Is it Time to Ditch Big Coal Stocks?

By Diane Bullock A new documentary is set to raise awareness about the devastating effects of mountaintop removal, just as support for wind power farms begins to gain real traction. It has all the makings of an energy fairytale: Cheap, wholesome, inexhaustible power straight from the heavens that could supply America with free, renewable electricity -- forever. A concentrating solar power plant over a 75-square-mile area of the Southwest desert that could power the entire US energy grid. North Dakota, the “Saudi Arabia of wind,” with the potential to supply 1.2 trillion kilowatt-hours of annual electricity to its citizens (14,000 times its electricity consumption) using nature's own wind. But rearing its ugly, soot-caked head and ruling over the American energy landscape from its carbon-fired castle is Big Bad Coal: the source of more than half of our electric power and nearly one-third of our carbon emissions. (To read John Thomas's piece on the rarity of earth metals, click here.) Unless one owns shares in Peabody Energy (BTU), Arch Coal (ACI) or Cloud Peak Energy (CLD), it's hard to find reasons to be enthusiastic about coal. We know it's dirty. We know it's dangerous. And we know of its devastating effects on the communities where it's mined and burned. Mountaintop removal has blasted a Delaware-sized hole in Appalachia, buried 2,500 miles of rivers and streams and flattened 500 of West Virginia's largest mountains. Coal River Mountain, the last major intact mountain ecosystem in the Coal River Watershed, and the hard-fought battle for its preservation is the subject a new documentary called The Last Mountain. Citizens of the tiny community of Coal River Valley, West Virginia have taken on Massey Energy (MEE) -- since acquired by Alpha Natural Resources (ANR) -- to save their mountain from what had been certain destruction. The townspeople were met with resistance at every level, from the local planning board to the governor's office, who all claimed to be powerless against Big Coal. It wasn't until they enlisted the help of their local CBS news affiliate to cover their protests that their movement began to gain traction. According to environmental attorney Robert F. Kennedy, Jr., who is featured in the film, the plucky community may actually manage to pull off a victory and save their mountain. Coal River Mountain is even looking into proposals for the construction of a wind farm. (To read James Kostohryz's piece on the dip in employment, click here.) But this anticipated outcome is hardly indicative of our country's environmental policy. Big Coal was, and is, very safe. The government and fossil fuel producers have long shared a symbiotic relationship in which both entities depend on the other to prosper and, in some respects, exist at all. The coal mining lobby spent more than $18 million in the 2010 election cycle. And with reciprocity as the rule, these contributions translate into favorable legislation, handouts and subsidies. Doug Koplow, one of the nation's leading experts on energy subsidies estimates that tax payers pony up $41 billion annually for oil and gas and $8 billion for coal. The monies come in the form of federal loan guarantees, funding for research and development and special tax exemptions. Washington, in large part, has been wholly complicit in this quid-pro quo. “Even Obama, who knows better about this issue, has to choke out the term ‘clean coal' occasionally because he has a broader agenda.” says Kennedy. “He has health care and two wars and saving the automobile companies, and he needs the 11 coal state senators...more than half are democratic, to vote for his agenda. And they're not gonna do it unless he supports Big Coal.” (To read Brett Chase's piece on June catalysts for biotech, click here.) In terms of lining up for subsidies, however, green energy actually isn't that far behind coal. According to Koplow's figures, renewables are on the dole for about $6 billion per year -- the lion's share going to wind power, followed by solar, biomass, geothermal and others. Additionally, Koplow believes “the relative share of subsidies to renewables has increased more quickly in recent years than subsidies to fossil [fuels].” Minyanville's Ten Clean Energy Companies to Watch noted (along with clean tech's top publicly-traded contenders) some long-term trends in alternative energy. Japan, Germany and China have begun to steer away from nuclear power and President Obama set a goal for 80% of America's electric power to be generated from clean sources by 2035. And while it may only amount to an empty symbolic gesture, the solar panels installed in the Carter White House -- only to be removed a few years later by Reagan -- are back up on the roof. So, which energy faction will live happily ever after? Likely, both. Green power will continue to gain momentum but will have to coexist with Big Coal, albeit the next generation of Big Coal. Tightened air emissions standards have halted the siting of many new coal-fired power plants and as a result, promises to create carbon-catching technologies are being bandied about. North Carolina's Duke Energy (DUK), which traditionally derived the majority of its electricity from coal, claims to be making "significant investments" in solar power. A glass slipper for each: one clean, one hopefully getting scrubbed.