5/6/2016
By Charles Payne, CEO & Principal Analyst

The U.S. Justice Department moved for dismissal of the Murray Energy lawsuit that’s held up President Obama’s Clean Air Act.  The company says the EPA has not fulfilled its duty to perform the necessary employment evaluations.  If the case is not dismissed, it goes to court in July; however, many will say employment evaluations have already been done- and in a word: devastating.

The Obama administration hit energy with a slew of new regulations aimed at the following:

• Mercury
• Air Toxics
• Ozone
• Fuel Standards
• Particulate Matter

Candidate Obama promised that electricity prices must “necessarily” go higher, and he kept that promise.  I don’t need to tell you how much your electric bill has zoomed, but here’s a visual reference.

The Carnage

President Obama came in with an agenda to crush coal, and he succeeded mightily. In 2008, coal was responsible for 48.2% of electricity; last year, it was down to 33%.

His regulations to force power plants to adjust to measures for "clean coal" have been draconian and unfair as the industry was moving toward cleaner coal without the coercion.

Bankruptcies include Arch Coal, Patriot Coal, James River Coal, Walter Energy, and Alpha Natural Resources.

The jobs losses are in the tens of thousands.

President Obama came in with an agenda to crush coal, and he succeeded mightily. In 2008, coal was responsible for 48.2% of electricity; last year, it was down to 33%.

His regulations to force power plants to adjust to measures for "clean coal" have been draconian and unfair as the industry was moving toward cleaner coal without the coercion.

Bankruptcies include Arch Coal, Patriot Coal, James River Coal, Walter Energy, and Alpha Natural Resources.

The jobs losses are in the tens of thousands.

Stock market values have been wiped out as Bill Maher even gloated on his show that the industry once valued at $65 billion in market capitalization (market-cap) is down to $4.8 billion.

The hype that coal has been replaced by solar is a farce. Hydro was 6% and remains 6%, and "other renewable" are now less than 7% from 4.8%.

The standout comes from the fracking miracle which made natural gas cheap and it’s grown to 33% of electricity from 21.4%.

Where Do We Go From Here?

We will not get back to the golden era for coal, in part because of cheaper natural gas, but a booming economy means increases in price, and the need for metallurgical steel and power to run the economy helps coal demand, too.

Meanwhile, China is firing 1.3 million coal workers and spending $15 billion to re-train them and place them in new jobs.  Thus far, the administration hasn’t mentioned anything like that, but has poured billions in loan guarantees and direct investments into solar.

Four of the biggest solar power plants are generating a handful of permanent jobs:

• Ivanpah: 86
• Topaz: 12
• Desert Sunlight: 26
• Solar Star: 50

Hillary Clinton got into trouble as she talked about more layoffs with a certain amount of glee, and she’s working hard to walk back those comments.  Sadly, it’s too late to walk back all the damage the Obama administration has had on the coal industry.

Coal country is representative of hard working people, and that has actually sparked a revolution in the past.  In the Anyuan region of China, a massive coal strike in 1922 eventually propelled a guy named Mao and his communist ideas into a full-fledged revolution.

We may be on the cusp of a similar revolution in America.

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Charles Payne
Wall Street Strategies

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