The European Gas Forum has warned the European Union (EU) that current trends in the energy industry will result in missing the aggressive environmental targets that had been set out. At the same time the EU is tinkering with the way it's imposing some targets. What you should take away from this is that U.S. coal and natural gas both have opportunity in Europe.

The European Gas Forum is an industry trade group that represents natural gas interests, so it's no wonder that it's upset right now. Low coal prices, coupled with low prices for carbon credits, has made it cheaper to burn coal than natural gas in Europe. Utilities have predictably been burning more coal.

For example, GDF Suez (ENGIY 0.83%) has a new 731 megawatt coal-fired plant in Germany. Although it uses modern equipment that helps keep pollution low, this and the four other new coal plants in the country certainly won't help in achieving EU targets. Of course, at the same time, Suez is also working on environmentally friendly wind farms.

Essentially, Suez is trying to balance the need for profits against the need for environmental stewardship. It's a tough task and one that the EU itself is starting to play with. For example, it recently announced that it would shift from binding individual renewable energy targets to a region wide target. That softens the blow for nations that are reliant on dirty fuels, such as Germany which gets about half of its power from coal.

The mixture of new coal plants, and a softened stance on renewable energy, means that companies like Alpha Natural Resources (NYSE: ANR) and CONSOL Energy (CNX 1.27%) still have solid thermal export prospects. Alpha, for example, recently booked a deal to sell four million tons of Central Appalachian coal into Europe. That's going to help the coal miner keep production up in that struggling coal region.

CONSOL Energy, meanwhile, just sold off about half of its coal business but kept its Baltimore Terminal and key, low-cost mines. The mines are a mixture of metallurgical and thermal, but the company made clear that the product of at least one mine "...can be sold domestically or abroad, as either thermal coal or high-vol coking coal." CONSOL is keeping its options open and with the Baltimore Terminal, it has a direct line into Europe.

Don't forget gas
This also shows the opportunity for natural gas produced in the United States. Since U.S. gas prices are relatively low, exporting gas to Europe could be a big long-term opportunity. And it will make the fuel more competitive with coal in that market.

There are a couple of ways to go on that front. For example, Royal Dutch Shell (RDS.B) is a global leader in the natural gas market. It already has key relationships in Europe and is building out its drilling efforts in the United States. That's been a drag since low gas prices have made the investment look like a mistake.

But Shell has the financial wherewithal to stick by this long-term investment, and an over 5% dividend yield is a nice enticement to go along for the ride. In fact, the recent $4.4 billion purchase of liquified natural gas (LNG) assets from Repsol (REPYY -0.75%) proves the company's commitment. Repsol, for its part, sold the assets to help pay down debt—so the move shouldn't be construed as a black mark on gas.

There's also LNG export terminals like Cheniere Energy Partners (CQP), which is set to be among the first functional export hubs. The partnership's Sabine Pass terminal is located on a river that boarders Texas and Louisiana, and is just a short trip from the coast.

Plenty of opportunity
Although the EU is looking to clean up its environmental footprint, it's pretty clear that coal isn't dead. And anything that helps bring down natural gas prices will be a win for everyone. As Europe tries to balance goals with reality look for companies like Alpha, CONSOL, Shell, and Cheniere to benefit. 

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