President Obama’s “war on coal” is not really that. The more accurate term is the “war for coal.”
Earlier this month, the Environmental Protection Agency issued rules under the guise of preventing global warming that supposedly will reduce coal-fired electricity in the U.S. by 32 percent. This action is on top of other Obama EPA rules that are already well on their way to shuttering another 20 percent of coal plants.
And those EPA rules have been complimented by a host of other regulatory pain designed to make U.S. coal mining more difficult, including rules to reduce dust levels in mines and rules to designed to limit coal mining under the guise of protecting surface and ground water.
Combined with the ongoing glut of cheap natural gas, all these Obama regulations are pushing electric utilities out of coal and, hence, driving the coal industry out of business.
On the day that the EPA global warming rules were announced, coal giant Alpha Natural Resources filed for bankruptcy. Shares of Peabody Energy, formerly the largest U.S. coal company, traded at $1.16 after peaking at $73.73 in the days when when markets assumed Obama wouldn’t be re-elected.
Arch Coal, formerly the second largest U.S. coal producer, was forced to do a reverse stock split to get its stock price back above $1.00. Arch’s stock had peaked in 2011 at an adjusted-for-reverse-split price of about $340 per share.
Despite owning billions of tons of coal reserves, both Peabody and Arch are perilously close to joining Alpha Natural Resources in bankruptcy, which could wipe out the shareholders.
But what then? The U.S. holds about 480 billion tons of potentially economically recoverable coal. This coal is worth trillions of dollars.
Are we to believe that any nation in its right mind would leave trillions of dollars in the ground for the sake of the dubious claims of global warming hysteria? As coal is actually the fastest growing energy source in the world, even President Obama realizes deep down that unilateral U.S. action to cut carbon dioxide emissions from coal is pointless. Certainly the welfare state cannot be run on fumes. It will require cold hard cash.
So what’s the game?
Although EPA and environmentalists have declared coal to be a dirty fuel, the reality is that coal is a clean fuel when burned in an efficient modern power plant. U.S. air is clean and safe despite all the coal we burn. China’s air pollution problems are not caused by coal burned in power plants. In addition to transportation and industrial related emissions, which are the main problem, many Chinese homes and buildings are heated by inefficient coal bricks in furnaces vented directly into the atmosphere — think Dickensian London.
That coal has been arbitrarily smeared as “dirty” means that it can just as easily be declared “clean” under the right circumstances. What are those circumstances?
My prediction is that, barring a Republican president who stops and reverses Obama’s anti coal jihad, bankrupt coal companies and their assets will be snapped up in bankruptcy by politically-correct and politically-favored Wall Street takeover firms. Unlike current coal industry management, the new coal owners will be Democrat-friendly.
The rest is obvious in an Orwellian way. The new coal industry will flood the coffers of politicians and coal will be magically rehabilitated as a “clean” or at least as a “necessary evil.” The new coal industry will flourish as never before. The crime will have paid off handsomely.
Steve Milloy publishes JunkScience (@JunkScience) and is a former coal industry executive.
Billionaire investor George Soros has opened new equity stakes in Peabody Energy Corp. and Arch Coal Inc., the country’s top two coal producers, according to a Form 13F-HR filed Aug. 14.
Soros acquired more than 1 million shares of Peabody and 553,200 shares of Arch in the second quarter, according to the filing. He reported no other coal holdings in the period.
Soros makes investments through his Soros Fund Management LLC fund. Soros’ holdings may have changed significantly since the end of the second quarter ended June 30.