Coal Producers Getting Burned by Switch to Natural Gas
Atlanta Journal Constitution - The coal industry is in deep trouble, and Southern Company's decision to buy an Atlanta natural gas utility puts it even deeper in the hole. Read
For years, coal producers have been taking it on the chin as electric utilities have closed more and more coal-fired power plants and switched to cheaper, cleaner-burning natural gas.
The situation was made worse when coal shipments to the once-voracious Chinese market slowed.
"You can see it across the industry," said Kristoffer Inton, an investment analyst who covers the coal industry for Morningstar in Chicago. "Neither the domestic situation nor the international situation looks good for coal."
Coal producers' revenues have dropped 25 percent or more in three years and profits have disappeared, he said.