Coal Age

JAN 2013

Coal Age Magazine - For nearly 100 years, Coal Age has been the magazine that readers can trust for guidance and insight on this important industry.

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forecast 2013 continued would run at less than 90%. Again, that figure has not been that high in more than 10 years if ever. So, it's safe to say the coal industry will be entering a period of over capacity. How long that lasts depends on a number of different variables. Coal mining is a capital intensive business. Only 17% reported a capital budget increase for 2012, while 56% said it had decreased. When asked how they would spend the money, they said equipment upgrades (61%), new equip- Coal Age Readers Speak Out Dig in and prepare for the next 4 years Ultimately, Congress can control the reach of the EPA and public opinion affects Congressional elections. The coal industry really needs to take its case to the public. The industry must continue to look for ways to become more and more efficient so that our costs can stay low as compared to natural gas, and renewables. The EPA and its undeniable war on coal are big concerns. Their overzealous and eagerly pursued attempt to remove coal as a power source is sadly popular among the public that blindly follows the fear mongering of the anti-coal campaign. People actually believe that a few windmills will supply us with the power we need. The coal industry needs to counter this campaign with its own offense. Government Regulations (MSHA, EPA, etc.) are strangling this industry. If we continue down this path without concern or respect for the economic consequences or the awareness that there must be an alternative power generation source to replace the lost energy that coal generates, the economy of this country is at great risk of collapse. The public needs to be enlightened as to the effect the administration's assault on the coal industry and the use of coal will ultimately have on people's power bill at the house. They need to be told that, once the symptoms appear, it's too late to cure the disease. The industry must clean up its act on safety and environmental problems. The supply of low cost natural gas will have a profound and lasting effect on the coal producers. The Obama administration's anti-coal stance and the EPA's ever growing regulations are and will continue to make it difficult for the coal industry to do business. I'm not sure how to prepare other than downsize the industry to match demand. It's sickening. 24 www.coalage.com The Obama administration's determination to regulate [the coal industry] out of existence. The coal industry should prepare by trying to keep the public informed on the importance and reliability of coal and how it helps our economy and to put pressure on politicians to challenge the EPA every step of the way. The 2012 US presidential election dealt a severe blow to the coal industry. The industry must fight back and not just accept that which is handed to it. At the same time, it must strive diligently to reduce its cost structure such that it is more competitive than it has been. Natural gas has eroded the coal industry's base but the NG price is not sustainable. The coal industry must be ready to reclaim its market share as the gas price rises. Again, cost control is a necessity. The US coal industry needs to be honest with itself about changes in the market place as well as changes in technology. Owners of coal mines need to be efficient, safe, and realistic. There are some companies that have started to transform themselves into energy companies, diversifying so that they don't have too much risk with only coal operations. This seems right. There will be more consolidation. The market is going to right size itself. Those firms that are not safe, not efficient and not cost effective should be eliminated from the industry. The problem is a lack of creativity. We do no research, we fail to change our mining and processing methods, and we make no technological advances. The Australian model should be considered. Our industry should work as one to fund and direct research and development of means by which we can become more efficient, safer and less damaging to the environment. The world is changing but we continue to mine, process and utilize coal as we have for the last 40 years. Coal is apparently the power source of last resort with a majority of U.S. citizens. The coal industry should prepare for contraction of domestic sales to match coal-fired generation being less than 30% of the source for electrical generation over the next decade. January 2013

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