Finally President Obama has come right out and said it — coal has got to go.
For all of its history, at best a necessary evil, the coal industry was been poisoning the planet, killing mountains and streams, enslaving whole regions of people in West Virginia, Kentucky, Ohio, Pennsylvania and now in the Powder River Basin in Wyoming and Montana, and with a wanton disregard for mine safety and health, even killing its own employees.
Even now in the waning years of coal-powered electrical generation, the financial calculations of the damage to public health by the industry exceed the market cap of many of the coal companies themselves.
With the advancement of renewable clean energy technologies in wind and solar and thermal (and probably in the end in safer nuclear), it is time for clean renewable energy to take over the future.
The President’s announced plan, as the New York Times has just now editorialized with President Obama’s Tough, Achievable Climate Plan, continues the trend that has been going on now for some time as fracking for cleaner natural gas, as well as environmental regulations, have taken a devastating toll on the coal companies stocks. It is getting to the point now that the industry’s constant blat that coal is cheaper (even if it kills you) is not going to play anymore against the better cleaner sources of energy.
These last couple of years, companies like Peabody Energy (BTU) and Cloud Peak Energy (CLD) have made a desperate attempt to advance coal exports to China and India by proposing to build shipping terminals on the West Coast but they have been met by a solid wall of environmentalist saying no way and those efforts seem doomed (although the companies are still burning maybe the last of their cash to try to overcome their fierce opposition). And on a visit to China not so long ago, President Obama reached an agreement with the Chinese to curb coal imports there.
It’s getting so coal finally has no where to turn.
And the stocks show it (see the panel below). These stocks not only have little to no chance for investment growth, they are in fact risks to all shareholder equity as more and more of them, like Patriot Coal and James River Coal and Walter Energy, go bankrupt.
The time has come it appears to wave goodbye to the coal boys and breathe easier all over the world.
(Click on chart for a larger image)