Coal stocks plunge after Obama victory
NEW YORK (AP) — Coal stocks plunged Wednesday on the expectation that a second term for President Obama means tougher going for coal companies.
A series of environmental regulations proposed by the Obama administration could reduce the nation's coal use. Coal consumption has already dropped sharply as a glut of domestic natural gas has made it cheaper for utilities to burn gas instead of coal to generate power.
Republican Mitt Romney proposed rolling back some restrictions on emissions from power plants and had positioned himself as a supporter of the coal industry. Coal shares rallied after Romney was declared the winner of the first presidential debate in early October.
James River Coal Co. was the sector's biggest decliner Wednesday after reporting a wider-than-expected loss in the third quarter and saying available cash had dropped to $172 million on Sept. 30 from $192 million as of June 30. The shares plunged 22.6 percent to $3.63.
Elsewhere Peabody Coal Co. fell $2.68, or 9.2 percent, to $26.36. Arch Coal Inc. dropped 96 cents, or 11.1 percent, to $7.70 and Alpha Natural Resources Inc. sank $1.21, or 12.6 percent, to $8.41.
Under President Obama the Environmental Protection Agency has proposed tighter limits on mercury, sulfur dioxide and other pollutants that would make it more expensive for utilities to burn coal, a major source of those emissions.
The EPA has also proposed putting limits on the amount of carbon dioxide new power plants can emit. The limits don't specifically prohibit coal-fired power plants, but experts say it would be all but impossible to build an affordable new coal plant that could meet the limits. Those proposed standards wouldn't affect coal plants in operation or under construction, but they have dimmed coal's long-term outlook in the U.S.