There was little surprise in the Environmental Protection Agency's (EPA) proposed carbon rules for existing utility plants. That, however, hasn't stopped the coal mining industry from fighting back. Peabody Energy (BTU), for example, is pushing the social benefits of coal, something that Cloud Peak Energy (CLD) is hoping to capitalize on in Asia. But Murray Energy is taking a more direct approach, fighting the rules in the courts.

The pugilist
Murray Energy has quickly leapfrogged into the big leagues of the coal industry via mine acquisitions. And now that it has doubled down on coal, it's pushing back against what it calls the "war on coal." Murray Energy's tool of choice is the U.S. court system. The miner has filed suits against the EPA's regulations for future power plants and the recently proposed rules for existing plants. The recent EPA losses in the Supreme Court suggest Murray at least has a chance to overturn the rules, even if it's not a good one.

This is something of a block and tackle move, because lawsuits could keep the rules stalled for years. And Murray's new-found size and status as a private company give it the leeway to play this important industry role. Public companies have to deal with shareholders and, thus, have to be more concerned with their public image.

The soft approach
That's exactly why Peabody Energy's Advanced Energy for Life initiative is about providing affordable power to those in the world who lack it. According to Peabody Energy CEO Greg Boyce, "As many as half the world's 7 billion people live without proper energy access for their most fundamental needs."

Source: COSV, via Wikimedia Commons

That doesn't meant no iPhones, televisions, or air conditioners; it means no lights or refrigerators. That's something even coal haters would have a hard time hating on. And this is a big issue. For example, China's power demand is expected to double over the next 12 years. Over the last four years alone the country added as much power capacity as exists in all of Japan. It will have to keep doing that if it wants to pull all of its citizens into the modern world.

A tough balance
So while the United States may be looking to slow its use of coal, developing nations aren't. There just aren't enough alternatives to provide the power that's needed. But what do the EPA rules and emerging market coal demand have to do with each other? According to the BP Statistical Review of World Energy, the United States has more coal reserves than any other nation, at over 25% of the world's coal.

That means exporting coal to nations building out their power grids could be big business. Peabody Energy already sells coal into Asia from its Australian operations. But it would very much like to send more domestic coal to Asia via West Coast export terminals. Cloud Peak Energy, which only mines domestically, would like to do the same thing and expand its Asian footprint beyond Korea.

But what Murray calls a "war on coal" reaches beyond just domestic power plants. It's also making it hard to build export terminals. Of six proposed West Coast terminals, only three still have a shot. And one of them is the Gateway Pacific Terminal through which Cloud Peak Energy is looking to send up to 17.6 million tons of coal. It's expecting to ship up to 90 million tons this year, so exports could be a huge avenue of growth -- if the port gets approved.

Source: Brylie Oxley, via Wikimedia Commons

If the port doesn't open, Cloud Peak has a big problem on its hands, since U.S. coal volume fell over 10% between 2011 and 2013. That flows through to Peabody Energy, too, but Peabody's global footprint will soften the blow somewhat. But it will make growth far more challenging for even Peabody if U.S. demand softens and U.S. coal export capacity is constrained.

More than a sleeper issue
The EPA rules are making the headlines, but coal exports are equally important to the industry's future. Cloud Peak Energy's business will shrink if it can't export more coal. Peabody Energy, meanwhile, will have to rethink its portfolio and, potentially, put even more effort into expanding its foreign operations. All this while massive amounts of U.S. coal could allow both companies to help bring power to the billions of people who need it. The "war on coal" is a multifaceted battle; don't get so blinded by the utility fight taking place that you forget about exports.