U.S. Coal Prices Top $100 a Ton for First Time Since 2008

(Bloomberg) -- U.S. coal prices topped $100 a ton for the first time in 13 years as Russia's war in Ukraine upends international energy markets and an economic rebound from the pandemic drives up demand for fossil fuels.

Prices for coal from Central Appalachia surged 9% to $106.15 a ton last week, the highest since late 2008, according to government data released Monday. Prices in the Illinois Basin rose to $109.55, topping $100 for the first time in records dating to 2005.

The surge matches increases around the world as the Ukraine war prompts users to seek alternatives to Russian coal, which accounted for almost 18% of global exports in 2020. That's exacerbating a surge in demand that began last year as a global economic recovery from pandemic drove up electricity consumption.

“The energy fallout from Russia's invasion of Ukraine could last for a while,” Michelle Bloodworth, chief executive officer of America's Power, a coal-power trade group, said in an interview. “Coal is going to be needed for the foreseeable future.”

While U.S. power producers have been shifting away from coal, consumption actually climbed last year as prices also increased for natural gas. More costly fossil fuels come as U.S. consumers already face the highest inflation in four decades. Americans are paying higher utility bills, food prices are surging and housing costs are up.

Prices in Central Appalachia and the Illinois basin are rising more than in other U.S. coal-producing regions because they have easier access to international markets. U.S. exports climbed 23% last year and are expected to increase another 3.3% this year as miners take advantage of record international prices.

Also See: Earth Is on Track to Warm to Twice Paris Accord's Target Level

The rebound in coal comes as a United Nations-backed panel of climate scientists warned Monday that the world may be on track to warm at a pace that would painfully remake societies and life on the planet.