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  • chrxind chrxind Nov 17, 2012 2:41 PM Flag

    A Question about the Coal Industry

    I believe there may be a chance Zero backs off a little on coal. If anything extend the EPA requirements in order that technology can catch up for power plants. Coal to liquids, e.g., gasoline projects are under way in WVa via TransGas.

    Coal does indeed have advantages over even natural gas. Basically non-hazardous, easy to transport, and is in fact a still a base ingredient in many manufacturing processes. International demand should continue. I think a lot depends upon specific company fundamentals, management, balance sheet, and other businesses that the parent company may own/operate.

    Sell offs this year pretty much a combination of EPA requirements on power plants, oversupply due to mild winter, global recession, and Zero/EPA fears. Short-selling hasn’t helped much. I don’t own ACI, but do own CNX. Alliance is an MPL which surged yesterday assuming inter-day low Vs. high; the yield was just too good to pass up by many. As far as ACI, I see no reason why it would not get back to 10-12 or greater beginning perhaps mid-late 2013. If the balance sheet is strong, it should be able the current storm. If it fell to the 3 range based on no company fundamental change, I would buy it over higher priced straight coals.