Paris Climate Summit Consequences Impacting The Coal Industry

Keith Williams profile picture
Keith Williams


  • Fossil fuels can be exploited for >30 years (rise > 2C) or >10 years (for 1.5C); less than 20% identified fossil fuel resources can be exploited.
  • China to spend $4.6 billion to close 4300 coal mines and reduce annual capacity by 700 million tons within 3 years.
  • In India Adani freezes investment in Australian mega-mine until coal recovers.
  • US at war with itself about the Obama Administration’s programs.
  • German think tank proposes exit from coal by 2040; critical SE Asian country Vietnam reconsidering coal.

The enthusiasts for Peabody Energy (NYSE:BTU) are in a bit of a frenzy about how the company plans to address debt. Excellent work is being presented in SeekingAlpha covering various scenarios. However, the context for these ruminations is that the BTU share price has almost halved (again) from $6.67 at the start of 2016 to $3.36 now. While the fall was in part due to Arch Coal filing for bankruptcy and a pretty mad start to the year, my take on this is that there are other major factors involved with the savaging of coal stocks. Indeed some readers have asked in response to optimistic SeekingAlpha articles "Are we missing something?" I think the authors of enthusiastic articles on BTU are indeed overlooking the elephant in the room.

There is a still a lot of bravado about the agreement reached in Paris in December 2015 by 195 countries to end fossil fuel emissions. Some regard it as a bit of a joke, while other authors on SeekingAlpha, including prolific author Courage and Conviction, act as if Paris didn't happen.

It is very important for investors to make their judgments about this matter because, although coal was not mentioned in the Paris agreement, if the goals agreed to get implemented, this will signal the demise of the coal industry.

What the Paris agreement means in terms of exploitable assets

Fossil fuel giant Engie (that is switching to solar PV) has summarized conclusions reached at the Paris conference.

Two key conclusions of relevance to this article are :

· It confirms the prime objective of containing global temperature increase to below 2°C relative to preindustrial levels, and calls for the most energetic efforts to be made to contain the rise to 1.5°C

· In terms of reduction, the 'global emissions ceiling' must be reached 'in the

This article was written by

Keith Williams profile picture
Keith began his career as a research scientist (developmental biology, biochemistry, molecular biology) at the Australian National University, University of Oxford (UK), the Max Planck Institute for Biochemistry (Munich, Germany) and finally Macquarie University (Sydney) where he held a Chair in Biology and established the Centre for Analytical Biotechnology. Pioneering the area of proteomics (with Marc Wilkins in his group coining the term), Keith established the world’s first government-funded Major National Proteomics Facility (Australian Proteome Analysis Facility) which was involved with industrialising protein science. Keith left academe with his team to found Proteome Systems Ltd in 1999 to commercialise proteomics. The company had a strong focus on intellectual property, engineering/technology and bioinformatics. As CEO he led the company to ASX listing in 2004. Since 2005 Keith has been involved in new business development in biotech, e-health and other emerging technologies. Keith sees climate change and sustainable development as a major issue for humankind and also a major business disruptor/risk and opportunity. Keith holds a Bachelor Agr Science from the University of Melbourne and a PhD from the Australian National University. He is a Fellow of the Australian Academy of Technological Sciences & Engineering and received an AM (Member of the Order of Australia) for services to the Biotechnology Industry. He has received various industry awards including an Innovation Hero Medal from the Warren Centre for Advanced Engineering. With 300 scientific papers and many patents written, Keith has a clear view of innovation in the Biotechnology and Climate/Renewable Energy space. He is not a financial advisor but his perspective adds relevance to decision-making concerning feasibility and investment in technology innovation.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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