Obama Coal Stocks

Coal-haters came out swinging last week after President Obama reminded the nation that he’s got nothing to lose by pushing a new climate change agenda.

Analysts and overzealous treehuggers alike warned investors that the coal industry is doomed.

Run, hide, scream into the distance — do whatever it takes to escape the clutches of an industry that’s on the verge of ruin! The sky was falling and the sound of it all was deafening.

So as you might guess, it’s quite obvious as to what we need to do now…

Buy Coal!

Fox News used this latest opportunity to dust off its “Obama Declares War on Coal” headlines.

And MSNBC offered its disgustingly obligatory “atta boy” speech as it preached to a choir of folks who haven’t been sucked into the climate denial vortex.

Either way, it makes no difference to me. Because make no mistake about it; coal ain’t dead.

And U.S. coal companies are not going gently into that good night.

As I’ve outlined in these pages before, the global demand for coal is not waning. In fact, it’s growing quite rapidly. Look to the east and look to the west and you will see nations desperate to lock in long-term supplies of one of the most sought-after exports the United States has to offer: coal.

Truth is while Obama and dirt-cheap natural gas are putting the kibosh on coal-fired power in the United States, there are currently 1,200 new coal-fired power plants in pre-construction phases in 59 different countries. China and India are leading the way, but there are some other lesser-known European nations that are also not giving coal the cold shoulder. Take Poland, for instance…

Just last week, Polish Prime Minister Donald Tusk announced that coal is likely to play a much more important role in that country’s energy mix. And Poland’s utility PGE recently signed a letter of intent to expand its coal-fired power generation capacity by 900 megawatts.

Although it looks like the economics may not make sense right now, in an effort to bolster energy security, the government has committed to finding the necessary funds for the expansion.

Of course, Poland isn’t in the same boat as China and India. Poland’s coal bounty is sizable and can easily meet growing demand. In China and India? Well, that’s another barrel of fish entirely…

Rats on a Sinking Ship

If U.S. coal producers relied exclusively on the U.S. market, they’d be little more than rats on sinking ships.

But that’s not the case at all. In fact, in an effort to adapt to an increasingly hostile domestic market, U.S. coal producers continue to grow and expand into other markets, including — but not limited to — the following:

Consol Energy (NYSE: CNX)
Arch Coal (NYSE: ACI)
Alpha Natural Resources (NYSE: ANR)
Cloud Peak Energy (NYSE: CLD)
Peabody Energy (NYSE: BTU)

Bottom line: If you want to play coal, don’t be scared off by Obama’s climate change plan.

Instead, use this opportunity to pick up some fairly cheap coal stocks.

Or, if Obama’s words regarding coal-fired power still concern you, don’t neglect the easy money in domestic oil and gas.

In fact, in case you didn’t notice, the oil and gas industry was barely mentioned by the president last week. Sure, he took some shots at some questionable tax incentives, but it’s quite clear the oil and gas industry still has a seat at the president’s dinner table. In fact, Obama even praised natural gas as a way to provide safe cheap power while reducing carbon emissions.

And instead of vilifying the industry, when it comes to methane emissions related to natural gas production, Obama’s been very excited about working with the industry, not against it.

Draw your own conclusions here as to why the president’s climate change plan is unfolding the way it is, but for the sake of profits, don’t disregard the continued opportunity in domestic oil and gas. I’m certainly not.

My only concern at this point is that recent report from the Council on Foreign Relations, which found that cyber attacks on oil and gas producers have been increasing in sophistication and frequency. And of course, there are all those attacks that we’ll never hear about, too…

Cyber attacks aren’t only happening in the U.S, either, but also in the Middle East, where both Qatar and Saudi Arabia have been major targets.

However, the truth is cyber attacks are nothing new. Don’t think they’re going to disappear for any industry.

Although the potential of a serious cyber attack on domestic oil and gas producers is a reality, it’s not one that will deter investors. So I remain bullish on domestic oil and gas over the long term.

I’m also looking to pick up some cheap coal stocks while maintaining some exposure to alternatives through companies like SolarCity (NASDAQ: SCTY) and clean energy REIT Hannon Sustainable Infrastructure (NYSE: HASI).

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

Jeff Siegel Signature