Alpha Natural Resources, Inc (NYSE:ANR) what’s the last recourse?

Posted by Nathan Alexander June 28, 2013 0 Comment 1409 views


Alpha Natural Resources, Inc.(NYSE:ANR) and all other coal stocks careened downward as investors had no option but to accept President Obama’s plan for fighting climate-change. The objective of the plan is pollution reduction from coal-fired power plants and augmenting it with power that has been derived from renewable power sources. The President will be giving the Environmental Protection Agency directives to develop standards that would limit the CO2 emissions from power-plants. In order to reduce emissions, power companies will have to operate their coal plants less frequently and install certain CO2- capturing equipment. There is a possibility that some plants will also have to be shuttered.

The quandary

Most utilities will find that making these changes is far more expensive than simply switching over to renewable power sources such as solar, wind, natural gas and nuclear ones. Though this will definitely be beneficial for the environment, it bodes losses for the coal industry as a whole. It’s no surprise that stocks of ANR as well as other coal companies like Peabody have fallen to multi-year lows.

The dip in natural gas prices has already led to a reduction in the demand for coal from electric utilities in the U.S and resultantly coal shares have been bearing the brunt. Post 2016, there is a distinct possibility that natural gas will turn out to be the 2nd largest electricity source.

What’s Obama’s plan?

President Obama has laid out a detailed plan to reduce greenhouse-gas pollution in the U.S. The aim is to prepare the nation for climatic change impacts and lead international efforts to fight it. The plan recognizes that changes in climate are unequivocal, the primary cause being greenhouse gas pollution from fossil fuel burning. This is also threatening the health of the inhabitants of the country and the economy. The Plan has laid out literally dozens of commitments and actions that will set the country on the path to lead the whole world in an aggressive assault on changes in climate. It outlines steps to opting for clean energy against dirty energy and also avoiding energy waste.

As the world heads into the next century, it will have to make changes that will have a positive impact on the environment. The big question now is, what about the negative impact that it will have on the coal industry?


About Nathan Alexander

Nathan Alexander holds bachelor’s degrees in Journalism and European Studies from Boston University. Nathan reports round up the day’s business and financial market news and include keynote interviews with major business players and updates on Asian, European and US stock markets. He has interviewed heads of leading European banking institutions such as European Central Bank President Jean-Claude Trichet and HSBC Chairman Stephen Green, and CEOs from the business world including Microsoft founder Bill Gates, Virgin Chairman Sir Richard Branson and former Porsche President and CEO Dr Wendelin Wiedeking.

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