November 16, 2016 Read More →

Wall Street Coal Analysts Skeptical of Comeback

Bill Holland for SNL Beta:

Despite his campaign promises, Donald Trump will not be able to revive the U.S. coal industry absent a sharp spike in natural gas prices, as he loosens environmental regulations on oil and gas pipelines, a pair of analysts have been telling their clients since the election.

Trump’s plan to loosen environmental regulations and speed pipeline permitting will hasten the demise of coal for power generation, Sanford C. Bernstein & Co. LLC midstream analyst Jean Salisbury said. “Cheap natural gas is the true chief culprit in coal’s decline, and if Trump’s other campaign promises regarding expanding gas infrastructure are to be believed, gas supply may grow even more quickly than it would have under [Hillary] Clinton,” she said in a Nov. 9 note.

“MATS didn’t kill coal, gas prices killed coal,” she said of the Mercury and Air Toxics Standards issued by the EPA after a prolonged battle that went all the way to the Supreme Court. The coal industry has blamed MATS for the forced retirement of coal­fired power plants.

Full article: Trump policies to hasten coal’s demise through gas build, Bernstein analysts say

Taylor Kuykendall for SNL Beta:

Analysts warn that Donald Trump may have over-promised when he told coal miners he would put them back to work, but coal companies and their investors are optimistic the new administration will bring opportunities to the sector.

The battered coal industry, already nipping at the prospects of a recovery with boosted production and improved prices over the third quarter, has been celebrating Trump’s election to the White House. While there may be reasons for coal companies to celebrate, many believe it is not likely that adding new jobs or significantly increasing coal’s footprint in the U.S. is among them.

“It’s not really tied to the elections,” said Anna Zubets-Anderson, a senior analyst and vice president with Moody’s. “It’s one of the things I suppose could be seen as positive for the industry, but we don’t see it as a major factor simply because we continue to believe the coal industry is pressured by more economic factors like low natural gas prices and global environment that puts coal at a disadvantage.”

Moody’s recently published a report changing the outlook for coal from negative to stable based on immediate relief the sector has received from higher metallurgical coal and natural gas prices. Despite the election, she said, the coal sector is still up against a wall of global uncertainty that disadvantages the sector.

Full article: From a ‘cliff’ to a ‘glide path,’ analysts see Trump benefit to coal limited

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