King Coal and industry multinational Peabody Energy (BTU) have taken a beating in the markets lately, and it has some executives in the dirty energy industry freaking out.
On September 19, Dow Jones removed Peabody Energy from its S&P 500 index, considered a list of the premier U.S. stocks for investors. The St. Louis Post-Dispatch cited the downward trajectory of the company's market capitalization as the rationale behind the ouster of Peabody from the S&P 500 index. Peabody will now join the JV leagues in the S&P MidCap 400.
Peabody's downfall symbolizes ongoing market trends within the coal industry overall.
“The total market value of publicly traded U.S. coal companies has rebounded slightly in recent months, but remains nearly 63% lower than a total of the same companies at a near-term coal market peak in April 2011,” explained SNL Energy in April.
“A perfect storm of factors, including new federal regulations impacting coal-burning power plants, cheap competing fuels, railroad service issues and weak global markets has kept pressure on a number of coal operators since the industry's 2011 near-term peak.”
A new study published this week by the Carbon Tracker Initiative — best known for its work accounting for a “carbon budget” and unburnable carbon — raises further questions about the future of coal's global market hegemony. It's another blow to the coal industry as the United Nations convenes this week's Climate Summit in New York City to discuss climate disruption, in no small part driven by antiquated coal-fired power plants.