Last updateTue, 22 Jan 2019 8pm


U.S. Coal Consumption the Lowest in 39 Years

The U.S. Energy Information Administration (EIA) expects total U.S. coal consumption in 2018 to fall to 691 million short tons (MMst), a 4% decline from 2017 and the lowest level since 1979. U.S. coal consumption has been falling since its peak in 2007, and EIA forecasts that 2018 coal consumption will be 437 MMst (44%) lower than 2007 levels, mainly driven by declines in coal use in the electric power sector.

The electric power sector is the nation’s largest consumer of coal, accounting for 93% of total U.S. coal consumption between 2007 and 2018. The decline in coal consumption since 2007 is the result of both the retirements of coal-fired power plants and the decreases in the capacity factors, or utilization, of coal plants as increased competition from natural gas and renewable sources have reduced coal’s market share. 

U.S. Shale Producers to Slow 2019 Spending

“U.S. shale producers are slamming the brakes on next year's drilling with crude prices off 40% and mounting fears of oversupply, paring budgets that in some cases were set only weeks earlier,” according to Oil and Gas Investor.

The reversal is alarming because blistering growth in shale fields has propelled U.S. crude output 16% to about 10.9 million barrels per day (bbl/d) for 2018, above Saudi Arabia and Russia. Production has been expected to rise 11% more in 2019 as large oil firms and independents added wells this year.” 

Shale Work Up in U.S. Despite Oil Prices

“Oil producers again boosted U.S. drilling this week despite the biggest quarterly drop in oil prices since 2014,” Bloomberg reports.

“Still, drilling activity may be poised to slow as producers including Diamondback Energy Inc. and Parsley Energy Inc. scale back spending in response to the lowest crude prices in more than a year.” 

New Downstream Project Announcements Up 43%

According to the Hydrocarbon Processing Construction Boxscore Database, more than 320 new downstream capital projects have been announced over the past year. This total represents a 43% increase in new project announcements year over year. Since September 2017, new project announcements have averaged nearly 25/mos. Most of these new projects (80%) are within the gas processing/LNG and petrochemical industries.

With more than 110 projects, the Asia-Pacific region continues to lead in new project announcements. The U.S. follows the Asia-Pacific region with a 26% market share in new project announcements. Both the gas processing/LNG and petrochemical industries in the U.S. have benefitted greatly from domestic shale gas production, which has created a boom in the development of new natural gas gathering and processing capacity, infrastructure buildouts, LNG export capacity and a renaissance in the country’s petrochemical sector. 

Fracked Wells Account for Most New Oil & Natural Gas Wells

In 2016, hydraulically fractured horizontal wells accounted for 69% of all oil and natural gas wells drilled in the U.S. and 83% of the total linear footage drilled. The combination of horizontal drilling and hydraulic fracturing has increased the rate of recent U.S. crude oil, lease condensate, and natural gas production.

Hydraulically fractured horizontal wells became the predominant method of new U.S. crude oil and natural gas development in October 2011, when total footage (in linear feet) surpassed all other drilling and completion techniques. The combination of horizontal drilling and hydraulically fracturing has contributed to increases in crude oil and natural gas production in the U.S, which are both expected to reach record levels in 2018. 

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