Investors Face This Risk From Coal’s Quick Death

Coal is struggling and unpopular in all but a handful of regions where they actually pull it out of the ground.

But simple economics rather than public perception is what’s set to deal coal its death blow.

Coal’s limited economic importance isn’t likely going to be enough to overcome the latest wave of bad news buried in a series of recent reports – the most dramatic indication yet that coal is dying even faster than expected.

You see, a relative newcomer to U.S. electricity production (you guessed it: natural gas) is pushing down prices for old stalwarts like coal and even nuclear power.

Simply put, the black rock has 12 to 18 months at the outside before conditions get so bad that coal (and nuclear) plants begin closing in earnest.

And that’s when shareholders get burned.

So it’s time to make sure you limit your exposure and protect yourself from the shares I’m going to name here…

Coal Is Dying Much Faster Than Expected

While coal has been under pressure for some time, the latest indications are that the low is beginning to result in the likely retirement of additional coal-fired electricity generation.

Absent a major spike in gas prices, natural gas may actually surpass coal in electricity-generating capacity before the end of this year.

The impact of this may even extend into the nuclear segment of power production.

As reported by SNL Financial, “Moody’s warns that ‘persistently gas prices’ have placed several coal and nuclear power plants at risk of closure, with merchant generators scrambling to cut costs.”

The cost of natural gas is now the barometer for marginal electricity rates, and those rates dictate the price of unregulated electricity in the U.S. power sector.

As Moody’s put it: “Low natural gas prices have devastated most of the U.S. merchant power sector because gas-fired power plants often serve as the marginal plant during times of peak power demand. Lower natural gas prices have effectively driven down wholesale power prices for all generators, regardless of whether they are using natural gas, coal, nuclear power or renewable resources to generate their electricity.”