Coal stocks collapse after election

President Obama's return to office stirs fears among investors, but natural gas is a far greater threat.

By Jason Notte Nov 7, 2012 5:30PM

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."Image: Elevated view of freight cars with coal -- Joseph Sohm-Visions of America/Photodisc/Getty Images

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.

More from Top Stocks

Nov 8, 2012 1:43PM

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.

Nov 7, 2012 7:55PM
Mao would be pleased with the American electorate and the fulfilling of prophesies
Nov 8, 2012 12:17PM

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.

Nov 8, 2012 4:04PM
All I hear is Obama did this Obama did that. First of all the man has only been in office for four years and there is no way a president in one term could create all the havoc that people are accusing him of. People open your eyes and do the study for yorself and stop beleiving everything you hear. Take the time to research things before spouting off just because that's what everybody else is saying. People don't even take the time out to notice the things that has been accomplished for the good under this president, only the things that are negative. why is that?  Can we not as a country together build on the good and work together to fix the bad. Just like we would have to do under any president . If you are set from the beginning (House Republicans) to disrupt, tare down, stagnate, filibuster, etc every agenda good or bad that the President brings up, how then is anything to be accomplished. HMmm?
Nov 8, 2012 4:07PM

How is someone considered African American when their mother was as white as a sheep???
How is someone who attended a Muslim school in Indonesia and who's father and step father were muslim call himself a Christian??
I love how Obama calls himself black and a Christian.  What a joke!!
Nov 8, 2012 5:46PM
Wyoming 04; You're a fool. There are far more rich democrats than republicans. Rich democrats donated to Obama even though he hopes to raise their taxes. The largest donor to Romney could have saved over 100 million a year had Romney been elected. Democrats vote for who's best for the country and republicans on what's best for them. Most democrats pay taxes and we probably pay a larger share of taxes than republicans so we have every right to support programs like food stamps that cost 70 billion a year instead of what republicans want 200 billion a more for their war machine that military leaders don't even believe we need. Your ignorance is overwhelming. You accuse Obama of putting us in debt when the only program he's implemented is Obamacare which is fully funded but are stupid enough to believe Romney's fiscally responsible when he wants to cut revenue 5 trillion and increase military spending 200 billion. Quit drinking the koolaid. There's a reason Romney didn't explain his plan. Because he couldn't.
Nov 8, 2012 4:11PM
Someone please enlighten me on what Obama did good in 4 years??  PLEASE
I can't wait to read this....
Nov 8, 2012 3:57PM
I can't believe this a-hole got re-elected!   Is America really this ignorant.....Oh yes I forgot about 
the Entitlement Issues of the Democrats and Liberals in this country.  Obama is so cool and thats all they know about him.  The Liberals and the media will destroy this country as they cover up all his mistakes.   I'm disgusted!!   Romney 2016
Nov 8, 2012 3:38PM
I predict another great depression during the next four years and you can blame it all on the progressive moverment (Obama and his supporters).
Nov 8, 2012 5:51PM
 Obama turned around losing 800,000 jobs a month to gaining an average 150,000 for 30 straight months. Increased the stock market that collapsed the last time a republican was president from 7900 to 13,000 and saved our auto industry. Democrats are smart enough not to want a Bush 3 who'll destroy the economy again. Yes many of us will pay more in taxes but we accept it. Half of Romneys votes were from self serving idiots that voted for him to save a few hundred or few thousand on their taxes with Romney's 20% buy votes plan the country be damned.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123 rated 1
262 rated 2
480 rated 3
651 rated 4
649 rated 5
629 rated 6
616 rated 7
496 rated 8
346 rated 9
111 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.