by winston » Thu May 05, 2016 6:49 am
President Obama and the Coal Crisis
by Charles Payne
President Obama came into office with an agenda to crush coal, and he succeeded mightily. In 2008, coal was responsible for 48.2% of electricity generated. Last year, it was down to 33% as the administration hit energy with a slew of new regulations aimed at air toxins, fuel standards, particulate matter and other restrictions.
Obama also kept his promise that electricity prices must go higher. I don’t need to tell you how much your electric bill has popped, but here’s a visual reference:
Stock market values have been wiped out. The energy industry, which was once valued at $65 billion in market capitalization, is now down to just $4.8 billion. Bankruptcies include Arch Coal, Patriot Coal, James River Coal and too many others—and the job losses number is in the tens of thousands.
Stable companies to invest in have become few and far between, but we just aren’t seeing that downtrend being compensated for in other sectors.
The idea that coal has been replaced by other renewable energy sources is a farce. Solar power still only generates 7% of our total electricity production, and hydroelectric has hovered at 6% since 2009.
The standout comes from fracking, which has made natural gas cheap and allowed it to balloon to 33% of total electricity production from 21% in 2009.
Meanwhile, China has fired 1.3 million coal workers and is spending $15 billion to re-train them and place them in new jobs. The Obama administration hasn’t mentioned anything that drastic thus far, but has poured billions in loan guarantees and direct investments into solar.
I don’t think we will ever get back to the Golden Era for coal, in part because of the cheaper cost of producing natural gas. Coal may have its challenges as a long-term investment, but some of the biggest winners in the market recently have been names that were written off for dead. As a result, I am hearing positive talk about coal making a run, so I am watching for possible short-term trading opportunities there.
Source: Making Money
It's all about "how much you made when you were right" & "how little you lost when you were wrong"