Coal Makes a 2014 Comeback

Will coal companies resurrect in 2014?

Jan 12, 2014 at 2:00PM

This article was written by -- the leading provider of energy news in the world

While environmental regulations and cheap natural gas have worked together to kill off coal in the United States, coal is not dead yet. The rapidly unfolding shale gas revolution brought prices down so significantly in recent years that natural gas began to capture market share from coal in a meaningful way. In particular, coal's share dropped from 42% in 2011 to 37% in 2012. There were even moments in time in 2012 when both fuels were making up equal percentages of the electric power sector.

Environmental regulations also are steering utilities away from coal. However, although some of the most biting regulations – limits on mercury pollution and greenhouse gases – will force the closure of dozens of coal-fired power plants over the next few years, they have yet to take effect.

That means that the recent rise in natural gas prices has made coal economically viable again, at least for the short-term. Coal took back some lost ground from natural gas in 2013, rising to 39% of electric power generation, while natural gas fell from 30% to 28%. That trend will likely continue into 2014 with natural gas prices now higher than they have been at any time in over two years. The Energy Information Administration predicts that coal's share of the electricity market will add another percentage point this year, hitting 40%. Meanwhile, natural gas could fall further behind as it is projected to fall to 26.8% in 2014.

As mentioned above, several environmental regulations have been finalized but not yet put into effect. The Mercury and Air Toxics Standards (MATS) rule sets the first federal limits on toxic pollution from power plants. The Cross-State Air Pollution Rule will require upwind states to curb pollution that drifts to other states (although this rule is facing legal challenges). Although it is difficult to find reliable estimates on how many coal plants will shutter due to these rules because many are closing for a variety of reasons, the Associated Press estimated that EPA rules alone could kill off about 8% of the nation's coal fleet.

Therefore, the coal resurgence may be short-lived. The EIA estimates that with the MATS rule coming into effect in 2015, coal's share of the electricity market falls back to 38.6%, with natural gas rising to 27.6%. Moreover, EIA projections are usually pretty conservative and tend to overlook things that could change the overall economic calculus, such as steep drops in the costs of renewable energy. Their models also only include current laws on the books so any legislation or regulation forthcoming could alter the trajectories of coal and natural gas. That means that the slope of decline for coal after 2015 could be steeper than the EIA envisions.

Take one example. The EPA proposed limiting greenhouse gases from new power plants last year as part of the President's climate plan, and the much more significant limits on existing power plants are beingconsidered by the EPA. If finalized, a massive amount of coal-fired capacity could become economically unviable, as costly carbon capture technology would be too expensive. That would be the final nail in the coffin for coal-fired generation.

Yet, in the short-term, high natural gas prices are breathing a bit of life into the coal sector.

The end of OPEC? 
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!


Related article: Are We Falling Off the Climate Precipice?

Related article: Four More Reasons to Bet on Coal in 2014

Written by Nick Cunningham at

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information