Coal survivor

10 June 2014 By Kevin Allison

When $11 bln Consol bet big on gas in 2010, investors sold in favor of rivals focused exclusively on the black rock. Now, with a clean air crackdown coming, Consol’s value dwarfs that of once-larger Peabody. The prescient hedge could be a telltale sign for the energy industry.

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The U.S. Environmental Protection Agency on June 2 proposed new rules that would require the country’s existing power plants to cut their carbon dioxide emissions to 30 percent below 2005 levels by 2030.

Consol Energy’s market value was $10.8 billion on June 10, an increase of $1.9 billion since it announced a $3.5 billion deal to buy natural gas assets from gas driller Dominion in March 2010. Over the same span, Peabody Energy’s market capitalization fell from $12.7 billion to $4.5 billion, according to Thomson Reuters data.

The price of imported coal in Europe, the main export market for U.S. coal miners, has declined by about 35 percent since Peabody completed a $5.1 billion hostile takeover of Australian metallurgical coal producer Macarthur Coal in December 2011.

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