Investing in Coal in 2014

“It’s ready!”

That’s what Energy Secretary Ernest Moniz recently told reporters after the DOE announced it would be ponying up $84 million of your tax dollars to help develop projects designed to limit carbon dioxide emissions from coal-fired power plants.

Moniz commented last week during a carbon capture meeting in D.C., saying: “The technology is ready. It is there. Certainly all parts of the technology have been deployed at scale.”

Some GOP members of Congress responded by stating that the technology isn’t ready.

The Republicans are wrong on that, though.

It is ready to be deployed.

The only problem is it’s so expensive, it’ll just end up expediting the demise of coal-fired power generation in the United States — which is what some in Washington really want.

According to a DOE report from July 25, 2013, today’s commercially available carbon capture technologies are projected to increase the cost of electricity by as much as 70% for a new coal-fired power plant. This is neither practical nor fiscally responsible, especially considering the fact that there’s little chance of any significant cost reductions for this technology going forward.

As it is, coal-fired power can barely survive against the rising tide of cheap natural gas and highly stringent environmental regulations… throw in carbon capture technology, and we might as well start delivering the eulogy now.

Yet the U.S. government is hell-bent on investing in carbon capture and sequestration (CCS) in spite of this.

An Inconvenient Truth

Investing in carbon capture technology today would be like investing in a company developing new and improved typewriters back in the early 1990s.

It just doesn’t make any sense…

Especially considering the fact that coal will never be cheaper than natural gas again — which, of course, makes it impossible for coal-fired power to be competitive in the United States.

Even today, without carbon capture integrated across the nation, coal-fired power doesn’t have any shot of significant domestic growth.

Between new environmental regulations and the simple fact that nothing will knock natural gas from its throne for the next few decades, coal-fired power generation is on the endangered species list.

I don’t say this to criticize the coal industry; this is merely an observation of a truth that is very inconvenient for those looking to protect the dinosaurs of the U.S. energy industry.

That being said, coal is not going gently into that good night. As I’ve written before, there is plenty of demand in China and India to keep coal miners busy, both here and abroad.

In fact, I suspect we’re going to see a nice comeback for certain coal stocks in 2014…

Get Excited!

Some of the coal stocks I like in 2014 include:

Arch Coal (NYSE: ACI)
Alpha Natural Resources (NYSE: ANR)
Cloud Peak Energy (NYSE: CLD)

Of course, my exposure to coal remains quite limited. After all, our natural gas plays continue to deliver — and they have no risk of petering out any time soon.

So I’ve got my meat hooks in quite a few domestic oil and gas opportunities right now.

I also remain bullish on a handful of alternative energy and tech plays that offer a much better risk-vs.-reward scenario.

Take robots, for instance…

I’m incredibly excited about the burgeoning medical robot sector.

You may not know this, but the number of medical procedures that were performed by robots in the United States last year reached 450,000. That means more than 1,000 operations are being performed by robots every day.

I’m telling you this is going to be huge… It already is.

But most investors are clueless. They still think robots are the stuff of science fiction movies.

Meanwhile, the smart money’s loading up on robot companies.

Like Bill Gates said, “If you just want to pick one thing, it’s got to be robots.” I couldn’t agree more.

Not only do they represent the future…

They also represent one of your best opportunities to get rich in 2014.

To a new way of life and a new generation of wealth…

Jeff Siegel Signature