New York — The US Department of Energy said Tuesday it has made $9.5 million available to create new market opportunities for coal through research into making upgraded coal fuel, producing high-value solid products from coal and other advanced material research.

The nearly $10 million in federal funding would go toward cost-shared research and development under a funding opportunity announcement dubbed "Maximizing the Coal Value Chain," according to a statement.

The ultimate goal of creating new market opportunities for coal would be achieved by developing "innovative uses of domestic coal for upgraded coal-based feedstocks used to produce power, make steel, and make high-value products," DOE said. The projects will be managed by the National Energy Technology Laboratory.

The research will focus on small-scale projects of less than three tons per day into technologies that can upgrade "run-of-mine" domestic coal to increase its value for metallurgical and power generation applications, according to the statement. Run-of-mine refers to the raw material extracted during the mining phase.

Another branch of research will focus on producing high-value solid products from domestic coal or closely related by-products including coal fines, coal pitch and coal char, DOE said. Those efforts will involve laboratory testing and continuous process testing of the selected technologies.

Coal tar pitch has traditionally been used to produce carbon products, but the material is a byproduct of coke making and the US capacity for coal tar pitch production has "shrunk dramatically," according to the DOE Office of Fossil Energy website.

"Novel approaches are being researched to directly convert coal to pitches and tailored pitches with optimized properties to produce graphite electrodes and fibers," DOE said. Carbon in the form of graphite is also required in newer technologies like lithium battery anodes, the department said.

SUPPORTING COAL

President Donald Trump was elected on a pro-coal platform and has vowed to end the "war on coal," tweeting in May 2018, "America is blessed with extraordinary energy abundance, including more than 250 years worth of beautiful clean coal. We have ended the war on coal."

According to DOE's Advanced Energy System Program, improving coal's competitiveness "can help the coal power industry address the challenge posed by more stringent environmental regulations." In addition to environmental regulations, coal-fired power plants have been challenged financially in recent years by less expensive natural gas and renewable energy resources, along with weak to flat power demand growth. Coal-fired capacity accounted for approximately 70% of the US power generation capacity retired in 2018, totaling about 11,800 MW, despite efforts by the Trump administration to ease regulations on emissions from coal-fired plants, according to S&P Global Market Intelligence data.

The volume of coal-fired capacity retired in 2018 more than doubled the amount from the prior year, when about 5,000 MW were shut down, MI said. Total US coal consumption has declined 36% since 2007, according to the US Energy Information Administration.

Additionally, the EIA said in its Short-Term Energy Outlook released Tuesday it forecasts that US coal production will total 729 million short tons in 2019, down by 25 million st, or 3%, from 2018. Coal production is expected to further decline by 50 million st, or 7%, in 2020, EIA said.

"This decrease is the result of coal's relatively weak competiveness in the electric power sector compared with natural gas, as well as an assumption of lower demand for U.S. coal exports," the agency said.

-- Jared Anderson, jared.anderson@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com