DENVER - Coal stocks rose Wednesday after Sen. John Kerry conceded the election.
Coal stocks had been held down by "Kerry risk," analyst Jonathan Wolff of Wachovia Securities wrote in a research note Wednesday. "Kerry and the Democrats are more environmentally conscious and were seen as potentially affecting the coal demand growth story, which was just getting started in earnest."
A Kerry administration likely would have tried to enforce stricter nitrogen oxide, sulfur oxide and mercury emission standards and could have reignited the global warming issue, Wolff said.
"We think a second term with Bush would limit the risk on the carbon dioxide issue becoming a major concern for coal demand," he said.
Richmond, Va.-based Massey Energy Co., the nation's fourth-largest coal company based on revenue, was "gratified" to see the Bush win, said Katharine Kenny, investor relations director.
"A Bush win is probably a positive in that he has been very aware of energy issues in the country," Kenny said.
Massey shares closed at $27.51, up $1.39, or 5.3 percent, on heavy volume on the New York Stock Exchange.
Other coal stocks ended higher Wednesday include Peabody Energy Corp., up 5.3 percent; Consol Energy Inc., up 4.6 percent; Arch Coal Inc., up 5 percent; and Walter Industries Inc., up 7.7 percent.
Massey Energy's Kenny said that Bush's Clear Skies Act is a "fair and balanced plan for the future that acknowledges the importance of coal and clean coal in the future energy needs of our country."
She said a Bush win "is an acknowledgment that coal will be an important part of the energy future in the U.S."
Supporters say Bush's proposed Clear Skies Act will cut pollution while providing clarity to power companies on emission standards, especially for coal-fired plants.
The Sierra Club Web site says the initiative "expands the pollution trading system that results in some communities getting cleaner, but many communities losing out on cleaner air."
Wachovia's Wolff said the Clear Skies Act now has a greater chance of being passed, and could encourage power generators to build more coal-fired plants.
"We continue to believe the coal group has legs," he said.
Legg Mason analyst Paul Forward was bullish about the coal industry even before the Bush win. He wrote on Monday that he maintains "a positive view on the U.S. coal industry as an alternative fuel to increasingly scarce natural gas and oil."
Forward said short-term risks to the sector are that too much coal production comes online or that oil and gas prices decline significantly, but he said he sees "little current evidence that these risks are building."
Neither analyst owns shares in the companies mentioned. Wachovia and Legg Mason provide investment banking services to some of the companies they cover.
© 2018. All Rights Reserved. | Contact Us