Cline is exploiting coal's big advantage: It's a bargain compared with most forms of green energy. "Coal is the backbone of reliable, low-cost power," says Bartow Jones, managing director of Riverstone Holdings LLC, a New York-based Carlyle Group affiliate that invested $600 million in Cline's operations in 2007.

Power-plant coal such as Cline's sold for $47.25 a ton on Oct. 11, about two-thirds cheaper than wind power and three- quarters the cost of solar, according to Bloomberg New Energy Finance. In the second quarter, the cost of electricity per megawatt hour from coal was $59.51, including capital and operating expenses, compared with power from offshore wind at $176.37 and electricity from thin-film photovoltaic cells at $240.55.

At a cost of $19 a ton to mine coal last year at Pond Creek, Cline spends even less than competitors. Coal from central Appalachia averages $57 a ton to mine, Schwartz says.

'That Bothers Me'
Because coal is an inexpensive engine to fuel the world's development, Cline says, regulators must be careful not to cripple growth.

The U.N. Intergovernmental Panel on Climate Change won a Nobel Peace Prize along with Gore in 2007 for a plan to limit fossil fuels through higher taxes, among other things. Cline says such measures are misguided.

"If we're going to put a tax on carbon, with the money going to the thousands of people dying every day from not having clean water, or from malaria, then anybody who refused that would be immoral," Cline says. "But to do it because somebody wants a windmill turning instead of fossil fuels, with the money going to a non-useful entity, that bothers me."

World governments provide subsidies for fossil fuels worth $557 billion a year, including $40 billion for coal, the IEA says. This compares with $46 billion for renewables and biofuels.

Eoin Treacy's view I have been arguing for a number of years that energy policy which fails to make cost a central premise was unlikely to gain traction as an investment theme. Most green energy investments are leveraged to high oil prices, so with oil having ranged for more than a year they have underperformed. Coal and natural gas prices are comparatively cheap and are increasingly being looked to as viable solutions for a global economy that simply does not have the luxury of paying up for energy when cheaper domestic alternatives are abundant. (Also See Comment of the Day on March 30th).

Thermal coal prices unwound the entire bull market advance before bottoming from May 2009 and have sustained a progression of higher reaction lows since. Prices have been ranging above $65 since August, in a relatively gradual reversion towards the 200-day MA, and a sustained move below $60 would be required to question medium-term upside potential.

The Powershares Global Coal Portfolio and the Market Vectors Coal ETF have relatively similar chart patterns to oil. They are testing the upper side of yearlong ranges and while some consolidation of recent gains is a possibility, downward dynamics similar to those posted at the January and April peaks would be required to question potential for an upward break.

Yanzhou Coal, listed in Hong Kong, continues to outperform and has been consolidating mostly above the 2007/08 top formation for a year. It is now testing the highs and a sustained move below HK$17 would be required to question medium-term scope for further upside.

Peabody Energy. listed in the USA, has been ranging mostly below $50 since January but broke upwards three weeks ago and a sustained move below $45 would be required to question medium-term upside potential.

Whitehaven Coal, listed in Australia, has been consolidating above the prior high for the last two months and a downward dynamic would be required to question potential for a near-term reassertion of the medium-term uptrend.