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It may be something of an understatement to say that 2014 was a tough year for the coal industry. U.S. coal consumption rose a little this year, but exports dropped a lot and prices were not much better than flat. The good/bad news is that 2015 looks to be pretty much a repeat of this year.

Low prices were not the only significant headwind the industry faced in 2014. Rail transportation of coal has been hit hard by increased rail deliveries of crude oil. Power plant operators have implemented just-in-time inventory management, which keeps stockpiles low. The operators have also gone more often to the spot market, holding back on long-term contracts at fixed prices. None of these headwinds is expected to stop blowing.

According to the U.S. Energy Information Administration (EIA), coal exports declined from 118 million tons in 2013 to 96 million tons in 2014. In 2015, the EIA is forecasting exports of just 83 million tons, the lowest level since 2010.

Coal sold for $2.39 per million BTUs in 2011 and dropped to $2.35 in 2013. For both 2014 and 2015, the EIA projects coal will sell for $2.36 per million BTUs.

Perhaps the worst news of all is that power sector coal consumption, which rose 1.2% in 2014, is expected to drop by 0.4% in 2015 as additional coal-fired power plants are retired. Fuel-switching to natural gas, which actually reversed in 2014 and helped lift consumption, could return again next year and depress both volumes and prices.

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A mitigating factor in coal’s favor is that if crude oil prices keep falling, drilling for oil and gas in the United States will slow down. If the coal companies can hold on until 2016, natural gas prices almost certainly will have to rise as demand overtakes supply. If coal can establish a base price somewhat higher than the EIA predicts before the gas supply falls, volumes and prices for coal may improve markedly.

Alliance Resources Partners L.P. (NASDAQ: ARLP) is the only coal miner to post a gain in 2014. The stock is up around 12.5% so far this year, and with a market cap of $3.2 billion it is now the second largest coal miner by market cap in the United States. The coal MLP paid an annualized distribution per common unit of $2.55 in the third quarter, up 8.5% from its distribution in the third quarter a year ago.

The next best performer was CONSOL Energy Inc. (NYSE: CNX), which has been transitioning into a natural gas producer over the past couple of years. On Thursday the company announced that it plans to create an MLP for its thermal coal operations, spin off its metallurgical coal assets and repurchase $250 million in common stock. Year to date, CONSOL stock has lost just less than 6%. CONSOL is the top U.S. coal miner by market cap, with a value of $8.21 billion.

Among 2014’s worst performing coal stocks is Alpha Natural Resources Inc. (NYSE: ANR), which has lost some 77% of its market value since the beginning of the year. Over the past two years, the drop totals about 82%. The company has cut costs, closed mines and fired workers, but its troubles started when it acquired Massey Energy for $8.5 billion in early 2011. The next year the company wrote down $745 million in goodwill as a result of “slowing economic activity, fuel switching for electricity generation due to low priced natural gas, and recently effective and anticipated U.S. environmental regulations that discourage the use of coal.” The slide has never really stopped.

Peabody Energy Corp. (NYSE: BTU) has dropped nearly 74% of its market value in the past 12 months and down 88% since the beginning of 2011. Goldman Sachs cut its rating on the miner from Hold to Sell in mid-September and put up a price target of $13.00. Peabody closed at $7.77 on Wednesday.

Finally, the Market Vectors Coal ETF (NYSEMKT: KOL) has tumbled 22% so far in 2014 and is down nearly 40% over the past two years. Of the fund’s top 10 holdings, six are not U.S. companies, which helps temper the losses somewhat.

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