Whether it's a recession or an economic boom, one thing doesn't change, the need for energy. And until technology leaps ahead, coal is the largest producer of fuel for the generation of electricity in the world. It's also the most abundant fossil fuel in the United States. Coal is obviously not recession immune as people tighten the reigns on their lives and cut back on electricity consumption, but the shear necessity of electricity makes the coal industry fairly resistant. An investment in an exchange traded fund (ETF) that is centered on the coal industry is a great way to hedge your bets by investing in a pool of successful companies in the coal field.

Market Vectors Coal ETF (NYSE: KOL) seeks to replicate the price and yield performance of the Stowe Coal index, which provides exposure to publicly traded companies worldwide that derive greater than 50% of their revenues from the coal industry. With KOL you'll own shares of some of the most noted coal companies in the world, including Arch Coal Inc. (NYSE: ACI), which specializes in steam and metallurgical coal; CONSOL Energy Inc. (NYSE: CNX), a large provider of fuel for electricity in the United States; Alpha Natural Resources Inc. (NYSE: ANR), another leader in steam and metallurgical coal; and Peabody Energy Corp. (NYSE: BTU), an exploration miner and coal producer worldwide, as well as several other highly rated coal companies across the globe.

Market Vector charges only a 0.65% fee, a fraction what a professional money manager would charge you to analyze research and pick coal mining stocks with this level of global reach. Recently KOL has gone through a typical correction for this commodity sector, but then suffered a greater hit as Asia saw a 20% decline in spot prices for thermal coal. The result? A better deal for those currently willing to dive into coal as an investment. KOL is up 14%, so maybe there's some light at the end of the mine.

MOST NOTEWORTHY: Wachovia, American Electric Power and Consol Energy were today's noteworthy upgrades:

• Deutsche Bank upgraded Wachovia (NYSE: WB), citing valuation and recent capital actions.
  
• Bank of America upgraded American Electric Power (NYSE: AEP), citing the new Ohio rate structure which will provide steady growth.
  
• Merrill upgraded Consol Energy (NYSE: CNX) based on higher coal prices.

OTHER UPGRADES:

• Goldman upgraded the Integrated Oils sector based on risk/reward relative to oil prices. ConocoPhillips (NYSE: COP) is the firm's favorite pick.
  
• Affiliated Computer Services (NYSE: ACS) was upgraded to Buy from Neutral. Goldman expects Affiliated to do well in the current slower macro backdrop and views shares as relatively insulated to government cutbacks.

"Green investing and clean energy may be the politically correct topic at cocktail parties, but coal is the economically correct vehicle for investors," says Ronald Rowland and Brandon Clay.

The editors of All Star Investor explain, "Coal has been an energy source for millennia -- and is still the number #1 source of energy for electric power plants in the world." And, they add, "One of the best places to invest in coal is Consol Energy (NYSE: CNX).

"Prehistoric Chinese are said to have used coal for heating. According to Roman historians, Britain burned coal in the first century. Throughout history, coal has been the primary source of heat in homes.

"Rapidly industrializing nations like China are still dependent upon coal for energy. Overall global consumption has not diminished either. Coal fuels 48% of electricity plant generators. And the trend is heading upward – probably for the next 30 years. Despite the deafening rhetoric, coal is not going away anytime soon. Investors should take notice.

MOST NOTEWORTHY: The coal sector, independent refiners and Alexion Pharmaceuticals were today's noteworthy downgrades:

• Goldman downgraded the coal sector to Cautious from Neutral, citing valuations and expectations for lower coal prices. The firm downgraded CONSOL Energy (NYSE: CNX) Peabody Energy (NYSE: BTU) to Neutral from Buy and Arch Coal (NYSE: ACI) to Sell from Neutral.
  
• Lehman downgraded independent refiners, including Alon USA Energy (NYSE: ALJ), to Negative from Neutral and continues to believe that 2H07 marked an inflection point for U.S. refiners, which are transitioning from a multiyear up-cycle into a new downtrend.
  
• Alexion Pharmaceuticals (NASDAQ: ALXN) was lowered to Market Perform from Outperform at Wachovia following the company's Q4 results, as they believe management's revenue guidance represents a best-case scenario.

OTHER DOWNGRADES:

• Lehman lowered Bayer (OTC: BAYRY) to Equal Weight from Overweight and Whole Foods (NASDAQ: WFMI) to Underweight from Equal Weight.

Consol Energy (NYSE: CNX) has two principle business units: Coal mining & methane gas. Energy legislation has been moving through Capitol Hill committees and is expected to be on the House Floor before year's end. CNX overall option implied volatility of 47 is above its 26-week average of 40 according to Track Data, suggesting larger risk.

Massey Energy (NYSE: MEE), the fourth-largest coal company in the U.S. based on produced coal revenue, closed at $34.32. Bear Stearns says, "MEE signs deal with Essar of India – Reaffirm Outperform rating." MEE overall option implied volatility of 51 is above its 26-week average of 47 according to Track Data, suggesting larger price fluctuations.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Tonight on CNBC's Mad Money, Jim Cramer said that recent pushes out of Democrats are now backing new coal initiatives for converting coal to fuel. His first two coal producers in the sector are Arch Coal Inc. (NYSE:ACI) and CONSOL Energy Inc. (NYSE:CNX). Arch Coal is riskier because its coal is somewhat uncommitted in 2008 and 2009. Cramer did say that CONSOL could even try to covert to a Master Limited partnership. But Cramer's favorite coal stock is Peabody Energy Corp. (NYSE:BTU). He likes where it is placed and he thinks coal will rise to catch up to oil as far as gains. Peabody can sell to China and India and it's down over $9.00 from its highs. The company is also going to spin off its Appalachian assets to focus on growth, and that will take the stock higher when it occurs. He thinks it has 41 years of production in reserves.

The sad thing is that coal is something we are stuck with. I know coal is filthy and it contributes to global warming or whatever the powers that be want us to call it now. Yet I also know that it is perhaps the cheapest form of energy and that even if the U.S. went 100% to clean coal, China, India, and many other nations have very little chance of getting around the use of coal. The buildouts for power plants and for power-generating facilities in so many parts of the world will just take too long to build and there are too many very new "clean" or "cleaner" coal power plants in the US that will be operating for many years into the future. The gasification of coal is also something that can theoretically be done as an alternative energy as well, so like it or not it's probably a safe bet that we are stuck with coal for a long time to come.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.