As Baltimore is the second-largest hub for coal exports, energy officials said the collapse of the Francis Scott Key Bridge could have a greater impact on foreign deliveries than expected.
The cargo ship Dali struck a support pillar on the Key bridge last month, causing the portion of the bridge over the Patapsco River in the Baltimore metropolitan area to collapse in a matter of seconds. The incident left six people dead and disrupted activity at one of the busiest ports on the Eastern seaboard.
Industrial Info is tracking more than 190 operational plants in the Baltimore area, including 39 facilities with active and planned projects, and nine more facilities planned or under construction.
The Port of Baltimore is the second-largest hub for coal exports in the country, accounting for 28% of total U.S. coal exports in 2023, data from the Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, show.
Because of the port impacts, the EIA in its short-term market report reduced its forecast for U.S. coal exports by 33% for April and by 20% for May, compared with the prior month’s forecast.
“We expect U.S. coal exports to recover toward the end of the summer or early fall, but there is significant uncertainty based on the timeline for the port reopening and how quickly exporters can adjust to export through alternative ports,” said EIA Administrator Joe DeCarolis.
The EIA noted that in three of the past five years, annual coal exports from the Port of Baltimore totaled around 20 million short tons, before surging to 28 million short tons in 2023 to cater to the growing demand in Asia.
It is expected that cargo from Baltimore will be diverted to bigger ports along the East Coast, including the Port of Virginia, which is the largest coal-export hub in the United States. While disruptions could extend into the fall, the EIA in its April market report said it did not expect the bridge collapse to have a long-term impact on U.S. coal exports.
While disruptive, the impact on the domestic coal market may be minimal given the evolution of the energy transition. With the increase of renewable energy resources on the grid, the EIA expects coal’s share in the electric power sector will decline by 8% relative to year-ago levels and another 5% in 2025.
As exports drop and electric power consumption declines, meanwhile, the EIA said total coal production would be 5% lower in April and 4% lower in May, compared to the forecast from March.
Further incentivizing the drawdown on coal is cheap natural gas prices. The EIA expects Henry Hub, the U.S. benchmark for the price of natural gas, to average $2.15 per million British thermal units (mmBtu) this year, compared to $2.45 for coal.
If the forecast is accurate, that would be the first time that natural gas is cheaper than coal since 2001. The overall shift, meanwhile, should contribute to a decline in emissions of carbon dioxide (CO2).
The EIA expects coal-related CO2 emissions will decline as coal-generated electricity makes way for increases in solar power.
“Natural gas and petroleum-related CO2 emissions both increase by about 1%; slight increases in the electric power sector’s natural gas consumption are partly offset by decreased consumption in the industrial sector, and petroleum product consumption rises slightly,” the EIA’s report read. “CO2 emissions are expected to decrease by an additional 1% in 2025 driven by slight decreases in total consumption of coal, natural gas and petroleum products.”
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