U.S. Energy Information Administration Independent Statistics & Analysis Outlook for coal and electricity for National Coal Council November 1, 2013 | Washington, DC by Howard Gruenspecht, Deputy Administrator

Coal accounted for 20% of the domestic energy supplied in 2011; almost all of it was used to generate electricity Howard Gruenspecht, National Coal Council November 1, Source: EIA, Annual Energy Review 2011

In 2012, U.S. electricity generation was 69% fossil fuels, 19% nuclear, and 12% renewables Howard Gruenspecht, National Coal Council November 1, Source: EIA, Electric Power Monthly, February 2013 Nuclear 19.0% Natural gas 30.4% January – December 2012 net generation: 4,054 billion kWh Coal 37.4% January – December 2012 non-hydro renewable net generation: 219 billion kWh Geothermal: 0.4% Other biomass: 0.5% Wood and wood- derived fuels: 0.9% Other renewable 5.4% Conventional hydroelectric 6.8% Wind: 3.5% Solar thermal and PV: 0.1% Petroleum 0.6% Other gases 0.3%

Spot natural gas prices vary significantly across global markets since global spot natural gas, crude oil, and LNG prices U.S. dollars per million British thermal unit Source: Derived from Bloomberg, L.P. Howard Gruenspecht, National Coal Council November 1,

U.S. electricity output from natural gas and coal 5 gigawatthours Source: EIA, Electric Power Monthly Howard Gruenspecht, National Coal Council November 1, 2013

Growth in electricity use slows, but still increases by 28% from 2012 to 2040 Howard Gruenspecht, National Coal Council November 1, U.S. electricity use percent growth (3-year rolling average) Source: EIA, Annual Energy Outlook 2013 structural change in economy - higher prices - standards - improved efficiency Projections History 2011 Period Annual Growth 1950s s s s s

$2.00 $1.94 $1.65 $1.96 $1.67 $1.79 $ $1.74 $2.58 $2.77 $4.07 $3.99 $3.41 $2.10 $2.39 $3.16 $3.76 $2.39 $3.18 N/A The average delivered price of coal to electricity generators varies widely across U.S. regions – transport costs are a key reason Howard Gruenspecht, National Coal Council November 1, delivered coal prices, $ per million Btu Source: EIA, Annual Energy Outlook 2013 National AverageMinimumMaximum $2.38$1.65$4.07

Howard Gruenspecht, National Coal Council November 1, The fuel mix for electricity generation varies widely across U.S. regions (2011) Source: EIA, Annual Energy Outlook 2013, based on Form EIA-923 National AverageMinimumMaximum Coal 42%0%80% Natural Gas 25%2%87% Nuclear 19%0%41% Renewables 13%1%65% Oil / Other 1%0%5% Share of Generation by Fuel, 2011

Coal regains some competitive advantage relative to natural gas over time on a national average basis 9 ratio of natural gas price to steam coal price Source: EIA, Annual Energy Outlook 2013 History Projections dollars per Btu HistoryProjections2011 competitive parity energy prices to the electric power sector coal natural gas Howard Gruenspecht, National Coal Council November 1, 2013

The U.S. electricity mix in EIA’s reference case gradually shifts to lower-carbon options, led by growth in gas and renewable generation Howard Gruenspecht, National Coal Council November 1, U.S. electricity net generation trillion kilowatthours Source: EIA, Annual Energy Outlook % 19% 42% 13% 1% Nuclear Oil and other liquids Natural gas Coal Renewables 2011 Projections History 17% 16% 35% 30% 1% % 13% 19% 11% 4%

Howard Gruenspecht, National Coal Council November 1, The projected fuel mix for electricity generation by region (2040) Source: EIA, Annual Energy Outlook 2013 National AverageMinimumMaximum Coal 35%0%69% Natural Gas 30%2%81% Nuclear 17%0%36% Renewables 16%1%53% Oil / Other 1%0%2% Share of Generation by Fuel, 2040

With lower natural gas prices in the High Oil and Gas Resource Case, coal is permanently displaced as the leading generation source in the near future Howard Gruenspecht, National Coal Council November 1, electricity net generation billion kilowatthours Source: EIA, Annual Energy Outlook 2013 Coal Natural gas Projections 2011

Coal generation in alternative electricity sector CO 2 fee cases 13 billion kilowatthours Source: EIA, Annual Energy Outlook 2013 HistoryProjections2011 Howard Gruenspecht, National Coal Council November 1, 2013 Reference $10 fee at 5% $10 fee at 7.5% $20 fee $30 fee

Projected electricity generation shares of different fuels are sensitive to fuel prices and policy developments 14 percent Source: EIA, Annual Energy Outlook 2013 Howard Gruenspecht, National Coal Council November 1, 2013 renewables nuclear natural gas coal Higher / Lower Electricity Demand Higher / Lower Coal Prices Higher / Lower Natural Gas Prices GHG Cases

U.S. coal production is very sensitive to both markets and policies 15 million short tons GHG15 High Oil and Gas Resource High Coal Cost Low Oil and Gas Resource Reference Low Coal Cost Source: EIA, Annual Energy Outlook 2013 Howard Gruenspecht, National Coal Council November 1,

Total U.S. natural gas production, consumption, and net imports in the Reference case, Howard Gruenspecht, National Coal Council November 1, natural gas supply and consumption trillion cubic feet Source: EIA, Annual Energy Outlook 2013 Net exports, 2040 (12%) Total consumption Total production Net imports Projections History 2011 Net imports, 2011 (8%)

U.S. continues to be a net exporter of coal 17 million short tons Source: EIA, Annual Energy Outlook 2013 Howard Gruenspecht, National Coal Council November 1, 2013 Projections History 2011 Consumption Domestic Supply Net imports

Renewable energy and nuclear power are the fastest growing sources of energy to 2040, but fossil fuels continue as the dominant fuels 18 world energy consumption by fuel quadrillion Btu Source: EIA, International Energy Outlook 2013 HistoryProjections % 28% 22% 11% 5% 28% 27% 23% 7% 15% share of world total Howard Gruenspecht, National Coal Council November 1, 2013

For more information 19 U.S. Energy Information Administration home page | Annual Energy Outlook | Short-Term Energy Outlook | International Energy Outlook | Today In Energy | Monthly Energy Review | Annual Energy Review | State Energy Portal | Howard Gruenspecht, National Coal Council November 1, 2013

20 The “crossover point” for least-cost dispatch of coal and natural gas capacity depends on both fuel prices and the carbon value. At lower natural gas prices, the “crossover” occurs at a lower carbon value. Environmental operating costs and retrofit costs for pollution controls at existing coal-fired plants can “raise the bar” for their continued operation. –For retrofit decisions, the unit’s perceived “useful life,” which plays a critical role, can be affected by views regarding future climate policies Operating costs: existing plants with and without a value on carbon coal at $3 natural gas CC at $7 natural gas CC at $3 natural gas CC at $ dollars per megawatthour Fuel cost for existing coal and combined cycle natural gas units with a value placed on carbon dioxide emissions coal at $2