Coal's Cloud Peak (CLD) (NRP) (ANR) (ASX:MCC) Poised for Soaring Coal Demand

Soaring coal demand around the world should drive up the share prices of many companies with significant exposure to coal like Natural Resource Partners (NYSE:NRP) Alpha Natural Resources (NYSE:ANR), Macarthur Coal Ltd. (ASX:MCC) and Cloud Peak Energy Inc. (NYSE:CLD).

When it comes to coal don't listen to the snake-oil salesman from the mainstream media who attempt to paint coal as a dying industry, when in fact it's poised for an unprecedented upward move in demand as emerging markets and developing markets clamor for the energy source.

The two obvious candidates for just about everything - China and India - are behind the demand for coal of all types (thermal and coking), but the developing world is also looking to make up for shortfalls.

Most coal companies and companies with exposure to coal will benefit from this long-term trend, especially those in the United States, who are looking to expand beyond its domestic market, where demand is being artificially constrained by the government.

The coal in demand has high energy content (a particular strength in the U.S.) where coal has significant sulfur in it.

Climate change hucksters have been pressuring the radical Obama administration to cut back on coal domestically while just about everywhere else it's in huge demand.

This has even led former Microsoft CEO Bill Gates to say alternative energy sources like solar and wind are a "cute" idea, but will do little if anything to assuage the energy needs of the world.

He's referring to the billions of people in need of electricity and how sources like coal will be used for a long time into the future. He sees nuclear as being the more viable alternative than the anemic results coming from wind, power and geothermal sources.

In the short term demand from Japan will also make a big increase in demand for coal as it seeks alternative energy sources as it rebuilds the nation.

China is expected to import about 70 million tons of coal in 2011 while India will import about 60 million.

Thermal coal, which is used to generate electricity, is expected to surge in demand in 2011 to over 7 billion tons.

Recently Peabody Energy CEO Greg Boyce said investors that over the next decade coal will generate more electricity than "gas, oil, nuclear, hydro, geothermal and solar combined."

For coal companies based in America, their challenge is infrastructure related, where railroads and ports will be pressed to push through enough coal to meed surging demand.

According to Arch Coal President John Eaves, "It's something unprecedented in human history, arguably, 3 billion people going through an industrial revolution at the same time," referring to the possibility of about 11 percent (35 gigawatts) of coal-fired U.S. capacity being shut down over the next decade, while at the same time 249 gigawatts of new coal-fired power plants are being constructed around the world.

He sees close to another 800 million tons of new coal needed to supply the growing needs, in addition to what is already being supplied.

So when you read the next media report about the decline of the coal industry, take it with a grain of salt. The old energy source is becoming the next big thing, and will remain that way for decades.

Some will say that coal is back, but the fact is it never went away.

Well-run coal companies should grow for many years into the future. It is a long-term play, not something that will be volatile and experience huge swings on a day-to-day basis like silver can.

Cloud Peak (CLD) closed Friday at $19.97, down $0.96, or 4.59 percent.