Donald Trump’s surprise presidential victory Tuesday sent the shares of large wind companies plummeting, while coal is getting a sizeable boost in Wednesday trading.
Trump’s victory is backed by a promise that he would put coal miners back to work, while he has raised questions about renewable energy as a less cost-effective solution for getting the nation’s energy. Trump more recently has been backing the development of “clean coal” technology as central to his energy plan to revitalize coal country.
With that in mind, some coal stocks were seen surging at surprisingly high levels following the election results.
The world’s top coal trader, Glencore Plc, saw a 7 percent rise on Wednesday, according to Bloomberg. On the renewable side, wind giant Vestas saw a 13 percent drop in its shares.
“The swing foretells a story of the most carbon-intensive fossil fuel making a comeback, while the fight against climate change — and investment in wind and solar power — languishes,” Bloomberg reported.
On Monday, China announced it would increase its use of coal 20 percent by 2020, despite signing last year’s Paris climate change deal that President Obama had agreed to with nearly 200 other nations.
The oil and natural gas industry also should stand to benefit from Trump’s presidency, although that wasn’t immediately apparent from oil futures trading Wednesday morning.
Increased price volatility was driven by speculation that Trump would increase oil production and cause the oil supply glut to continue, according to MarketWatch. The market is oversupplied, which has caused the price of oil to fall, and with it thousands of jobs in the United States’ oil fields.
Some energy experts also speculate that a Trump victory could upset a plan by the Organization of the Petroleum Exporting Countries to reduce oil production to drive up prices and end the glut.
Trump has called for increased scrutiny and tightening policies on Iran just as the Islamic Republic is looking to renew its standing as a major producer in OPEC.
His presidency also could drive China and Russia closer together on energy issues. While voters were busy at the polls Tuesday, Russia and China were holding high-level talks on creating new inroads on energy production to benefit their countries.
The meeting was held between Chinese Premier Li Keqiang and Russian President Vladimir Putin, according to official news reports.
The official Chinese news service Xinhua reported that the two leaders discussed cooperation on “major projects of oil, natural gas, civilian nuclear energy and aerospace.”
The increased cooperation comes amid accusations and reports that the Russian government had been attempting to influence the U.S. elections in Trump’s favor.
Chinese officials, on the other hand, began threatening Trump ahead of the election with political and economic retaliation if he were elected president and exited the Paris Agreement, which he has said he would do.
Trump has called for increased scrutiny of China’s economic policies in an effort to benefit U.S. companies and exports.
