Xcel Energy Inc (XEL), Arch Coal Inc (ACI), Cloud Peak Energy Inc. (CLD): Why the EPA Rules Won’t Change Coal’s Outlook

Arch Coal Inc (NYSE:ACI) has port issues to deal with, too. That said, port construction looks likely to coincide well with the building schedule for the world’s new coal-fired power plants over the near term.

The oddball and hope

Interestingly, on Arch Coal’s map of new coal-plant construction, the United States tops it. That’s because The Southern Company (NYSE:SO) is, as you read this, building a highly advanced coal plant. That said, the plant has blown past cost projections, resulting in charges of $0.70 a share in the first half of the year. So investors are taking the brunt of the hit here.

Still, the plant has some of the most advanced features, including carbon dioxide capturing technology, that should allow it to meet the projected EPA standards, though it won’t be affected by the new rule. In fact, Southern expects the plant’s carbon dioxide footprint to be similar to an equal sized natural-gas fired plant. While the expense has been hefty, particularly for shareholders, Southern’s project could set the standard for a domestic coal-plant renewal down the line.

The rumor mill

The EPA’s emissions rules for new power plants are just rumor and conjecture right now. That said, they won’t change the existing domestic trend toward other fuel sources or the global trend toward increased coal use. So you shouldn’t get too caught up in the media hype about the death of coal. In fact, The Southern Company (NYSE:SO)’s new coal plant might actually hold the clues to a far more positive future.

The article 4 Reasons Why the EPA Rules Won’t Change Coal’s Outlook originally appeared on Fool.com and is written by Reuben Brewer.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Southern Company.

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