This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Coal Is First Casualty of Energy Abundance

NEW YORK (TheStreet) -- Increase efficiency, increase renewable energy production, increase production of oil and natural gas, and something has to get squeezed out, right?

That something is coal.

Over the last few years coal has been losing its U.S. power plant customers, and now export markets are weakening, creating what Michael Forbes of Marketintellegencer calls a "downward spiral."

BHP Billiton (BHP), the Australian company that is the only industry player to be opening new mines, is down 20% so far this year, and the company's Web site is now emphasizing work on oil and sustainability.

Mining.Com, quoting the Associated Press, says that Jim Justice, a coal billionaire ranked 292 on the Forbes 400, is having trouble paying his bills and says he now calls the coal business "terrible."

The industry has seen this coming from a long way away, and has been doing all it could to prevent it. Producers have been advertising the idea of "clean coal" since 1921, the framing shifting with the times.

In the 1970s the ads focused on foreign oil producers, in the 1980s they fought acid rain regulation, and over the last decade they've claimed coal has in fact been "cleaned."

Coal also competes in Washington. A report in the Motley Fool estimates the industry's lobbying budget at $17 million a year.

But it hasn't worked. Patriot Coal has declared bankruptcy. Of the other industry players only Consol Energy (CNX), which also produces natural gas, is near break-even.

The rest -- Alpha Natural Resources (ANR), Arch Coal (ACI), and Peabody Energy (BTU) -- are all down at least 35% year to date.

There are ways to reduce coal's carbon cost, by turning it into a slurry, as Wikipedia explains, and Pakistan is among the markets trying this, writes PakObserver. But that just reduces the carbon cost, it doesn't get rid of it.

For that, you'll want to go to Kemper County, Miss., where Southern Co. (SO) has put $4.3 billion, some of that government money, into turning low-grade coal into gas and selling the carbon dioxide to oil drillers for use in fracking.

The plant is due to be completed next May, but the head of the unit building the plant has just retired, amid cost concerns, The Atlanta Business Chronicle reports, quoting The Wall Street Journal.

This has industry advocates like Larry Bell, writing for Forbes, livid and unintentionally funny.

He's upset that the Administration went along with the Kemper experiment, noting that it makes coal uncompetitive, but eventually he gets back on track by attacking the science of climate change.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,046.30 +67.17 0.40%
S&P 500 1,990.73 +4.22 0.21%
NASDAQ 4,523.0880 -3.3940 -0.08%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs