NEW YORK, NY--(Marketwire - Nov 13, 2012) - Coal stocks across the board fell sharply last week as Obama's re-election increased speculation that more regulations may be on the way for the already struggling industry. Both the Market Vectors Coal ETF (KOL) and the PowerShares Global Coal ETF (PKOL) both fell over 5 percent last week. The Paragon Report examines investing opportunities in the Coal Industry and provides equity research on Alpha Natural Resources, Inc. (NYSE: ANR) and Peabody Energy Corporation (NYSE: BTU).
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The Environmental Protection Agency has imposed limits on pollutants such as carbon dioxide, mercury and sulfur dioxide, which have made it more expensive for utility companies to burn coal for energy generation. Mitt Romney was widely known as a supporter of coal, and argued "excessive" environmental regulations have had a negative impact on U.S. economic growth. Reuters last week reported that coal stocks fell on fears President Obama would impose more regulations on the coal sector.
"The coal industry has seen increased regulatory oversight from the EPA on a number of issues under Obama's first term, such as stricter permitting requirements in Appalachia and new regulations for emission reductions at utilities," said Lucas Pipes, a Brean Capital Carret & Co. analyst. "There's a perception that another Obama term is negative for coal."
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Alpha is the nation's largest supplier of metallurgical coal used in the steel-making process and is a major supplier of thermal coal to electric utilities and manufacturing industries. In 2011, the Company had more than 200 customers on five continents. The company in September announced plans to reduce their annual production by an additional 16 million tons. Shares of the company have fallen 15 percent in the past week.
Peabody Energy is the world's largest private-sector coal company and a global leader in sustainable mining and clean coal solutions. The company serves metallurgical and thermal coal customers in more than 25 countries on six continents. Peabody projects global seaborne thermal coal demand will rise by approximately 100 million tons in 2012. Shares of the company have fallen nearly 20 percent year-to-date.
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