This article is part of Our Top 5 Energy Stocks for 2012 series.

I don't want to share my top energy pick for 2012. Because savvy Fools maintain a disciplined long-term investment focus, I'm far more interested in sharing my top energy pick for 2012, 2013, 2014, and well beyond. Not surprisingly, then, my stock selection for this series also topped a prior list of my top coal stocks for the next 20 years.

Although investment horizons are not regulated by the time it takes for our planet to revolve around the sun, I see nothing wrong with employing the measuring stick of a calendar year to pinpoint the market's most glaring and timely opportunities. For its unrivaled strategic position relative to the still-anticipated global supercycle for coal demand -- combined with a horrific trailing stock performance for 2011 that yields a very compelling valuation -- I consider Peabody Energy (NYSE: BTU) the greatest energy stock through 2020 ... at a price that's apt to make it among the top performers for 2012.

Why Peabody's current share price is just plain wrong
I have sounded the valuation alarm repeatedly over recent months with respect to the miners of coal at large, but to find the majestic king of coal buried among the commoners is truly an opportunity to behold. The stock currently trades at between eight and nine times projected 2011 earnings of between $3.70 and $4.15 per share. As we've discussed elsewhere with respect to gold miners, price-to-earnings multiples will rationally run higher among mining stocks to properly value their buried treasures in mineral inventory. On those rare occasions when they dip into single digits for a proven and growing operator like Peabody Energy, keep your Foolish ears to the door and hear that opportunity knocking.

Peabody's strategic acquisition of Australian miner Macarthur Coal earlier this year will add at least 5.5 million tons of coveted PCI coal during fiscal 2012 to Peabody's rapidly expanding production platform in Australia. Steelmakers continue to expand their use of PCI coal to lower their costs, and by 2014 the addition of two new mines from Macarthur's development pipeline will see that output expand by 67% or more to 9.2 million tons per year! Over the next three years, in fact, Peabody's consolidated production in Australia is now expected to surge from 27 million tons to as much as 50 million tons! Incredibly, that begins to approach recent levels of Australian output from megaminers BHP Billiton (NYSE: BHP) and XSTRATA. With the addition of Macarthur, Peabody will now boast a 40-year reserve life of 1.37 billion tons that further widens the gap beyond Rio Tinto's (NYSE: RIO) 1-billion-ton stash. As investors familiar with the industry well know, making Rio Tinto appear small is no easy feat!

Back in September, Peabody's senior vice president for investor and corporate relations -- Vic Svec -- wrote to me with a compelling testimonial. He revealed: "I recently moved my entire 401K into BTU stock based on what seems to be a momentary lack of relationship between equities and underlying fundamentals." I always delight in seeing that level of conviction among senior management. Svec went on to point out that Peabody's typical valuation premium over its U.S. peers has vanished in the midst of this correction, even as the growing scale of met-heavy Australian output would seem to require an expansion of that premium. Remarkably, after underperforming the sector-specific Market Vectors Coal ETF (NYSE: KOL) over the past few months, Peabody Energy now trades at a substantial discount to U.S. rival Arch Coal (NYSE: ACI) when comparing the ratio of their respective enterprise values to projected 2011 EBITDA.

Why the coal market correction is just plain wrong
The utter trampling of coal stock valuations here in 2011 reflects a combination of some rational concern over deteriorating growth outlooks around the globe, mixed with a glaring element of indiscriminate selling that has yielded compelling valuations like the bargain I perceive in shares of Peabody Energy. But here's the rub: Even accounting for significant downgrades in the outlook for global economic activity, the outlook for coal demand worldwide remains unassailably bullish.

For all the panic about tempered commodity demand from China this year, that nation's steel production rose 11% through the third quarter, while coal-fueled electrical generation expanded by 13%. China's coal imports for the third quarter were 36% above the prior-year mark, while India's imports surged 40%! Equipment manufacturer Joy Global (NYSE: JOY) recently noted that China intends to invest some $840 billion on power-related infrastructure over the next five years, and Peabody cites India's intention to invest $1 trillion on infrastructure overall during the corresponding period.

That infrastructure requires massive quantities of steel, and Peabody sees a 60% increase in global met coal demand reaching 1.44 billion tons per year by 2020. To meet that demand, approximately 50 million tons of new met-coal supply will be required each year; or about five times Peabody's entire met coal production from Australia during 2010. In addition to Peabody's landmark acquisition of Macarthur Coal, the feverish pace of met-coal consolidation underscores the resilient nature of the industry's bullish long-term outlook for demand. Following Walter Energy's (NYSE: WLT) takeover of Western Coal announced in late 2010, Alpha Natural Resources (NYSE: ANR) started 2011 with a bang by gobbling up embattled rival Massey Energy. A series of smaller, but nonetheless telling transactions for assets in Western Canada likewise warrant Foolish attention.

An ongoing explosion in coal-fueled electrical generation in China and India continues to drive potent expansion of total demand for thermal coal, with some 1.4 billion tons of new annual demand expected over the next five years.

Peabody's prime position in the emerging coal supercycle
Harnessing a strategic focus on meeting that demand through a spate of major growth projects in China, Mongolia, and Australia, Peabody is beautifully positioned to undergo its own massive growth spurt alongside Asia's seemingly insatiable hunger for thermal and metallurgical coal. Peabody appears likely to garner a profitable slice of Mongolia's world-class Tavan Tolgoi project, and is advancing a trio of projects in China's Xinjiang province that would collectively yield some 85 million tons of thermal coal per year. Of course, Peabody remains a dominant player within the Powder River and Illinois basins of the United States, and the company has secured some 24 million tons of throughput capacity at a planned deepwater port in Washington to ensure competitive access to expanding export demand for western U.S. coals. Pairing those initiatives with anticipated five-year production growth in Australia of between 67% and 85% from Peabody's 2010 output, investors are bound to marvel at Peabody's winning combination of sustainable growth potential at today's bargain-basement valuation.

Reflecting my conviction in the deep-value nature of this long-term growth opportunity, I have added Peabody Energy as a top pick within my Motley Fool CAPS portfolio. I encourage investors to continue tracking the king of coal by bookmarking my article list here, and by adding the stock to their Foolish watchlist using the link provided below.