Decline of Coal Use: Challenges & Opportunities - Research Paper

Introduction

The popularity of coal and its use has been on the decline around the globe in recent times. This decline in popularity could best be attributed to the change in production technologies and environmental factors as lobbies by environmentalist groups advocating for clean energy. Companies using production traditional models have, over time, realized the advantages of adopting new alternative energy over their existing systems. However, choosing these systems come with multiple challenges especially in companies facing financial difficulties. As such, those companies have to make considerations including tradeoffs to implement such a system to make it work. Computer technology for instance has significantly changed the production techniques and energy use in the 21st century. The study looked at the case of the declining coal industry, analyzing its impacts on the US market.

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Background

The US is one of the largest coal producers in the world. As of 2018, the US was ranked among the five biggest producers, accounting for more than 9% of the global coal production in the world. This figure translates to almost 700 metric tons of coal produced annually around the globe. Of this figure, the net coal exports out of the country are less than 50 metric tons annually (Zhengfu, 2010). A look at the statistics above suggest that the country uses up most of the coal it produces on various different functions. To get a better picture of the uses of coal and its impact on the economy, it is first essential to understand the dynamics surrounding the coal trade. As such, we take a look at some of the most common uses of coal in the US market and what makes the commodity as attractive as it is even in the 21st century.

Coal in the US today is mostly used in the generation of electricity and heat in other industries. The most obvious reason why coal is still being widely used in the production and manufacturing in is that it is easily available. A quick look at the statistics show that the product is locally obtained, without single percentage of all the industry consumption quantity being available. This evidence points at a commodity that is readily available for both extraction and use, providing convenience to the industries that rely on its use. Coal is also one of the cheapest source of energy in the market. Evidence of this fact lies with the comparison of the cost of its use with that of other forms of energy including nuclear, oil and natural gas. Additionally, it is a more stable form of energy when compared to other forms such as hydroelectric power as well as oil, which sometimes cause inconvenience in embargos as well as power outages.

Another reason for its popularity in industries is that old machinery used in some of these industries use no other alternative other than coal. This necessity makes it impossible to completely phase out the use of coal in the manufacturing industry. An example of such application is in the older power plants, where the machinery was designed to specifically use coal as the main source of energy. Even more than its uses, coal production and distribution creates jobs for thousands throughout its processing stages (Osborne, 2013). Thus it attracts a myriad of workers of different economic classes, and who eke out everyday living out of its handling.

Coal, being a fossil fuel also offers an alternative to other energy sources as its handling involves little environmental impact. Responsible mining, burning and disposal of coal would have potentially huge benefits to both as a supplementary source of energy and employment, given the massive electricity consumption requirement of the country. Also, land reclaimed from coal mining offer the owners alternative means of development from space that would otherwise not have been used in a more productive manner. These factors explain the popularity of coal in electricity production today, with its use accounting for more than 50% of the total electricity in the country. Other states such as Kentucky even depend on coal for more than 90% of its electricity needs, resulting in billions of profits for the economy in return (Kavouridis, 2008).

Challenges Facing the Coal Industry Today

As with every other industry, the coal industry has its own fair share of challenges despite the numerous benefits accrued from its exploitation and use. As a result, the recent times have been full of controversy when it comes to coal discussion. The public for instance is divide in its opinion regarding the continued use of coal in the US economy today. While most support its use, an increasing number among the population are of the opinion that its use should be discontinued due to a myriad of reasons.

Top among the posers of the mining and use of coal in the US today are environmental activists, who theorize that its exploitation and use cause more damage to the economy than benefits. The Information Technology field is perhaps one of the most dynamic in the world today. As a result of the continually changing landscape, the area faces a myriad of challenges continuingly, as well as several new improvements that emerge every day. Thanks to the continuously improving technology, access to IT facilities has increased all around the globe, transforming the world into an intricately linked community. The improvements associated with the IT technology make things easier to work with, given the ease of accessibility to information from anywhere in the world. This efficiency, when used productively, could reap enormous benefits for the user, whether individually or as a company (Yuan et al., 2014). However, the efficiency also comes with multiple risks, especially where sensitive information is concerned. As such, individuals and corporations are always urged to use the technology with the utmost care, as we see in the study.

Some of the most common dangers of the ever-evolving Information Technology systems are the vulnerability of data to misuse and targeting by illegal users. The centralization of crucial data in single servers, as is mostly the case in cloud computing, mainly increases the vulnerability and the magnitude of the potential risks resulting from attacks. The chances are further elevated when mitigation measures are not adequately addressed, and in a reasonable time, in a company for instance. Some of the critical factors to look at in the move to adopt the cloud computing applications include the financial aspect of the movement, the environmental factors as well as the security concerns to be expected from such as strategy (Drum, 2013).

The adoption of cloud computing technology just like any peace of improvement in the technology sector comes with a range of challenges as mentioned above. These depend on the reasons a company has for making a transition in the first place. As such, these factors have to be considered at great length by the company before making decisions as to the mode and extent of transition as well as the best strategies possible to set off the process. Mid and huge size companies especially have to consider this step at great length, not only due to the financial aspect of adoption but also due to the need for customization to suit their needs ("Cloud Computing vs. Traditional IT Infrastructure," 2019).

The adoption of cloud computing technologies has, in recent times, become more of a necessity to large and medium-sized companies as opposed to being a mare choice. This is informed by the changing market needs, as well as the efficiency enjoyed from the use of such computing technologies in the organization. However, in considering the adoption of these technological arrangements, several factors have to be regarded as a pre-requisite to determining the viability of such a move. Environmental factors such as the reliance on cloud computing by trading partners and competitors in the market might necessitate the adoption of the technology to keep at par with the market trends. However, financial shortcomings such as in the case of Cloud Peak Energy (TT) make a move difficult due to a myriad of reasons. Research indicates that even with the benefits of such a move being within the organizations' knowledge, it could be difficult when financials are constrained due to the possible risks of failure (Drum, 2013). The problem arises when trade-offs have to be made to cover for the costs of a successful transition, due to the uncertainty regarding the period of profitability. An extended period of unprofitability for the company could force it into overstretching the available resources, thus exposing it to risks of financial downfalls.

Analysis

The TT Company has been experiencing financial distress for the better part of the past decade. As discussed in the text, companies in such a financial situation face enormous difficulties with strategic planning of information technology, at times necessitating tradeoffs to cover for the possible inconsistencies in their constituents. In designing an effective strategy to adopt cloud computing technology with limited risks, it is crucial first to understand the main factors that contributed to the company's current financial situation in detail. For one, the current operating model, though adjusted to accommodate cost reduction, carries a vast unutilized production capacity. The system also allows for workarounds that cause integration severe issues, which are unnecessary in the first place. However, the company finds it hard to change, given the main customers' stand and insistence on using this model. Trading off the main customers with potential market players who would agree to the new SaaS model would potentially open up a new market base for the company's products due to the widespread adoption of the technology all across the globe ("Cloud Computing vs Traditional IT Infrastructure," 2019).

Secondly, the main risks that are likely to be faced in the implementation of a new system would have to be looked at. One of the main dangers involves the loss of contracts from customers resulting in underutilization of the available resources. Besides, the new system might face implementation barriers such as tax and other similar regulations especially in foreign markets, leading to increased costs. However, previous research in similar situation indicate that new markets are more receptive of new technology such as the cloud computing applications, given the extensive popularity, it has attained over time (Yuan et al., 2014).

At the current setting, the company relies on outdated MAC-PAC computer modules as the primary IT systems. These are no longer updatable and require a massive number of staff to maintain. Additionally, the strategy to adopt Move modules failed to kick off, which might explain the company's concerns regarding the shifting of their IT technology to cloud computing systems. The distrust in SaaS vendors further inhibits the TT's interest in adopting the techniques based on what they have heard about sales pitches and pricing. However, trading off their IT staff for an outsourced and updated continuously system could reduce the underutilized production in place of a customizable order. Also, it would afford the company the efficiency required to cut back on time taken to accomplish tasks (Yuan et al., 2014).

Recommendations

While the exploitation and use of coal has been overtaken by technology and time, its use is importance in the manufacturing industry cannot be overstated. As seen above, it use contributes to more than 50% of the total electricity produced and supplied in the US alone. However, the coal industry in the US today is subject to several challenges, especially from activist groups such as environmental protection agencies. This situation has led to a long standoff between supporters and posers of its...