By Avi Salzman
Few industries soared as much as coal on Wednesday after Donald Trump won the presidential election.
Arch Resources and Consol Energy were up 12%, and Peabody Energy rose 10%. The S&P 500 gained 2.5%.
Trump's victory could extend the life of coal plants for years, because he plans to throw out the Biden administration's environmental rules on the fossil fuel. Despite pledges by several countries to use less coal, it has stuck around, and global coal demand even rose to a record level last year -- largely because of increased use by China and India.
That isn't true everywhere. In Europe, coal is being phased out, and the U.K. closed its last coal power plant this year.
The U.S. has been headed along the same trajectory as Europe. Coal plants have been closing for years, and coal's share of electricity-generation fell to 16% last year from 52% in 1990.
The decline in coal use has brought environmental benefits. Most of the progress the U.S. has made on reducing greenhouse gases over the past decade has come because coal power plants were replaced by natural gas plants, or wind and solar fields. About 200 coal power plants remain.
The Biden administration had finalized a series of Environmental Protection Agency rules this year that would force the plants to add new devices to capture emissions before they are released into the air. Experts predicted Biden's rules would have gradually forced many of the remaining coal plants out of business.
But Trump has said he would reverse those rules.
"I am announcing today that when I return to the White House, I will end this anti-American energy crusade and terminate Kamala's so-called Power Plant Rule," he said at a rally in August.
Some investors think Trump's election will lead to a coal boom.
"The election heralds a new era for coal production and use in this country," wrote David Allen, founder of Octane Investments and manager of the Octane All-Cap Energy Value ETF. "The recently promulgated EPA rule accelerating the closure of coal plants will likely be removed in January, and companies that produce thermal coal should enjoy a sharp revaluation."
Write to Avi Salzman at avi.salzman@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
November 06, 2024 19:14 ET (00:14 GMT)
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