Issue link: https://read.dmtmag.com/i/330408
Sector Check 40 | ZZZFHGPDJFRP | Construction Equipment Distribution | June 2014 investment has slowed since 2012, mining customers in the Power River Basin are making investments in technology to further lower their costs. "We have seen customers buy larger machinery, includ- ing up to 400-ton capacity trucks, so they become more efficient," said Oates. "Technology is playing a larger role with adoption of telematics and dispatching systems." Wyoming mining companies are also looking at liquefied natural gas as a fuel source for their equipment. Despite the difficult conditions, Oates remains positive about the long-term future of coal, which represents about 60 percent of their business. Caterpillar's purchase of Bucyrus has expanded the company's offering to include under- ground mining equipment, draglines, shovels, drills and large hydraulic excavators. "Coal can handle the peak loads as well as the standard load of demand on the grid, and that is important for America," said Oates. "Wyoming coal, we believe, is a safe bet because our success as Americans is based on producing low-cost energy." According to Oates, Wyoming coal is low in ash (less than 4 percent), low in sulfur (less than 2 percent) and low in sodium. Since stricter emissions regulations have taken effect, it is less expensive for power plants to burn Wyoming coal than it is to install scrubbers at their plants. In 2013, Wyoming produced 40 percent of all U.S. coal. Two years ago, Rish Equipment Company, a Komatsu dealer headquartered in Charleston, W.V., relied on the coal mining industry for 80 percent of its revenues. Today, less than 5 percent of new machines sold are placed in mines. Mining customers have shrunk operations, sold off equipment, parked equipment and cannibalized it for parts, forcing the dealership to diversify into oil and gas and construction. "We had to reinvent ourselves," said Buddy McGlothlin, vice president of sales. "We picked up new lines and added personnel in those markets." In other words, they found a way to prosper. Nevertheless, McGlothlin believes there is still a future with coal. But it's one that is going to be different than the past, and still evolving. He believes there will be strong demand for coal globally, and for metallurgi- cal coal when the steel market rebounds. "I've been in the industry 35 years and the industry has exceeded every challenge," said McGlothlin. "Coal is readily available, cheaper and could be cleaner than other sources if we would invest money in clean coal technology." Reliability Is a Growing Concern The Polar Vortex that much of the U.S. experienced this past winter may have served as a wake-up call to recognize the importance of coal in serving our energy needs. Coal-fired electricity generation is still the largest component of overall electricity generation, representing 37 percent of total generation in 2012. Coal and natural gas prices are key factors in the decision to retire a power plant, along with environmental regulations and the demand for electricity. Similarly, the price of coal and natural gas impact current usage. In February this year, there was a signifi- cant year-over-year decrease in electricity generation from natural gas and simultane- ous rise in coal usage, as natural gas prices rose and the price of coal declined. "In the last winter, 90 percent of the coal capacity was up and running to meet the power demands in January and Febru- ary," said Janet Gellici, CAE executive vice president and chief operating officer of the ´7KH)XWXUHRI&RDOLQD¶)XHO'X-RXU· :RUOGµFRQWLQXHGIURPSDJH