Calls from Wall Street analysts downgrading stock in coal companies this week can be traced in part to a multitude of recent defeats the coal industry has received at the hands of Earthjustice, the environmental law firm. In June, Earthjustice succeeded in stopping a huge new coal-fired power plant planned for central Florida. This victory over the “landscape-disfiguring global warming bad-guys”, a term used by Citigroup analyst John H. Hill, was closely followed by withdrawal of a permit application by a second Florida group seeking to build a coal plant and a climate summit at which Florida charted a new energy future not based on coal.
Today, coal stocks were down for a second day. HSBC cut its rating of the sector on Tuesday. Citigroup followed Wednesday, downgrading the sector from “Buy” to “Hold.”
Earthjustice has also been active in opposing a proposed, federally underwritten, coal plant in Great Falls Montana. The federal agency underwriting the plant, the Rural Utility Service, plans to underwrite an additional seven dirty coal power plants in other states. A victory in an anticipated Earthjustice lawsuit challenging the federal financing of the Great Falls plant would likely affect federal subsidies for other plants as well.
Earthjustice has also been active in challenging proposed coal plants in Kansas and New Mexico.
Earthjustice Vice President Trip Van Noppen said, “Coal stocks are tumbling in advance of virtually certain government controls on power plant carbon emissions that will make it more expensive to burn coal. Energy investors and Wall Street now understand that coal plants are not the path to addressing global warming. As government controls are phased in and consumers make clean energy choices, the coal industry will find it increasingly difficult to compete. Smart investors are leading the way on this and moving to a wide range of renewable technologies.”