Rocky Future Coal Is Best

Is dedicated coal? Dirty but abundant sources of energy have some rough patches before, but not like this. In 1985, coal accounted for 57 percent of all power generated in the U.S. last year was 42 percent. The Energy Information Administration of the U.S. it is estimated to fall to 40 percent this year. Appalachian coal prices fell 24 percent over the past 12 months, with coal from the Powder River Basin in Montana and Wyoming, they were down 45 percent. "With the price you are looking at now, no one can make money," said Lucas Pipes, an analyst at Brean Murray, Carret.Coal struggle with the perfect enemy: ultracheap natural gas. In all unlocked by fracking shale reserves, gas prices declined continuously since mid-2008, to the point where they are hovering around $ 2 per million British thermal units for the first time in a decades. That is less than the price of coal. Natural gas is that all domestic energy is from, so that imported fuel bill of the country does not go up. It was clean. And so abundant that the industry will run out of places to store it. Utility will be natural gas savings are passed on to customers. In 2013 the U.S. residential utility bill dropped 1 percent. With natural gas prices at around $ 2, everyone can switch transition. This year, Goldman Sachs (GS) energy analyst David Greely expect utilities to convert from coal to gas in an unprecedented level of 4.9 billion cubic feet per day. In 2008, coal made up 70 percent of the Southern Co. Ni (SO) power plant, 32 percent. At the same time, the South will rise in gas-fired generation from 16 percent to 46 percent. Although utilities in West Virginia, in the middle of coal country, convert. Since April, the sharing of Peabody Energy (BTU), the largest U.S. coal producer, fell by more than half, from $ 70 to $ 29. Stock Arch Coal (ACI) has gone from $ 35 to less than $ 10 at the same time. Some coal producers reported losses of hundreds of millions of dollars. "Natural gas is cheap really made a mess of many business models," said Kuni Chen, an energy analyst at CRT Capital Group. More of the lies continue. A number of old, dirty coal plants scheduled to close at the end of 2014 in accordance with the regulations of the Environmental Protection Agency. That could drive another 5 percent of the coal market, said Chen.Producers is idling the mine since January. In February, Patriot Coal (PCX) Big Mountain mine its lazy, laying off 250 workers. The next day, Alpha Natural Resources (ANR), the largest producer of coal in West Virginia, he will close two mines in the state and two in Kentucky, resulting in 320 layoffs. Those mines are not closed cut back on production and reduction in overtime and workers. Many retired miners, and they will not be replaced.It all stunning turnaround from a decade ago, when the coal lobby pushed the idea that the future of American energy reserves lie deep from Coal, the most abundant on earth. Argument is rarely heard today. Not everyone believes coal is completed. Analyst at FBR Capital Markets, an investment bank based in Virginia, thought the coal to gas transfer occurred, and moving up is more difficult due to logistical constraints and existing contracts. "King Coal is not so easily displaced," said FBR analyst Marc de Cro. Overseas customers realize, too: U.S. exports of coal rose 57 percent from 2009 through the end of 2011. New power plants in China and India could add 300 million tonnes of new coal demand this year. Some of the most bullish on the coal train business. Union Pacific (UNP) Chief Executive Officer Jack Koraleski predicting a strong summer for the shipment of coal. "Gas plants running flat out now, so the growth has got to come from coal then everyone turns their air conditioning," he said. "Coal is far from dead." Question is if it hurt wounded.The Bottom line: coal producer starts hammered in the stock market as a decline in natural gas prices cut into their industry.