Sector Snap: Carbon rule weighs on coal stocks

Coal shares drop after Obama administration proposes rule to limit carbon pollution

Associated Press

NEW YORK (AP) -- A proposal from the Obama administration that would limit carbon pollution from new power plants is weighing on shares of coal companies Friday.

The proposal wants to reshape where Americans get their electricity, moving away from a coal-dependent past to a future fired by cleaner sources of energy. Despite some tweaks, the rule packs the same punch as one announced last year, which was widely criticized by industry and by Republicans as effectively banning any new coal-fired power plants.

Coal accounts for 40 percent of U.S. electricity. But cheap natural gas is increasingly popular as a power plant fuel, and coal's share was already shrinking.

Natural gas would need no additional pollution controls to comply with the new rule, but new coal-fired plants would need to install expensive technology to capture carbon dioxide and bury it underground. No coal-fired power plant has done that yet, in large part because of the cost.

Here's how some coal companies fared in midday trading on Friday:

Alpha Natural Resources Inc. fell 33 cents, or 5 percent, to $6.30.

Arch Coal Inc. dropped 23 cents, or 4.6 percent, to $4.76.

Consol Energy Inc. fell 31 cents to $35.03.

James River Coal Co. shed 8 cents, or 3.8 percent, to $2.05.

Peabody Energy Corp. dropped 55 cents, or 2.9 percent, to $18.19.

Walter Energy Inc. declined 68 cents, or 4.5 percent, to $14.34.

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