Sunday, December 09, 2007

Coal and coal power stocks UP after big Senate global warming vote

Some of us have been cautioning for awhile that giving free carbon permits away to coal burning companies could bring windfall profits to those merchants of soot.

And it appears as if Wall Street may just agree with us.

As you will recall, the Senate Environment and Public Works Committee approved the so-called Lieberman Warner climate bill late on December 5th.

If this bill had been as bad for coal as some of the panel’s Republicans gloomily predicted, you would have expected share prices to plummet, both for companies that burn coal and those that sell it.

Instead, the exact opposite happened.

The next trading day on Wall Street (December 6), the stocks of the three biggest coal-polluting power companies went up. So did the stocks of the three biggest coal producers.

In fact, the stock price of the biggest coal company, Peabody Energy, hit a year-long high on December 6. So did Southern Company, which reportedly has eclipsed American Electric Power as the biggest carbon polluter.

And all of them closed up for the week.

So it seems that investors either shrugged off the global warming vote as inconsequential – perhaps aware there’s little likelihood of enactment of such a law in this Congress – or they agreed that the Lieberman-Warner bill actually makes coal and coal utility stocks more attractive by giving away many billions of dollars worth of free carbon permits to the worst polluters.


For the record, here’s what happened for the week for the top three coal-burning power company sources of carbon emissions:

Southern Company – up $1.28 a share for the week, to close at $38.90
American Electric Power – up $1.50 to close at $49.17
Duke Energy – up $.77 to close at $20.56

And the three top coal mining firms:

Peabody Energy –up $3.25 for the week, to close at $58.89
Rio Tinto – up $.52 to close at $468
Arch Coal – up $2.30 to close at $40.16

1 comment:

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