One maxim of business is that market conditions, whether bull or bear, don’t last forever. The problem is, no one knows with certainty when the next economic shift, whether boom or bust, will occur.
So how do company leaders prepare for a future that’s unpredictable? The best answer is to make provisions for any and all foreseeable market conditions. Consider the case of power production and the American bald eagle.
Coal has become a dirty word in the energy sector, and yet at DTE Energy’s Monroe Power Plant, which supplies nearly 40 percent of residential demand for electricity in the region, the surrounding ecosystem is thriving.
One reason is that DTE Energy has invested more than $2.4 billion in recent years to install the best available environmental control technologies. Carbon dioxide from burning coal is still generated and released into the atmosphere, but other emissions — sulfur dioxide, nitrogen oxide, particulate, mercury, and other metals — are mostly captured by the latest control technology and don’t become airborne. Those materials are then safely disposed of or discharged in a manner that meets existing regulations.
So, if the Monroe Power Plant emits little pollution — the facility, completed in 1974, sits on 1,200 acres (800 acres of which is a wildlife preserve) at the edge of Lake Erie — why is it slated to close in 2040? One reason has to do with the plant’s life cycle; the other centers on the pollution generated by transporting coal to the plant via trains and ships.
Every day, on average, two trains, each consisting of 125 railcars loaded with 12,500 tons of coal, arrive at the plant from mines in Montana, Wyoming, and the eastern United States. Some of the western coal is transferred to vessels at DTE Energy’s transshipment facility in Wisconsin before final delivery is completed via a 700-mile journey over the Great Lakes.
Some 150 species of birds, reptiles, mammals, fish, and amphibians roam the land, water, and air in the woodlands, wetlands, and marshes surrounding the plant. According to DTE officials, at the start of the year 78 white-headed sea eagles, or American bald eagles, were living around the plant.
Every winter since DTE began producing electricity at the site, eagles and other birds of prey have made their home within the surrounding ecosystem. The draw is the large number of fish — bass, shad, walleye, catfish, and more — that are attracted to the clean, warm water the utility continually discharges into the surrounding basin.
What happens when the coal plant shuts down? The abundance of fish, and thereby eagles and other birds of prey, will move to other sites farther south during the winter. The lack of warm water will mean about 20 percent of the eagles in Michigan won’t be concentrated in one area during colder months.
The business lesson here is that DTE Energy, rather than waiting, is preparing now to replace the electricity generated by the Monroe Power Plant with renewable sources, meaning solar arrays and wind turbines. The plant itself likely will be decommissioned and torn down, although the utility hasn’t made a final decision.
As for the eagles, they represent what every company must consider: The good times won’t last forever. In business, it’s always best to prepare now for predictable market shifts — or risk waiting until the day when all the fish are gone.
— R.J. King, email@example.com