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competition with natural gas generation and the implementation of MATS, also reduced coal-fired generation capacity, but the full effect will not be evident until 2016, according to the EIA. Coal con- sumption for electrical power is expected to remain at 2015 levels, a little more than 750 million tons, for 2016 and 2017. Coal stocks remain relatively high, at 176 million tons in October. October inventories averaged 155 million tons during the previous 10 years, according to the EIA. A similar trend is visible in internation- al markets. Slowing growth in world coal demand and low coal prices have also had an impact on U.S. coal exports. Lower transportation costs and a strong dollar will not help U.S. exports over the next few years. The EIA estimates U.S. coal exports decreased 20 million tons (21%) from 2014 levels to 77 million tons in 2015. The EIA is forecasting an additional 9 million tons (12%) decline in 2016 and a further 2 mil- lion (4%) decline in 2017. In its Short Term Energy Outlook, the EIA said U.S. coal production will contin- ue to decline over the next two years. Production is expected to fall to 852 mil- lion tons in 2016 (4%) in 2016 and 843 million tons (1%) in 2017. Interior region production, which accounted for only 13% of coal produc- tion 10 years ago (2006), is projected to account for 20% of production in 2016 and 2017. This increase in share reflects the region's growing competitive advan- tages compared to the other coal-pro- ducing regions. These factors include a higher calorific value for the coal, prox- imity to the power plants, and lower min- ing costs. Appalachia, which accounted for 34% of production 10 years ago, is projected to decline to 24% in 2016 and 2017. The Western region's share, which was 53% 10 years ago, will increase to 56% in 2016 and 2017. The U.S. economy is powered by elec- tricity, and electrical demand will only increase significantly when America experiences a true economic recovery and the manufacturing sector begins to grow again. In the meantime, power pro- ducers hold the cards with excess capaci- ty and they will choose the least expensive fuel that meets their need. f o r e c a s t 2 0 1 6 c o n t i n u e d January 2016 www.coalage.com 21 Figure 9 — Survey Demographics F igure 8 — U.S. Net Electricity Generation from Coal and Natural Gas by Region, July 2014 and July 2015 ( billion kilowatt hours)