32. -,
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:
Capital-intensive
To respond ,
Uncertainty ,
Externalities
Costs ,
Competency
utilities pi
drive .
Law
Loan
To hamper ,
To encourage
To assure
US Coal Industry Today
.New competition ftpm international Purees and more strict enviriinrr\fentarre!giimtil)hsJare the reasons the coal industry is a major restructuring. This competition means that cost increases
'
cannot7 * passed through automatically. Jt means pressure on utilities to reduce power costs. It njeans umo^Se^^ompanies^ust become more capital-intensiye to reduce' latxmrcosts" that aVe out of control. It means pushing1 cost reductions through the entire supply chain: from power generation, to coal transportation, to coal production. This pressure of competition started in the early 1980s a^nd has affected all aspects of the supply chain.
It'snouftf be noted that there are four fundamental reasons for the restructuring and consolidation of the coal industry. The first is theneed t^'reauc^.coets^ £pinbmmg companies can creaip greater, efficiency by moving ^ificjaj J>arries and eliminating* duplication". The market-plac^ iielnancfs lower1 costs. Technological aSfvakcres enable the industry to achieve lower costs.
The second reaspn for restmctyjri.ng^is the^n^ed for higher capitalization fo respond to changing consump'tion patterns, -r,i( .,,,,
The ^ird. reaspn for restructuring the coal industry is the uncertainty" surrounding the^coal and electricity generating industries. The^ep uncertainties encompass global climate change and externalities. But they also include expectations' on electricity demand'grbwiifi and natural gas price trends.
The fourth reason is the recognition that industries must focus on their core competencies torremain c6nip^e'tillve. ' ^^ r kp^ Soothe request for lower costs, ^changed co'n'sumptio^/pafterns', uncertainty in future 'reg^ilatldri and the return to core competencies are the^riying factors ! the ^gomg iriSustry restructuruig. The drive efficiency is of utmost importance.
The US coal industry is no longer an 'island'. It clihip'etes with coal internationally and competes with other fuels, such as natural gas.
The drive to improve ^fficiency within the coal and electricity-
generating industries has been slowed by government actions,and
organizations that have other perspectives. For example, inefficient
unproductive mines remain' in the coal industry if the owners of
these mines reicogiiize that they cannot 6survive in a competitive
environment. They, try to ipde behind government protection, such
as subsidized Ip^cpst (loans/ >,, j - k; ^ ,.,
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<t! Union lead^s inast ian work rales, established in a previous era, that now hamper' productivity 4provements.
Thus, inefficient producers, labour leaders and government regulators have become the fficfton' that can stop forward progress until natural competitive forces overcome, the friction andjemstate progress.
Unit 10 257
| i concen]| of US..energy policy isnQ longer tp :, s'tafele' Supply o'f'ejftergy but raftieV to iciiieVe |
, The principal assure a low-cost^
the objective of limiting greenhouse gas~ emissfo'ns rtgarless of
cost. SO2 emissions will come4Sown' ovbrtlme as older plants are
repowered.
The nation's current national energy policy discourages the use of coal for electricity generation Vftffle encouraging the use of other
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energy sources, such as natural gas. - '
33. )
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) ,
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