While the President of the United States calls for an 'all of the above' energy policy, the Environmental Protection Agency's rules appear to suggest that coal isn't invited. However, International Energy Agency (IEA) chief Maria van der Hoeven says that every fuel option is important.

Can't do it alone
Speaking at an energy conference, van der Hoeven explained that, "You don't want too many eggs in one basket ... Coal, nuclear and wind are all essential for keeping the lights on." While that statement is very specific, the intent is broader. She is explaining that every energy option needs to be on the table.

In fact, the head of the IEA made specific reference to natural gas and the recent cold winter in the United States: "If your energy system had relied only on gas at the time of the polar vortex, the additional heating demand would have meant there was not enough gas." That's a notable problem for the Northeast, where in 2013 natural gas provided around half of the region's power. About a third came from nuclear, leaving odds and ends to make up the rest.

But this shift isn't unique; natural gas made up about 40% of the country's generating capacity last year. That's why van der Hoeven warns, "Renewables and energy efficiency—yes, they may well take center stage. But real action is required on [carbon capture and storage] and other low-carbon technologies to pave the way for oil, gas and coal to play the full role in secure global energy systems for decades to come."

The carbon capture future
This is one of the reasons that investors should be watching Southern Company's (NYSE:SO) progress at its Kemper coal and carbon capture project. Although that effort is costing shareholders dearly right now because it is over-budget and delayed, the long-term potential is huge. That said, it's hard to swallow the first quarter charge of $0.27 a share for cost overruns. The positive spin? That charge was down from the first quarter of 2013 when the charge was $0.38 a share.

SO Chart

SO data by YCharts

While Southern Company is profitable despite these troubling ongoing costs, which are likely to keep showing up in the near term, it's no wonder that investors are leery of the stock right now. (Southern Company is also building costly new nuclear plants that are hampering results, to add insult to injury.) But, if the IEA chief is right, carbon capture will be a huge technology.

One of the key reasons why Southern Company is pushing forward is that it owns a piece of the tech it's using. Southern Company's partner in what is really a giant carbon capture experiment is KBR (NYSE:KBR). Once the Kemper plant is up and running, KBR and Southern Company are hoping to sell the carbon capture technology to other utilities.

KBR is a large engineering and construction company with a global footprint. Southern Company's Kemper facility is just one of KBR's many projects. That said, KBR lost $0.29 a share in the first quarter, so it's not doing so well either right now. Southern Company's Kemper plant isn't the cause of KBR's loss, but the project's delays and overruns aren't helpful.

KBR Chart

KBR data by YCharts

That said, KBR has a backlog of around $13 billion, so it has years of work ahead of it. And a good portion of that work is in the liquefied natural gas space, which is hot right now. However, if Southern Company's carbon capture works as planned, look for KBR to get a nice boost from the technology—and for more than just coal.

Big opportunities
Since natural gas emits carbon when burned, don't think that coal is the only fuel that's going to need carbon capture tech. And with Southern Company taking the lead and KBR ready to bring the gear to the world, this pair is not only working to keep Southern Company's power profile diversified, but also positioning to make money as the world realizes that carbon capture is needed for more than just coal.