President Obama’s re-election win sparked a sharp sell-off in coal, gas and oil stocks Wednesday.
During the presidential campaign, Republican challenger Mitt Romney said Obama had waged a war on the coal industry during his first term. The reality is more nuanced. Coal production has dropped swiftly, but that’s due to a mix of factors, including a U.S. natural gas boom that’s made gas a compelling energy alternative. The recession has also dampened demand.
The coal industry will see more regulations take effect in 2015, but many of those rules were written before Obama took office. A second Obama term will likely make coal exploration and combustion more expensive over the next four years, as experts expects he will be even tougher on the coal industry.
Investors had been holding out hope that a Romney win would be a boon for the industry, since many felt he would try to find a way to untangle some of those regulations.
“Romney was quite clear about the need for coal use and coal exploration, while Obama is viewed as more friendly toward environmental regulations,” said Dan Greenhaus, chief global strategist of BTIG.
Read more at CNN Money. By Maureen Farrell.