One of the world’s largest coal companies, Peabody Energy, has filed for bankruptcy, following two of its competitors, Alpha and Arch Coal.
75% is Peabody’s number – the amount the stock has dropped this year coincides with a 75% drop in demand and the price for coal since 2011. The company says it will keep operating mines while it attempts to shed $10.1 billion of debt through the bankruptcy process.
Worth almost $20 billion in 2011, Peabody’s debt ballooned as it continued expanding even as prices and demand crashed.
About 50 coal companies have filed for bankruptcy since 2012, accounting for 45% of US production, says Sierra Club, which has pushed the process along through its successful Beyond Coal campaign. Last month, coal production was 52 million short tons, 36% less than March 2015, according to the US Energy Information Administration, and is expected to drop another 16% in 2016.
In addition to getting debt relief, coal companies have been using bankruptcy to shed responsibilities to workers, retirees, and local communities near mines. Peabody owes over $2 billion to cleanup old mines, which it will likely try to leave in US taxpayers’ lap.
"Unfortunately, Peabody has a history of spinning off its responsibilities into smaller companies that seem built to fail, while taxpayers are left holding the bag. We need to make sure the former energy giant is held accountable for every promise it’s made and that its decline leaves its commitments in the best shape possible. In addition to Peabody doing its part, we also need Congress to do theirs — which means investing more federal dollars in economic redevelopment and diversification in coal communities, shore up health care and pension plans for coal workers and their families, and ensure toxic mining sites are cleaned up and reclaimed," says Mary Anne Hitt, Director of Sierra Club’s Beyond Coal Campaign.
The problem for coal companies won’t let up soon because utilties have the biggest stockpiles in 25 years. This winter – the warmest on record – resulted in lower electricity demand in the US. And coal exports dropped 23% in 2015 for the third consecutive year, according to the US Energy Information Administration.
Peabody was one of many fossil companies that spent millions supporting organizations that have misled the public on climate change … "willfully and deliberately seeking to delay, dismantle or destruct climate action," says Bill McKibben, of 350.org.
Peabody, of course, is a major player in ALEC. It urged ALEC’s legislative members to spark a "political tsunami" in opposition to EPA’s Clean Power Plan, and has been behind the many lawsuits against the EPA in the Supreme Court.
Read our articles, Does This Surprise You?! Coal Companies Lie and The On-Going Struggle to Put An End To Coal.
Check out which coal plants have closed, and which plan to close in the US:
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