The U.S. coal sector is seeing little hope of improvement in the next few years, after a long list of bankruptcies, power plant closures, layoffs and other troubles marred the industry's timeline over the last decade, writes Taylor Kuykendall, of S&P Global Intelligence.

Federal records show U.S. coal producers mined 1.09 billion tons of coal in 2010, a figure the U.S. Energy Information Administration expects to drop by more than one-third to 697 million tons in 2019. Given that the energy sector typically makes decisions on decadeslong timelines, the drop in coal production was dramatic as utilities migrated en masse to natural gas generation and, increasingly, renewable energy sources.

Seaport Global Securities LLC analyst Mark Levin wrote Dec. 3 that through the end of September, U.S. utility coal demand was annualizing to just 559 million tons, compared to 637 million tons of demand in 2018. If that plays out, U.S. utility coal demand would fall 12%, the highest annual decline since 2015 when it declined 13%.

"I think a decade ago, a lot of people would have had a hard time seeing [the shift away from coal] happening so quickly, even though the forces causing that were well underway a decade ago," said Robert Godby, an economist at the University of Wyoming.

Lazard Ltd. recently estimated that the mean levelized cost of energy for crystalline solar and wind generation in the U.S. in 2019 was about $40/MWh and $41/MWh, respectively. That compares to about $56/MWh for gas and $109/MWh for coal.

"During the Obama administration, older and smaller plants made up the bulk of the coal retirements," said Hannah Kolus, a research analyst with Rhodium Group LLC's energy and climate team. "But today larger and younger plants are more and more vulnerable. These coal plants are facing increasing economic pressure from cheap, natural gas and the decreasing cost of renewables like solar and wind."

The beginning of the decade saw much of the U.S. economy still recovering from the 2008 recession. Initially, the economy's turnaround drove a 4.5% increase in coal production in 2010.

Peabody Energy Corp., the largest coal miner based in the U.S., was hopeful in 2010 about long-term prospects for coal primarily due to an expected boom in Chinese demand. The company repeatedly touted a coming "supercycle" for coal demand. However, it was just a few years away from a bankruptcy reorganization driven by reduced coal demand, weakened export opportunities and significant debt accumulated to expand into global metallurgical coal markets.

"I believe we are in the early stages of a long-term supercycle for coal. And Peabody, with its unmatched asset base, market positions and growth projects, is uniquely positioned to capitalize on this sustained trend," Gregory Boyce, then chairman and CEO of Peabody, said in June 2010.

Peabody boasted a market capitalization of $17.29 billion in 2010, falling to $949.6 million as of Dec. 16.

Coal generation supplied about 45% of the nation's power in 2010. The U.S. Energy Information Administration's latest short-term energy outlook estimated coal's share of U.S. electricity generation nearly halving since the beginning of the decade, ending 2019 at an average of 25% and falling to 22% in 2020.

Coal companies, however, were not alone in their belief that the fuel would continue to dominate the domestic energy landscape. In 2012, for example, the EIA projected that coal's share of the U.S. generation mix would drop to 39%, but not until 2035.

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