Posco (PKX) (PVR) (ARLP) (WLB) (AHGP) Futures Look Bright as Coal will Predominate for Years

Coal demand should provide good returns for coal companies like Posco (NYSE:PKX), Penn Virginia Resource Partners (NYSE:PVR), Alliance Resource Partners, (NASDAQ:ARLP) Westmoreland Coal Company (AMEX:WLB), and Alliance Holdings GP, (NASDAQ:AHGP) for some time to come.

While the stories of the demise of coal have been going on for decades, a new report from the U.S. Energy Information Administration called the “Annual Energy Outlook,” again asserts coal will decline substantially over the next 25 years, although it seems a lot of things will have to happen almost perfectly for that to be the case.

But if there is a significant dent made in the demand from coal, it'll more than likely come from natural gas, not from the expensive and unreliable sources like wind turbines and solar energy. At this time so-called renewables supply about 11 percent of electricity in America.

If the past is any indicator, the projections of coal replacement are far too optimistic, and it is certain it will be a major part of electrical generation for decades.

Coal suppliers should continue to do well for years as coal demand continues, but it will probably be at a slower rate than in the past, and the amount of supply of metallurgical coal by a company will determine a lot of the success of each individual firm.