Is This the End for Coal?
In late 2008 and early 2009, many coal manufacturers’ shares took sharp dives, likely as investors saw Obama’s environmental stance in opposition to coal. James River Coal Company (NASDAQ:JRCC), Peabody Energy Corp. (NYSE:BTU), Alpha Natural Resources (NYSE:ANR), and Arch Coal (NYSE:ACI) were among those to take the dive. With the exception of James River Coal, all of these companies’ shares were down Wednesday morning, with Arch Coal dropping over 8 percent.
Things may continue to get worse for coal, as Obama is expected to push harder emission standards on new power plants that could effectively stop the construction of any new coal-fired plants.
In addition, competition from other power sources could put the final hurting on the industry. As coal use fell between 2005 and 2012, natural gas use grew from 19 percent to 30 percent of the country’s electricity generation.
Even solar may be able to trump coal, as First Solar (NASDAQ:FSLR) recently purchased a solar project in New Mexico and could soon be offering electricity at half the price per kilowatt-hour that coal plants offer, on average. A typical new coal plant could be expected to charge $0.128 per kilowatt-hour, but First Solar will be offering energy at a rate of $0.0579 per kilowatt-hour in an agreement with one electrical company.