According to BP (NYSE: BP), the fastest-growing fuel in the world is coal. Yes, despite the White House’s war on coal, last year it had the biggest share of demand worldwide since 1970.
From China to Germany, coal’s use is expanding, not contracting. Consumers are choosing cheap fuel over reducing greenhouse gases. It is that simple.
Developing nations drove most of the increase in demand, which was 3% last year. Natural gas saw only a 1.4% increase in demand and that is down from the historical average of 2.6% growth.[ad#Google Adsense 336×280-IA]And coal’s share of worldwide energy use hit 30.1% last year. Oil is only 32.9%.
Coal is 67% of China’s energy demand, and that is the lowest on record for the country.
As we all know, coal is the dirtiest fossil fuel, but it is not going anywhere, and that means the beating coal stocks and bonds have taken here at home is a gift in disguise.
Take your pick, from the most secure, Peabody Energy (NYSE: BTU); to the riskiest, Walter Energy (NYSE: WLT); to the middle of the road, Alpha Natural Resources (NYSE: ANR) or Arch Coal (NYSR: ACI). This may be one of the best buying opportunities since February 2008.
The White House’s war on coal has driven prices way down. But the world’s increased demand for it has made this unloved fossil fuel a hot commodity. Excuse the pun.
Just don’t go hog wild with this one. These are still considered speculative plays, and the road back will be filled with bumps and bruises… but they will be back. It is just a matter of time.
Source: Investment U