The Clean Air Act Amendments of 1990 -An Eastern Coal Producers View

With the advent of acid rain legislation included within the Clean Air Act Amendments of 1990, a great deal of uncertainty with regard to price, source and production quantities has been cast into the coal market. Powder River Basin and other western coals continue a rapidly accelerating migration eastward, South American coals move into the northern markets, states propose legislation to assist utilities in complying with the new regulations in hopes of maintaining their own coal industries, while some utilities question the long term availability of eastern compliance coal. Any major coal producer must make decisions now to assure their continuing presence in the market place; several companies have adopted a strategy to acquire eastern compliance reserves while others have invested in technology to compete as a low cost producer. This paper discusses some of these options in light of the uncertainties of the market place, from an eastern coal producer?s viewpoint.