Posted: November 7, 2025, 12:31 pm

Coal Country

Last week we highlighted the possibility of the nuclear power plant demise being over as the US was working to take an investment stake in Westinghouse and Cameco. This week, enter coal. Back in September, the DOE had announced up to $625 million to expand and reinvigorate America’s coal industry. Late last week came a further announcement of a Notice of Funding Opportunity (NOFO) earmarking $100 million of the initial announcement to refurbish and modernize existing coal power plants. At the risk of simplifying the request, this funding will be used for design, implementation, and testing of systems that help with wastewater management and retrofits that allow coal plants to fuel switch between natural gas and coal. Sharpen your pencils because applications are due January 7th.

By coincidence, happenstance, or whatever, we just happened across some coal statistics all at once this week. EIA put out its Quarterly Coal Report earlier in the week and it caught our eye that US coal exports so far this year have come off sharply. The main culprit in that number is China accounting for over 70% of the decline, which might be expected given the daily tariff discussions. That lowered export number was split pretty evenly between steam and metallurgical coal. In the world of electricity, we tend to care more about steam coal turning turbines and less about met coal used in making steel.

About the time we were digesting the coal export numbers, the Association of American Railroads released their weekly carload numbers. Interestingly enough, as seen below, carload loadings of coal have been up year over year. As an aside, should these numbers catch the eye for other commodities, the best way to use them is a three week rolling average as the weekly contain possible distortions like railroad maintenance and weather.

So, exports are down, rail loadings are at least flat to up a little, a fair assumption is higher US consumption? According to EIA, that is indeed fact as the electric power sector consumed 15% more coal in the first half of 2025 compared to the first half of last year. The increase is being driven by natural gas as shown below where the increases are highly correlated. As natural gas prices have trended higher, the switch to coal in the generation stack has ensued. EIA included an updated look into 2026. Their early forecasts call for coal consumption to be down 3% on the year as new solar comes online. Should natural gas continue to move higher and stay elevated, we’d expect coal to continue the displacement for now.

There was a time, not all that long ago, in the electricity world where coal rail loadings being flattish and burn higher would have had folks scrambling to dig for stockpile data. Low stockpiles heading into the winter would be enough to have some folks on edge and perhaps some risk premium built into the winter electricity strip. The stock data is a few months old, and perhaps rail loadings have replenished, but it might be worth keeping an eye on the pile. Looking below, we see August came off pretty substantially. There is some seasonality to these numbers and this isn’t totally alarming, but certainly worth thumbing to the coal section when EIA releases their monthly Short Term Energy Outlook next week.

Natural Gas This Week

This week natural gas prices extended a rally started last week. The December Henry Hub contract surpassed $4 and has held firm. Looking at some of the headlines, the reason for the rally is an unseasonal chill heading for the lower 48 next week. Reading a little deeper, and beyond a weather report, the LNG market might be having its say as well. October LNG exports were a record 16.6 bcfd (billion cubic feet per day). As impressive as that is, so far in November, according to Trading Economics, exports have averaged more 17.4 bcfd continuing the impressive trend.

In the past, and no doubt we sound like a broken record, we’ve commented on the fungible nature of LNG allowing US domestic production hitting the world market and subject to world prices. It appears that time is upon us as new export capacity continues to come online. As a reminder, North American export capacity is expected to reach 30 bcf/d by 2029 with a majority of that coming from the US.

By the way, it’s not lost on us that the reference of “broken record” might not have meaning to the younger crowd. Think of the one song, by one artist, on your iPhone that will play on repeat if you let it.

If the LNG story subsides, looking at the two charts below, there is definitely a something’s gotta give moment coming. Storage continues to be near the upper level of the 5-year envelope which doesn’t leave much room for higher prices should withdrawal season not kick in soon and with some bight.

One Man’s Journey

We’ve received a few questions about a series of photos that has started to show up in the WPO…below is the latest. One of our staff here at the WPO has set out on a journey to build a structure. We are pretty sure there is a purpose to it, but we weren’t listening, so it’s either a chicken coop, or a family camp by a pond?

Anyway, so why has the progress of a chicken coop made it’s way on to the WPO? Great question, here at the WPO we realize, as engaging as the week to week ups and downs of the electricity world can be, including anything from ten percent moves in natural gas, AI load, blah blah blah…it might get to be just too much, or too little.

Enter the week to week struggle of one man to build…um, something. This series in the WPO aims to capture true art in the weekly juxtaposition of simultaneously moving forward with progress while at the same time dealing with obvious regression….the artist’s struggle. Going forward, there will be no commentary, instead just a lone nonintrusive picture, allowing the viewer to ponder or interpret the success, dilemma, and struggle. We will continue the picture updates as long as there is interest, or as we suspect, until mid-December when one of the seasonal storms produces a dream ending gust of straight line winds.