Coal Industry in Decline

Over the past couple of decades, there has been a dramatic decline in the U.S. coal industry, which was the largest producer of electricity nationwide before 2005.

In a 2022 industry analysis, the U.S. Energy Information Administration (EIA) cited the trend of electricity utilities progressively shutting down coal plants, stating that “due to continued competition from natural gas and renewable resources, 23% of the 200,568 megawatts (MW) of coal-fired capacity currently operating in the United States has reported plans to retire by the end of 2029.”

The decline of America’s coal industry is partly due to the rise of natural gas, wind, and solar energy. It is also partly a result of government efforts, which were ramped up during the Biden administration, to tighten emissions limits on coal plants, many of which have since closed.

Climate activists, while aiming to reduce the use of fossil fuels in general, target the coal industry in particular because coal emits more CO2 and pollutants than oil and gas. According to analytics group Our World in Data, coal accounted for about 15 billion of the 38 billion tons of CO2 emitted worldwide in 2023.

In December 2023, U.S. climate envoy John Kerry told the U.N. COP 28 global warming summit that the Biden administration “will be working to accelerate unabated coal phase-out across the world, building stronger economies and more resilient communities.”

In 2022, President Joe Biden said his administration was focused on shutting down coal plants across the country and making way for wind and solar energy.

The financial sector has also shown antipathy toward the coal industry.

A 2023 report by the Institute for Energy Economics and Financial Analysis found that more than 200 international banks, insurance companies, export credit agencies, and development banks said they would divest from coal. These companies included AIG, Allianz, AXA, Bank of America, Barclays, BlackRock, Citibank, Fidelity, Goldman Sachs, JPMorgan Chase, and UBS.

A report released in 2017 by InfluenceMap, an analytics company, found that more than 500 investment managers, with $1.4 trillion in assets under management, pledged to divest from coal, making coal plants “largely uninvestable.”

Overall, U.S. coal production has declined from 922 million tons in 2012 to 517 million tons in 2024, according to data analytics company CEIC. Thus far, however, the transition to wind and solar energy has not brought down electricity prices.

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