Big Coal vs Big Banks

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Big Coal vs Big Banks
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Banks Excluded from Doing Business with the State

Despite the headlines, West Virginia is not kicking Wells Fargo and the rest out of the state. But they are taking steps to exclude these folks from the state’s business with the exception of their pension funds for the time being. Their complaint is that JPMorgan, Morgan Stanley, Black Rock, Goldman Sachs, and Wells Fargo have cut back on financing coal operations. The West Virginia state treasurer now has the power to ban anyone from doing business with the state if they are seen to be “boycotting fossil fuels.”

Follow the Money and the Profits in the Utility Industry

The political side of the argument about coal is that environmental regulations are hurting the industry. The financial side of the argument is that from 2007 to the present the percentage of American homes getting their electricity from coal-fired power plants has fallen by 55%! The industry is switching to renewable sources of energy and to natural gas. The first reason is that natural gas prices fell by roughly sixty percent from 2003 to the present due to improvements in horizontal drilling and hydraulic fracturing which allow for more efficient extraction of natural gas from shale deposits. Second, gas-fired plants can come up to full power more quickly than coal-fired plants when demand peaks. This makes a gas-fired plant more profitable than a coal-fired plan even when the cost of coal versus gas is factored out.

The Environmental Argument Against Coal

Global warming is the argument that gets all of the press when it comes to coal and other fossil fuels but the emission of mercury, nitrogen oxides, sulfur dioxide, and soot (AKA particulate matter) are of more immediate concern and reasons that regulation is unlikely to go away. Thus, until someone comes up with cheaper and cleaner ways to use coal to generate power it is likely to keep sliding no matter what the State of West Virginia does to big banks and others who, for financial reasons, choose not to finance coal operations.

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CEO TOPGUN Options, chairman & founder No Fallen Heroes Foundation, ONN.tv founder and CEO, Former F/A-18 USN fighter pilot, TOPGUN (adv) graduate. Father of 3.

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Matthew "Whiz" Buckley

Matthew "Whiz" Buckley

CEO TOPGUN Options, chairman & founder No Fallen Heroes Foundation, ONN.tv founder and CEO, Former F/A-18 USN fighter pilot, TOPGUN (adv) graduate. Father of 3.