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Coal plummets to 1978 levels as renewables climb

Lucas Mearian | April 5, 2017
U.S. renewable energy production increased 7% in 2016.

power station field

A dramatic, double-digit decrease in coal production led to an overall 4% drop in U.S. primary energy creation in 2016, according to a new report.

This marked the first annual decline in U.S. energy production since 2009, according to the report from the U.S. Energy Information Administration.

The decline in production coincided with an increase in both total energy imports and exports. U.S. fossil fuel production fell 7% from 2015 to 2016, with coal dropping 18% -- to its lowest point since 1978.

U.S. energy production

After ten consecutive years of decline, net U.S. energy imports grew by 6% from 2015 to 2016, outpacing the increase in gross energy exports that rose 7% during the same period, the EIA's report showed. Most of the fuel import increase came from additional crude oil, which rose 7% as low gasoline prices led to an increase in demand.

The EIA attributed the decline in coal demand to relatively low natural gas prices, especially in the first half of 2016, and relatively flat electricity demand. Petroleum and natural gas production also declined, falling 5% and 2%, respectively, as prices for both fuels were below their respective 2015 levels. For the first time on record, gross U.S. exports of natural gas from the exceeded those of coal in energy-equivalent terms. EIA projects that the U.S. will become a net exporter of natural gas on an annual basis by 2018, as domestic production continues to grow and additional natural gas export capacity, particularly to Mexico, comes online.

U.S. energy production coal

Meanwhile, after a slight decline in 2015, U.S. renewable energy production increased 7% in 2016. Wind energy made up almost half the increase in renewable production, while solar energy accounted for nearly a quarter. Both renewable energy sources saw substantial electricity generating capacity additions in 2015 and 2016, the EIA stated.

Hydroelectricity also accounted for almost a quarter of the increase in renewable energy production, largely because of easing drought conditions in the West Coast states, where most of the U.S. hydroelectric capacity is located.

On a percentage basis, renewable energy grows the fastest compared with any other energy source because capital costs fall with increased penetration and because current state and federal policies encourage its use, according to the EIA.

The renewable energy industry has also been leading in job creation. One out of every 50 new U.S. jobs last year came from the solar industry, with growth in that industry outpacing the overall U.S. economy by 17 times, according to a recent report.


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