Coal stocks collapse after election
President Obama's return to office stirs fears among investors, but natural gas is a far greater threat.
Well, coal, at least Mitt Romney likes you.
Unfortunately, he fell about 70 electoral votes and more than 2 million popular votes shy of taking the nation's highest office on Tuesday night, so coal investors had themselves a cry about it on Wednesday. Shares of Arch Coal (ACI), Alpha Natural Resources (ANR), Peabody Energy (BTU), James River Coal (JRCC), Consol Energy (CNX) and Walter Energy (WLT) all fell Wednesday as the man whom Romney painted as the enemy of the coal industry was elected to a second term.
During the first presidential debate on Oct. 3, candidate Romney took a shot at President Barack Obama's energy policy, saying it didn't focus enough on the "clean burning coal" that received so much attention during the 2008 campaign.
"I like coal," Romney said to the president at the time. "People in the coal industry feel like it's getting crushed by your policies."
It became a plank of Romney's platform: the "war on coal." Op-ed columns blasted the president for it. Republican Senate candidates in Pennsylvania, Virginia and Ohio made it a key element of their campaigns.
Like Romney, "war on coal" candidates Tom Smith in Pennsylvania, Josh Mandel in Ohio and George Allen in Virginia all spent election night scratching out concession speeches. Did that make the "war on coal" they were trying to prevent any less of a reality? Only if you believed it was being waged in the first place.
Unquestionably, coal's share of electricity production in the U.S. has dropped precipitously in recent years. The Energy Information Administration notes that the percentage of U.S. electricity fueled by coal fell to 36% in the first quarter of 2012 from 44.6% in the first quarter of 2011. Annually, the EIA forecasts that coal's share of electricity production that hovered between 48% and 50% from 2004 to 2008 will drop to 37.3% for 2012.
Coal's biggest enemy in this "war" wasn't Obama, though, but cheap natural gas. The fracking extraction technology that opened up states like Ohio and Pennsylvania to natural gas production has also cut the price of natural gas nearly in half since 2010. As a result, natural gas went from fueling only 18% of all America's electricity in 2004 to nearly 31% this year.
All isn't lost for coal, though. The EIA predicts that as energy companies suck up more natural gas for electricity production, natural gas prices could increase by nearly a third in 2013. They predict that hike will not only reduce natural gas demand, but will bring some companies back to coal and raise its share of the electricity market to 40%.
Run screaming from coal all you'd like, politically minded investors. It's competing resources in mining states that have it under siege, not some president with a pickaxe to grind.
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Obama should have never been re-elected. I am from Wyoming, home of many coal plants. This man, whom I will never refer to as my loyal leader, is crushing our way of living and how we put food on the table. Not only is he going to create more job loss over America and here in the coal industry but he will send us spiraling into another Great Depression. Congratulations America, you have once again made a fool of us because you want free money, no hard work included and because you believe a playing the race card is going to make us successful. BS. We look ridiculous and those who voted for him will feel the same when the end of this 4 years comes and we are in dept, despair and depression.
The power industry reduced mercury emiissions by 2/3's in the last 20 years. Obama's EPA then required then to be cut in half from these already low levels and the EPA has admitted there will be no known health benefit from this.
Odd, isn't it, that after 40 years of the Clean Air Act and huge reductions in mercury emissions we have all these new cases of asthma in children.
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