New York, NY -- There is an accelerating wave of news from the financial markets strongly suggesting that our efforts to slow down and stop the coal rush may be nearing a tipping point. The front page of today's Wall Street Journal carries the headline: "Coal's Doubters Block New Wave of Power Plants."
The story reports that in addition to the widely publicized cancellations of the TXU plants in Texas, "Recent reversals in Florida, North Carolina, Oregon and other states have shown coal's future prospects are dimming. Nearly two dozen coal projects have been canceled since early 2006, according to the National Energy Technology Laboratory in Pittsburgh, a division of the Department of Energy." (The Sierra Club's "Stop the Coal Rush" campaign and chapters were involved in all of these victories, as well as others in Kansas, Kentucky and Illinois.) The article goes on to point out that, "It's hard to say how many proposed plants will never be built. Some projects suffer public deaths when permits are denied. Many more simply wither away, lost in the multiyear process of obtaining permits, fending off court challenges and garnering financing."
The Journal was merely reporting a reality that investors had already experienced. When Florida Power and Light's Glades plant was turned down by state regulators, FP&L's stock price slumped by 2.5 percent, for a loss in market capitalization of more than a half billion dollars. T. Boone Pickens reportedly unloaded most -- but not all -- of his coal stocks a few months ago. A week later, major Wall Street investment advisors moved coal stocks from "buy" to "hold", and as a result Peabody coal stock slumped by 2.2 percent. Then, on Tuesday, Peabody announced that its earnings in the second quarter were down, and that it was facing rough sledding in the future, and the stock tumbled another six percent.
So even an attentive and savvy investor like Pickens is having a hard time keeping ahead of the collapse in coal. The 500,000 shares of Peabody he kept a few months ago have lost eight percent of their value in a week, 16 percent over the last few months. That's a loss of $4 million.
We may just have launched a virtuous cycle in which, by blocking and slowing coal plants, we not only cancel the plants we fight, but dry up funding for the remainder, and free up investment capital for renewables, efficiency and gas -- exactly what we set out to do this January when we decided that capital markets, not Congress, would be the Sierra Club's big 2007 target.