Coal news and updates

On June 2, the Environmental Protection Agency (EPA) proposed the Clean Power Plan , which would cut carbon pollution  by 30% from 2005 levels by 2030.

 

A bit of background:

 

In 1997, the UN Framework Convention on Climate Change collaborated on the creation of the Kyoto Protocol , an international treaty binding participating countries to the reduction of greenhouse gas emissions. The United States signed the Protocol but did not ratify it, making it one of 4 UN members not party to the Protocol (the others were Canada, Andorra, and South Sudan). A slew of other proposed acts aimed at climate stewardship and pollution reduction have failed in Congress over the course of the 17 intervening years.

 

In 2003, a report published by the Pentagon recommended that the United States elevate the climate change debate to a "U.S. national security concern." This came at the heart of the Bush era, and evidence later surfaced  that the Bush White House had actively suppressed the discussion of global warming by putting pressure on scientists.

 

What it all means:

 

Now, the Clean Power Plan must go through a public comment period and through Congress. Ostensibly, Obama has enough votes to veto opposing legislation  and push the Plan through. Popular support for action against climate change has increased by 13% in the past five years , according to a Wall Street Journal  poll that found that 67% of respondents are in support of the Clean Power Plan, even if it means higher electricity costs.

 

The Plan is flexible in that it does not impose specific rules by state, but rather allows them to develop their own. However, the plan targets power plants, many of which rely heavily on burning coal for power generation, which emits roughly twice as much carbon when burned as natural gas, as the Wall Street Journal reports.

 

If the EPA's new Plan sticks, power plants nationwide will almost certainly have to cut coal usage dramatically, and coal companies' stocks could take a hit. We took a list of the United States' top-producing publicly traded coal companies, borrowing  from the U.S. Energy Information Administration, and screened these top coal companies for their operating margins and profit margins. Tellingly, the two with the highest margins, BHP Billiton ( BHP ) and Consol Energy ( CNX ) have highly diverse operations, while the five with the lowest margins provide exclusively coal and coal-related services.

 

 

1. BHP Billiton Ltd. ( BHP , Earnings , Analysts , Financials ): Market cap at $188.37B, most recent closing price at $70.82. Operating margin at 34.6%, profit margin at 36.4%. Operations include aluminum, base metals, coal, diamonds, iron, manganese, petroleum and uranium.

 

2. CONSOL Energy Inc. ( CNX , Earnings , Analysts , Financials ): Engages in the production of multi-fuel energy and provision of energy services primarily to the electric power generation industry in the United States. Market cap at $9.23B, most recent closing price at $40.30. Operating margin at 6.7%, profit margin at 21.6%. Operations include coal, natural gas, timber, and water treatment.

 

3. Alpha Natural Resources, Inc. ( ANR , Earnings , Analysts , Financials ): Engages in the production, processing, and sale of coal in the United States. Market cap at $1.16B, most recent closing price at $5.27. Operating margin at -17.7%, profit margin at -22.4%. Operations are exclusively coal-related.

 

4. Arch Coal Inc. ( ACI , Earnings , Analysts , Financials ): Engages in the production and sale of steam and metallurgical coal from surface and underground mines located throughout the United States. Market cap at $886.73M, most recent closing price at $4.18. Operating margin at -7.5%, profit margin at -23.1%. Operations are exclusively coal-related.

 

5. Peabody Energy Corp. ( BTU , Earnings , Analysts , Financials ): Engages in the exploration, mining, and production of coal. Market cap at $4.57B, most recent closing price at $17.11. Operating margin at 3.4%, profit margin at -8.3%. Operations are exclusively coal-related.

 

6. Westmoreland Coal Co. ( WLB , Earnings , Analysts , Financials ): Operates as an energy company in the United States. Market cap at $314.04M, most recent closing price at $21.52. Operating margin at 4.8%, profit margin at -3.7%. Operations are exclusively coal-related.

 

7. Walter Energy, Inc. ( WLT , Earnings , Analysts , Financials ): Produces and exports metallurgical coal for the steel industry primarily in the United States. Market cap at $635.74M, most recent closing price at $10.16. Operating margin at -8.7%, profit margin at -22.5%. Operations are exclusively coal-related.

 

 

 

Source: http://www.nasdaq.com/