Postby Hammer » Thu Aug 09, 2007 1:26 pm
NEW YORK (Reuters) - An across-the-board downgrading of U.S. coal company stocks by a Citigroup Inc. analyst is the latest victory in a fight against plans for new coal-fired power plants, environmentalists said.
Citigroup analyst John Hill downgraded coal company stocks across the board in a report this week, saying that expected U.S. greenhouse gas regulations on coal, which emits more of the main heat-trapping gas carbon dioxide than any other fuel, paint a bleak outlook for the sector.
Downward pressure on stock prices by a current U.S. coal oversupply could last for more than a year, he wrote. If that happens it could coincide with 2008 presidential campaign politics, in which a national plan to limit greenhouse emissions is expected to figure prominently.
"Election politics are likely to turn progressively more bestial for coal," Hill wrote. Candidates from both major parties favor putting national limits on greenhouse gases.
Environmentalists, who have recently helped block plans for coal plants, seized on the comments as an indication of harder times ahead for companies that produce the fuel.
"This is a clear, forceful signal from Wall Street that the coal industry is failing to innovate in addressing the urgent problem of global warming," Vicky Patton, a lawyer for Environmental Defense, wrote in an e-mail.
The Department of Energy says utilities plan to build about 150 coal-fired power plants. But coal companies have recently suffered a string of bad news from the top three most populous U.S. states.
California passed a global-warming law halting the building of coal-fired plants, as well as a ban on imports of power generated in other states that does not meet emissions standards.