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Week 2 Case Analysis Article Review

In: Business and Management

Submitted By Nattiquam
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Complex Market Forces are challenging Appalachian Coal Mining

Complex Market Forces are challenging Appalachian Coal Mining Article summary This paper describes how environmental forces affect the coal mining industry and plays an important role in our life. We will learn that environmental forces brings threats, uncertainty and opportunities to marketers and consumers . Although this paper focus on the coal mining industry, I believe that the main points focus on the environmental forces that marketer and consumers face every day. Appalachia’s coal communities were confronted by a confluence of market factors that developed over a period of years; resulting in numerous market factors, including low domestic and international prices for both thermal and metallurgical coal, soft natural gas prices, and increased imports—primarily from Colombia all contributing to the dwindling fortunes of coal mines in Appalachia.

Low prices of natural gas combined with the air-quality benefits that come with burning gas rather than coal for electricity, have eroded coal’s position as the go-to energy source for power generation. Natural gas powered plants is now on the increase and it is projected that natural gas-fired plants will account for 73 percent of capacity additions through 2040, compared with just 1 percent for coal.

Appalachian coal is more expensive than coal from other parts of the United States. The high cost of Appalachian is supplanted by lower-cost coal from other regions like Powder River Basin in Montana and Wyoming which can extract more than 10 times as much coal per employee hour as coal companies operating in the Appalachian Basin.

The advent of effective scrubbers, now allow electric utilities companies to burn higher-sulfur coals with lower delivered costs purchased from their regions instead of Appalachian; thus making...

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