The Environment Protection Agency 's New Clean Power Plan

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Introduction Consol Energy is heavily involved in two major industries: coal and natural gas. This is an interesting situation given that the two industries directly compete against one another. As a result, Consol is diversified and strategically projected against the risk of downturn in either profit stream. Coal Industry The coal industry has a gloomy economic forecast going forward. The U.S. Environment Protection Agency’s new Clean Power Plan (a part of the Clean Air Act) causes much uncertainty for corporations like Consol. It was proposed by the EPA in June of 2014. The goal of the Clean Power Plan is to decrease CO2 emissions by 30 percent in the year 2030 from 2005 levels. Already, it has had an impact on the internal…show more content…
Prices for coal are currently down. This drop has coincided with the drop in oil prices. Originally, it was expected that these two prices would be tied together, and that the drop would be quite temporary. However, the longer that coal has been down, the more likely it looks like it is down for the count so to speak. Many analysts believe that there has been an over-production of coal in the past decade and the market has been saturated as a result. With every passing month that coal’s prices stay low, and the supplies keep growing, it becomes less likely that things will turn around for the better in a permanent manner. Even with the rest of the world playing catchup with the transition to zero carbon-intensive energy sources, the U.S. coal exports have been extremely low. China, for instance, has imported less in recent years. At one point, they were helping to drive our export market. In response to the lower demand, many mining corporations have begun to optimize their operations. This has been done by focusing on lower mining production costs, cheaper transportation costs, and favorable exchange rates. The goal is to keep operations from further declining profit-wise as the U.S. Energy Information Administration expects a 7% decrease in total coal consumption for the year 2015. This decline in coal consumption will likely cause a decline in coal production, causing a decline in jobs for states such as Wyoming, West Virginia, Kentucky, Illinois, and
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