Coal stockpiles grow to highest level in at least 25 years

Stockpiles of coal are growing to historically high levels at the nation’s power plants.

The U.S. Energy Information Administration reported Monday 197 million tons of coal were being stored at the end of 2015, the highest year-end level in at least 25 years.

Government analysts attributed the spike to both a decline in coal demand due to an unseasonably warm winter and a larger economic shift away from coal as a power source.

Cheap natural gas and steady growth in wind and solar farms have driven down the price of electricity in many U.S. wholesale markets. And with increasing environmental regulation on power plant emissions, many electricity companies have pulled back on coal-fired generation.

The amount of coal capacity on the U.S. power grid fell 10 percent between 2010 and 2015. according to EIA.

The shift has caused uncertainty around the future of U.S. coal mining, a critical industry in states including Wyoming, West Virginia and Kentucky. Texas produced roughly 44 million tons of coal in 2014, about 11 percent of Wyoming.

Peabody Energy, the largest private sector coal producer in the world, has seen its stock price drop to less than $3 a share – from more than $95 a year ago – and is now the subject of speculation whether it will file for bankruptcy.

The demand problem is evident in the government’s coal supply data. In December, a time when coal stockpiles typically decrease by 3 million tons, the U.S. saw coal reserves grow 8 million tons.

The decline had a ripple effect on the railroad industry. Over the last four months of 2015, an average of 94,000 railroad cars were loaded with coal each week. That was more than 20 percent below average, according to EIA.

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