A new weapon has been brought to bear in the war on coal, and it’s aimed right at the corpulent industry’s soft underbelly: risk.

New York Attorney General Andrew Cuomo just sent out a round of subpoenas to energy companies. He wants to see internal documents demonstrating that the companies — AES Corporation, Dominion, Dynegy, Peabody Energy and Xcel Energy — fully disclosed the financial risks of planned coal-fired power plants to investors.

(This is Cuomo’s twist on a once-obscure statute — the Martin Act, a 1921 state securities law — that his predecessor Eliot Spitzer revived and used to investigate Wall Street corruption.)

About what risks do you suppose the energy companies might have been less-than-forthcoming?

“Any one of the several new or likely regulatory initiatives for CO2 emissions from power plants — including state carbon controls, E.P.A.’s regulations under the Clean Air Act, or the enactment of federal global warming legislation — would add a significant cost to carbon-intensive coal generation,” the letters [accompanying the subpoenas] said.

They added, “Selective disclosure of favorable information or omission of unfavorable information concerning climate change is misleading.”

This is a BFD. Cuomo’s saying to Big Coal: You can bullshit the public, you can bullshit legislators, but it’s against the law to bullshit your investors.

What would it mean for coal to fully disclose the environmental risks?

First, "omission of unfavorable information concerning climate change" is a no-no. Seems to me at a minimum that means acknowledging the risks outlined by IPCC WG2, and they are considerable. Big Coal has to tell its investors that climate change is going to be extremely unpleasant, and that coal is the world’s foremost contributor to it.

Second, complying with the Clean Air Act is expensive, and puts a serious dent in coal’s market position, even absent greenhouse gas regulations.

Third and most significantly, regulations on GHG emissions are popping up all over the place, from cities, states, and I’d say by 2010 at the latest, the federal government. Maybe it’s a federal carbon cap; maybe states implement even tougher carbon caps. Maybe Dingell gets a carbon tax through. Maybe Chris Dodd is elected and bans new coal plants that don’t have working sequestration. Maybe the feds don’t guarantee a market for CTL. Maybe they don’t subsidize the development of sequestration. Maybe sequestration costs far more than anyone estimates.

Point is, any new coal plant faces risks that are a) extremely difficult to quantify or predict, and b) potentially fatal. The coal industry has helped keep the public passive by highlighting uncertainty around climate change, but that won’t work with investors — investors hate uncertainty above all else.

Big Coal has convinced lots of people that the use of coal for the foreseeable future is unavoidable and inevitable, but I suspect that energy executives know better. I suspect they’re in something of a panic. They know that in a fair, carbon-constrained market, coal is a dead man walking. It can survive only through preferential government treatment.

That’s why coal execs are trying to shape federal regulations while they still can. That’s why they’re trying to artificially create a market for liquid coal. That’s why they fight so hard for research and loan guarantees behind IGCC. That’s why they’re lobbying like hell for massive subsidies for carbon sequestration.

They know they can’t fool investors or the public forever, so they’re fighting for coal’s survival with the strategy that’s always paid off before: political access.