s most important resources. It’s also produced by a fairly limited group of countries, which can be a source of economic and political leverage.
This graphic illustrates global crude oil production in 2023, measured in million barrels per day, sourced from the U.S. Energy Information Administration (EIA).
Three Countries Account for 40% of Global Oil Production
In 2023, the United States, Russia, and Saudi Arabia collectively contributed 32.7 million barrels per day to global oil production.
Oil Production 2023 | Million barrels per day |
---|---|
🇺🇸 U.S. | 12.9 |
🇷🇺 Russia | 10.1 |
🇸🇦 Saudi Arabia | 9.7 |
🇨🇦 Canada | 4.6 |
🇮🇶 Iraq | 4.3 |
🇨🇳 China | 4.2 |
🇮🇷 Iran | 3.6 |
🇧🇷 Brazil | 3.4 |
🇦🇪 UAE | 3.4 |
🇰🇼 Kuwait | 2.7 |
🌍 Other | 22.8 |
These three nations have consistently dominated oil production since 1971. The leading position, however, has alternated among them over the past five decades.
In contrast, the combined production of the next three largest producers—Canada, Iraq, and China—reached 13.1 million barrels per day in 2023, just surpassing the production of the United States alone.
In the near term, no country is likely to surpass the record production achieved by the U.S. in 2023, as no other producer has ever reached a daily capacity of 13.0 million barrels. Recently, Saudi Arabia’s state-owned Saudi Aramco scrapped plans to increase production capacity to 13.0 million barrels per day by 2027.
In 2024, analysts forecast that the U.S. will maintain its position as the top oil producer. In fact, according to Macquarie Group, U.S. oil production is expected to achieve a record pace of about 14 million barrels per day by the end of the year.
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