A Wakeup Call for Coal

Deck: 

U.S. imports make up the fastest-growing segment of the industry. Are we prepared?

Fortnightly Magazine - December 2006
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We are headed for a time of excitement and turmoil in the coal industry unlike anything seen before. The renewed interest in coal as a fuel source for power generation will increase coal demand by up to 4 percent a year for the next 20 years.

But the fastest growing segment of the U.S. coal business has been coal imports from outside the United States. Imports have been increasing to levels never before seen or forecast. With so much coal produced domestically in this country, why are utilities choosing to import coal from producers located hundreds or thousands of miles from their plants?

The U.S. coal industry had been under-investing in production and transportation capacity when coal prices were flat and interest in cleaner fuels grew in the 1990s and early 2000s. Now, many coal-industry players will be challenged as never before to catch up or risk being overtaken by bigger, better financed, and more nimble global-scale players. This challenge also opens the door to opportunities for investors seeking to gain competitive advantage in a consolidating coal industry.

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