Investing Daily

While the US coal market is far from dead, the international coal market is positively booming. Here's how to profit.

Coal-fired power plants still produce roughly half of America’s electricity, however. Mr. Obama’s clean coal push is a tacit acknowledgement that achieving energy independence without it is literally impossible, even with an unprecedented effort in renewable energy and energy efficiency.

To be sure, there is a war being fought over coal. But contrary to the fears of many, the goal of the president and his new administration isn’t to kill coal. Rather, it’s to harness the power of science, armed with the financial power of government, to clean up coal.

When I boarded the plane for Tokyo, I expected focus of this year’s Group of Eight (G8) Summit in Hokkaido, Japan, to be alternative energy. Although we’ve certainly made money in alternatives, I see this as a highly limited solution for rising energy prices and environmental concerns.

Some cynics will argue that the annual G8 Summit is nothing more than a chance for world leaders to eat and drink well in a scenic resort area.

All three major indexes posted weekly declines. The Nasdaq Composite was the biggest loser, down 2.1 percent. The S&P 500 lost 1.3 percent, and the Dow Jones Industrial Average declined 0.5 percent. It was also a brutal first half. The Dow slipped 14.4 percent, the Nasdaq gave up 13.8 percent and the S&P 500 shed 12.8 percent.

With oil cruising above $140 per barrel and natural gas at its highest levels since late 2005, it’s hard to imagine that there could be any energy-related sectors that aren’t flying higher.

Coal is public enemy No. 1 for most environmental activist groups. Certainly, there’s some logic behind that opposition; after all, coal plants emit more sulphur dioxide, mercury and nitrous oxides than other fossil fuels.

On April 7 and 8, I attended the annual Energy Information Administration (EIA) conference in Washington, DC. The conference was expanded this year to a celebration of the agency’s 30th year as the statistical arm of the US Dept of Energy.

Back in March, the Bank of Canada (BoC) statement announcing a 50-basis-point interest-rate cut told of “clear signs that the US economy is likely to experience a deeper and more prolonged slowdown than had been projected in January.”

Now isn’t the time to speculate about the direction of crude oil prices. Instead, we need to focus on sustainability. Which market sector is most likely to make it if, or when, we head into recession?

We’ve had another week of almost manic ups and downs in the markets as investors digest both good news and bad on the economic front as well as from companies.

A year ago, few investors wanted anything to do with the coal markets. Inventories of coal at US utilities were tight at the end of 2005, but a warm winter in 2005-06 changed all that: Inventories ballooned, and coal prices plummeted.

The US is often called the Saudi Arabia of coal. And there’s a good reason for that: The nation has more than 27 percent of the world’s known coal reserves and some of the highest-quality deposits in the world.

Forget oil: Coal is the world’s fastest-growing source of energy. Coal’s importance as a global energy commodity is growing, even as oil’s dominance gradually fades.

The US is often called the Saudi Arabia of coal. And there’s a good reason for that: The nation has more than 27 percent of the world’s known coal reserves and some of the highest-quality deposits in the world. That’s 90 billion metric tons more than Russia, the nation with the second-largest reserves.

Although the price of crude continues to rise, other sectors in the energy patch haven't necessarily fared as well. But the outlook is positive for coal miners as we gear up for more normal winter temperatures this year, and international drilling is still going strong.

China is both the world’s largest coal producer and its preeminent consumer. In 2006, Chinese coal production totaled more than 1,200 million metric tons of oil equivalent, and output has been growing rapidly in recent years. China’s coal production is nearly double what it was at the beginning of this decade...

Asia's booming demand for energy is a major driving force behind all sorts of commodities, including oil, natural gas and coal.