Here's some good news about your old boss and existential threat, Killer Coal.
And then there was one. So, one more to go.
Arch Coal files for bankruptcy, joining a half-dozen other major American coal companies going bankrupt over the last year. Arch is the second biggest coal producer, after Peabody. And Peabody is now worth 0.4% of what it was valued five years ago. The main, direct business effect is to make it very unlikely that coal corporations will be able to finance much anything, either through bonds or stock issuance. The political impact seems more important - the chart above shows what people think of coal's future.
And in political news, Obama has suspended new coal leases on federal lands for a three year review period. If a Democrat replaces Obama then this suspension will be permanent. While the administration claims current leases can sustain production for 20 years, the suspension reduces the flexibility to shift production between different leaseholders. Production level also depends on price, so the suspension eliminates the chance to switch to newer and cheaper coal sources on federal land, especially after the cheapest coal gets mined from existing leases.
Obama also has a $10 million program to assist economically-declining coal areas of Appalachia, assuming the Republican Congress passes it. That assumption isn't guaranteed, even though Republicans dominate the area, because the program helps people and not the coal corporations that fund the Republican Party.
Hillary Clinton has a much bigger $30 billion proposal specifically targeting assistance to present and retired coal miners. This relates back to the bankruptcies - the companies are using them to void pension obligations and to transfer ownership from stockholders to lenders, and among the stockholders are miner pension funds. Again coal companies and Republican leadership reject the help, arguing instead for trickle-down benefits of increasing coal company revenues and expecting miners to get some of the money.
Last, world coal consumption may have peaked in 2013. China and India may both be ramping down their coal imports. I'm not sure I believe their claims that they'll end imports in two years, but it's more evidence that the international market is in decline, which can affect the love affair with coal and climate denialism in places like Australia and the US.
Some very good news.
rabett.blogspot.com |
