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38 | ZZZFHGPDJFRP | Construction Equipment Distribution | June 2014 Sector Check For the past few years, the shale oil and gas boom has dominated the headlines and presented oppor- tunities for dealers around the U.S. But for dealers reliant on the coal mining business, the environment has been considerably more challenging. You can't talk about coal without bringing up power. According to the U.S. Energy Information Administration (EIA) 80 percent of coal mined in the U.S. in 2012 was used in power generation. The Environmental Protection Agency (EPA) has issued several rules that will increase costs for coal-fired power plants. The Mercury and Air Toxics Standards (MATS) require significant reductions of mercury emissions, acid gases and toxic metals by 2015. Coal plants will have to install flue gas desulfurization equipment or dry sorbent-injection systems – or be retired. In January 2013, the EPA published a rule to limit carbon dioxide (CO2) emissions from new power plants. The regula- tion mandates that all future power plants can emit just 1,100 pounds of carbon dioxide per megawatt-hour. While modern natural gas plants meet this standard, new coal- fired plants would be unable to meet the standard without applying carbon capture and storage (CCS), a costly tech- nology that is being commercially demonstrated in power plants for the first time this year. While the CO2 regulation faces legal challenges and opposition from the utility and coal mining industries, the number of power plants convert- ing from coal to natural gas or building new natural gas power plants is on the rise. EPA regulations for existing coal-fired plants are expected to be published this month. At the end of 2012 there were 1,308 coal-fired gener- ating units in the U.S., totaling 310 gigawatts (GW) of capacity. In 2012 alone, 10.2 GW of coal-fired capacity was retired, representing 3.2 percent of the 2011 total. The Annual Energy Outlook 2014 projects that a total of 60 GW of capacity will retire by 2020, which includes the retire- ments that have already been reported to the U.S. Energy Information Administration The Impact on Dealers With locations in Kentucky and Indiana, Brandeis Machin- ery & Supply Co. serves coal mining operations in two of the nation's three major coal-producing regions; the Illinois Coal Basin and Appalachia. "The coal mining sector just quit two years ago," said Michael Brennan, executive vice president and COO of Bramco, the parent company of Brandeis. "Operators are not investing and are trying to reduce costs as much as possible." According to Brennan, Appalachian coal, which is more costly to produce, has lost market share in recent years to natural gas, as well as Illinois Basin coal and Powder River Basin coal from states such as Wyoming (the nation's leader in coal production). As for utilities switching from coal to natural gas, Brennan believes, "It happened a lot faster than everyone thought." Richard Oates, vice president of mining for CAT dealer Wyoming Machinery Company says that while capital The Future of Coal in a 'Fuel Du Jour' World Stricter emissions regulations and natural gas development challenge coal mining operations. BY JOANNE COSTIN FRQWLQXHGRQSDJH