The Southern Company (SO), Arch Coal Inc (ACI): Breathe Easy. Natural Gas Is Lowering CO2 Emissions.

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However, some coal producers, such as Cliffs Natural Resources Inc (NYSE:CLF) and Peabody Energy Corporation (NYSE:BTU), fared relatively better due to the type of coal produced and the location of their operations.

Cliffs Natural Resources Inc (NYSE:CLF)’ savior was its focus on metallurgical coal – the varietal used primarily in steel production – which traded at a significant premium to thermal coal. Still, the company was forced to sell its stake in Sonoma Coal last year, as even metallurgical coal saw a sharp drop-off in demand. For Peabody Energy Corporation (NYSE:BTU), a relatively robust foreign export market buoyed profits, as the company benefited from its dominant presence in Australia and the broader Asia-Pacific market.

Final thoughts
Falling carbon dioxide emissions are great news, especially considering the resurgence of the climate change debate precipitated by the Keystone XL discussion. However, with natural gas prices on the rise and coal prices still depressed, the coal-to-gas switching trend is expected to decelerate. It will be interesting to see what impact this has on the level of emissions this year.

The article Breathe Easy: Natural Gas Is Lowering CO2 Emissions originally appeared on Fool.com and is written by Arjun Sreekumar.

Fool contributor Arjun Sreekumar has no position in any stocks mentioned. The Motley Fool recommends Southern Company.

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