US Coal Production Declines Amid High Inventories and Natural Gas Competition

The US coal industry is experiencing a decline in production, with domestic coal prices continuing to fall modestly during August. The primary reason for this decrease is the high inventories of coal, which are more than offsetting summer power demand.

Elevated domestic coal inventories and competitive natural gas have led to lower aggregate production this year compared to 2025. Specifically, Powder River Basin coal shows large declines in production.

In the long term, S&P Global Market Indicative Power Forecast now projects 44.4 GW of coal plant retirements by 2035. This is an increase of 8.3 GW from prior forecasts as natural gas generation adds competitive pressure.