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You can call it a war on coal or an effort to stop global warming, but whatever it is, it's a death blow for a coal industry that was already reeling.

President Obama has directed the EPA to come up with a detailed draft proposal to limit coal-fired carbon emissions by June 2014. Obama expects to sign a finalized version one year later.

During his first term, Obama created regulations for newly built coal plants, piling on a fuel that was already being undermined by historically low natural gas prices and slack demand. But now he's really pouring it on.

Obama's target to cut greenhouse gas emissions 17% from 2005 levels by 2020 would require a 21% reduction in coal-fired generation if the most efficient natural gas-burning plants take their place. And a 13% cut in coal if renewables or conservation replace that power supply.

That's terrible news for coal, which was already limping.

After peaking at $120 per metric ton in 2011, Newcastle coal - the benchmark for power station or thermal coal - slumped 7.5% in the second quarter to $81.20. It won't get past $90 for the rest of the year.

Environmental regulations aren't the only thing chipping away at the fuel, either. A huge coal glut has developed as emerging markets scaled back consumption.

Slower economic growth has led to a significant drop in steel production, vastly reducing the demand for coking coal. And with natural gas production rising to unheard-of levels in the United States, coal has been forced into the backseat by a fuel that's both cheaper and cleaner.

Meanwhile, production has increased in Asia and Australia, resulting in an oversupply. Indeed, coal supplies are forecast to rise at least 30 million metric tons this year, as production rises and demand declines.

Things are looking so bleak right now that coal might be considered the ultimate contrarian play. However, such a play would have a very short shelf life, since the fuel's relevance is fast eroding.

If you're really looking to profit, you should take a long-term view and focus on the companies that will profit from coal's ultimate demise.

In that case, these are the companies you would consider…

The Best of Both Worlds

One company we've been high on for a long time is Exelon Corp. (EXC).

Exelon is the largest operator of nuclear power plants in the United States, producing 20% of the nation's atomic power supply. That alone is compelling, because nuclear is one of the cheapest forms of energy, and the cost of coal-fired electricity is rising rapidly as regulations tighten.

But that's not all. Nuclear only makes up 55% of Exelon's power generation capacity. Natural gas accounts for 28%. The remainder comes from other renewable sources - including 44 wind power projects.

So it comes as no surprise that Exelon would benefit from Obama's latest push to marginalize coal. In fact, it's something that the company has been pushing for for years.

Exelon's former Chief Executive Officer, John Rowe, was a vocal proponent of climate legislation, often flying to Washington to lobby elected officials. During his tenure, Exelon left the U.S. Chamber of Commerce because of a disagreement with a business group's global warming policies.

Furthermore, in the past two years, the company's political action committee, Exelon Pac, has directed top contributions to legislators who advocate wildlife refuge protection and clean energy policy.

That's exactly what it's getting.

The Next Era

Another beneficiary is NextEra Energy (NEE).

NextEra is the nation's largest producer of renewable energy. And it's the largest owner of wind and utility-scale solar energy projects in North America.

With wind projects in 19 states and four Canadian provinces, the company produces more than 10,000 megawatts (MW) of wind power - enough energy to satisfy a city the size of Chicago.

And that figure will continue to grow with the kind of government backing that's absent from the coal industry.

NextEra already benefits from many wind production tax credits, which have helped wind power production double since 2009. And a recent Congressional approval pushed wind power projections up 34% for the next three years.

NextEra is also the biggest solar power company in the United States, with 320 MW of solar power-generating capacity. And it could add a whopping 750 MW more in one fell swoop if its proposed McCoy solar energy project in California gets finalized.

The massive 4,400-acre McCoy project could provide electricity for 264,000 homes, and would avoid about one million tons of carbon dioxide emissions that would come with fossil fuels.

NextEra stock is already up 16% this year as alternative energy stocks have gained momentum, and it also boasts a lofty 3.28% yield.

General Partners

Finally, there's General Electric (GE).

GE is one of the world's leading wind turbine suppliers. In fact, just last month, the company revealed its latest 1.7-MW turbine model - and NextEra promptly snatched up 59 for a new wind farm.

And in its latest annual report, General Electric cited increases in wind turbine sales as the primary reason for a 10% uptick in its Power & Water division sales.

But that's not all.

The conglomerate has been on a mission, building up its oil and gas arm through $11 billion in acquisitions. That includes the recently announced purchase of oil and gas equipment supplier, Lufkin Industries (LUFK), for $3.38 billion.

This is important because natural gas, rather than alternative forms of energy, has really been the fuel that's ousted coal. While coal's share of U.S. energy production has dropped to about 37% from more than 50% a decade ago, natural gas has seen its market share surge from 18% to 30% in that time.

And just like alternative energy companies, GE has the president's backing. In fact, the company figures prominently into Obama's plans.

During his visit to Africa last week, the president discussed an initiative called "Power Africa" - a program through which the U.S. government will invest $7 billion to help bring electricity to Sub-Sahara Africa.

According to the White House statement on Power Africa, "General Electric commits to help bring online 5,000 MW of new affordable energy through provision of its technologies, expertise and capital in Tanzania and Ghana."

This investment is already under way. Last month, GE signed a deal with the government of Ghana to build a 1,000-MW natural gas power plant. The plant will be fueled by gas from the Jubilee field off the country's coast.

So given its position as a major player in both alternative energy and oil and gas drilling supplies, GE has a significant presence in the energy market. And it's obviously on Obama's good side.

So GE, along with Exelon and NextEra, has a lot to gain as coal falls by the wayside.

And "the chase" continues,

Source: 3 Stocks That Will Profit From Obama's War On Coal