3 Unlikely Energy Stocks Investors Are Overlooking
I hate coal.
But this really shouldn’t be news to you; my veteran readers have known my bearish sentiments over the coal industry for years.
Don’t get me wrong — you won’t see me with a picket sign anywhere, nor will you see me marching on the steps of the Capitol calling for a complete and immediate ban on coal production.
Remember, for all the hate and derision thrown at the coal industry, it still supplies nearly one-third of our electrical generation.
No, my disdain for black gold isn’t driven by emotions.
Yet the death of the coal sector does seem inevitable at this point, doesn’t it?
Just take a look at the average age of our coal generation, and it’s not hard to make the case that coal peaked during the 1970s and 1980s:
Or maybe seeing the decline in coal consumption over the last decade will sway you against the world’s dirtiest energy source:
Either way, a glance at these charts would have most investors making a beeline for natural gas and wind and solar stocks, which have accounted for the lion’s share of the growth in U.S. electrical generation since the year 2000.
Most investors... except Christian DeHaemer.
You see, my colleague has a knack for taking the contrarian view; it’s in his blood.
When it comes to the dirty coal sector, we’ve never seen eye to eye.
So naturally, when I see a crisis like this brewing for coal companies, he digs around for just the right investment opportunity.
And what’s more unbelievable to me is that he found it.
This is what he told me...
China’s Coal Conundrum
Look, there’s no getting around the fact that coal is arguably the dirtiest source of energy on the planet.
However, it’s also one of the most widely used.
Chris pointed this out nearly a year ago... were you listening?
Wall Street certainly wasn’t.
In fact, some countries are shackled to their coal power.
Coal supplies over 90% of South Africa and Poland’s electrical generation.
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India’s coal sector supplies 75% of the country’s electricity.
Yet China is the elephant in the room that we need to be talking about.
The Middle Kingdom relies on coal for more than two-thirds of its power generation.
And that, dear reader, is what Chris’ readers are taking advantage of right now.
Despite the rhetoric from China that the country is on the verge of ditching fossil fuels, you can’t help but wonder if that’s more of a pipe dream.
Back in 2017, the National People’s Congress released their vision for China’s development between 2016 and 2020. It was a blueprint for China’s future, and it was supposed to be built on the back of wind, solar, and hydro.
Part of the 13th Five-Year Plan involved canceling or postponing a total of 150 gigawatts of new coal capacity.
Yet there’s a little catch here that most people miss.
By 2040, China’s coal-fired generation will still account for half of its electricity.
The problem is that China’s coal production is in serious trouble.
3 Unlikely Energy Stocks Investors Are Overlooking
Last week, Reuters reported that China’s National Energy Administration warned that it was cutting production by 20% at coal mines at risk of bumps, which happen when rock and coal erupt inside a mine shaft due to the pressure from overhead rock.
A recent accident in the northeast Jilin province killed nine miners and injured 10 more.
To give you a little more perspective on this, approximately 400 million tonnes of China’s coal mining capacity are at risk.
Considering that 80% of global coal consumption comes from Asian countries, cutting production means they’ll be turning toward imports for supply.
Well, it just so happens that the U.S. still has plenty of it.
In 2017, U.S. coal exports to Asia jumped by more than 60%.
This situation will turn even more bullish going forward.
Forget the trade war; China needs the high-quality coal that’s extracted in the United States.
Earlier, I mentioned that Chris had found a perfect set of investments hidden in the U.S. coal sector that are taking full advantage of this situation.
More importantly, Wall Street still hasn’t caught on.
Just one of these U.S.-based coal stocks is paying a solid 12% annual dividend to shareholders.
But I want you to see this one for yourself.
Let Chris lay out the full details behind these grossly overlooked coal profits for you right here.
Until next time,
A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.
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