Obamas re-election: whammy for coal industry

The global coal industry, with its hopes pinned on Romney, got into hot water after the Republican contender lost his bid for the White House.
Obama, who has been an ardent supporter of clean energy since his first term, is likely to further squeeze the noose on Green House Gas (GHG) emissions, following the devastating hurricane Sandy that has brought the global warming issue under the limelight, internationally.
Under Obamas presidency, EPA intends to develop more stringent regulations concerning carbon emissions control. Hence, US, the largest consumer of the world coal is now planning to bank on its natural gas reserves which clocked in at 8.5 ton/ cubic meters as of CY11. Moreover, shale gas resulted in both increase in reserves as well as a considerable plunge in natural gas prices.
With the plentiful availability of natural gas at cheap rates (less than $3/1000 cubic feet as against $7.98/1000 cubic feet in pre-Obama era), the substitution of coal with natural gas makes fair economic sense.
During Obamas initial term, EPA took two aggressive stances: MATS and CSAPR, against carbon emissions. These measures outlined technology-based emissions limitation standards for mercury and other toxic air pollutants, while benchmarking the emission levels achieved by the best-performing sources in operation.
Currently, EPA is working on a set of standards for greenhouse gas emissions for new stationary sources which will further deal a death blow to the already flagging coal industry.
Reportedly, with the re-election of Obamas administration, Murray Energy Corporation, the leading privately owned coal company in the US, is giving pink slips to163 workers at its three subsidiaries, given Obamas war on coal.
This eco-friendly backdrop is anticipated to take its toll on coal prices while the industry shall grapple against the ruthless realities in the years to come. International coal prices plunged by 31 percent CYTD to around $ 86.5 per ton.
The frail demand of coal in the US coupled with the slowdown in growth in China, paints a rosier picture for the cement industry, including that in Pakistan as it is predominantly dependent on coal as its major raw material.
With no hopes of completion of Thar coal project in the near-term, the downturn in international coal prices is likely to further buttress the bullish outlook of the local cement industry, already riding the crest.