U.S. coal stocks fall; exit from climate deal may hurt, not help
U.S. coal company shares dipped alongside renewable energy stocks on Wednesday after reports that President Donald Trump plans to pull the United States from a global accord on fighting climate change. The market reaction reflects concerns, raised by some coal companies in recent months, that a U.S. exit from the Paris Climate Agreement could unleash a global backlash against coal interests outside the United States. Peabody Energy , the largest publicly traded U.S. coal company dropped 2.2 percent to $24.29 a share, while Arch Coal fell 0.4 percent to $70.77. A spokesman for Peabody said the company would support a decision by Trump to withdraw from the Paris deal because the “accord is flawed on a number of levels.”
Cloud Peak Energy Inc had also urged the Trump administration to stay in the Paris deal to prevent other nations from an aggressive turn against the global coal industry. Its shares were down 0.6 percent to $3.39.
A spokesman for Cloud Peak declined to comment.
A source briefed on the matter told Reuters that Trump is planning to follow through on his campaign pledge to pull the United States out of the Paris accord, a move designed to help boost domestic energy production and speed economic growth, after weeks of deliberations on the issue. Trump did not confirm the decision, but said he would make an announcement “over the coming days”.
CAMPAIGN PLEDGE
A U.S. withdrawal would come over the objections of scores of big U.S. corporations – from Wal-Mart to Exxon Mobil – worried the move will complicate the business landscape instead of bolstering the economy. “For us, our position on the Paris agreement… we need a framework like that to address the risks of climate change,” Exxon Mobil Chief Executive Officer Darren Woods told reporters on the sidelines of the company’s annual general meeting on Wednesday. Exxon had made that case in a recent letter to the White House, he said. Exxon dipped 0.7 percent, ConocoPhillips declined 0.2 percent, and Chevron Corp fell 0.6 percent. Crude oil prices fell to a three-week low on news that recovering Libyan output boosted OPEC crude output in May. Solar energy shares also got hit on Wednesday, with First Solar Inc down 2.5 percent, and SunPower Corp each down 3.4 percent.
“Regardless of what the President decides on the accord, we expect America’s solar industry to continue to thrive and create jobs, boost the economy and reduce greenhouse gas emissions,” the Solar Energy Industries Association said in a statement.
Shares of Tesla Inc , which recently acquired SolarCity, were up 1.8 percent at $341.01.
Tesla CEO Elon Musk said in a Twitter post on Wednesday that he had done “all I can” to convince Trump to stay in the Paris accord, and threatened to leave White House advisory councils if Trump announces a U.S. exit. Trump campaigned on a promise to unravel Obama-era climate regulations to help boost domestic oil, gas and coal production. Company executives, economists, and analysts have expressed skepticism, however, that his deregulatory agenda can alter existing trends away from coal.
U.S. carbon emissions have declined to near 30-year lows, a trend driven by increased natural gas use replacing coal. The VanEck Vectors Coal exchange-traded fund fell 1.2 percent to $12.71, not far from a five-month low hit earlier in May. The ETF is on track to fall 7.2 percent this month after rising in the first three months of the year as part of the so-called Trump trade.
Source:Reuters
