Peabody, the largest US coal miner, joins Arch Coal in bankruptcy

Peabody Energy, the nation’s largest coal miner, has filed for bankruptcy protection as a crosscurrent of environmental, technological and economic changes wreak havoc across the industry.

Mines and offices at Peabody, a company founded in 1833 by 24-year-old Francis S. Peabody, will continue to operate as it moves through the bankruptcy process. However, Peabody’s planned sale of its New Mexico and Colorado assets were terminated after the buyer was unable to complete the deal.

The company’s bankruptcy filing comes less than three months after another from Arch Coal, the country’s second-largest miner, which followed bankruptcy filings from Alpha Natural Resources, Patriot Coal and Walter Energy.

New energy technology and tightening environmental regulations have throttled the industry and led to a wave of mine closures and job cuts. Peabody makes most of its money by selling its coal to major utilities that power the nation’s electric grid.

New drilling techniques allowed U.S. energy companies to free enormous amounts of natural gas, driving prices lower. The result of those plunging prices and changing environmental regulations has pushed major utilities to choose natural gas over coal to power electric grids…

The end is in sight.

5 thoughts on “Peabody, the largest US coal miner, joins Arch Coal in bankruptcy

  1. Molly M. says:

    When Peabody Energy filed for Chapter 11 bankruptcy protection, a startling statistic emerged: 75 percent of the coal mined in 2015 was done by producers who are now in Chapter 11 reorganization, and questions about how the company will meet its $878 million in unsecured reclamation liabilities have yet to be addressed. (Casper Star-Tribune; 04/14/2016) http://trib.com/business/energy/how-peabody-energy-s-bankruptcy-reflects-coal-s-new-reality/article_29dae2c6-8c4a-556e-885f-9ed3579b9dd9.html

  2. Watch says:

    At the urging of Colorado officials and just days before filing for Chapter 11 bankruptcy protection, Peabody Energy converted the $27 million in self-bonding for reclamation of its Twentymile Mine in Routt County and others to surety bonds. Peabody Energy currently has self-bonding obligations in Wyoming of $728 million and nearly $181 million in New Mexico. (Grand Junction Sentinel; 04/19/2016) http://www.gjsentinel.com/news/articles/peabody-switched-from-selfbonding-for-state-mine-c Reclamation bonding is required of mining companies in an effort to ensure the costs of reclamation don’t fall to taxpayers under circumstances such as a company becoming insolvent. When criteria such as certain financial standards are met by companies, they have been allowed to guarantee their own reclamation bonds rather than posting bonds backed by a third-party guarantor.

  3. Update says:

    “Peabody confident despite closures of power plants that burn Wyoming coal” (10/20/17) http://trib.com/business/energy/peabody-confident-despite-closures-of-power-plants-that-burn-wyoming/article_e59c5b38-d2d4-5611-ba2f-1f0d619ab02f.html
    “The recent retirements of three large coal-burning plants in Texas are no more than an echo far north in the Powder River Basin of Wyoming. The coal sector has improved here since the downturn, and many are less worried about the outlook of one of Wyoming’s most steadfast industries than they were two years ago.
    But when Luminant, a subsidiary of Vistra Energy, said earlier this month that its Monticello, Big Brown and Sandow plants were going to close, it translated to two fewer customers that buy Wyoming coal. The plants simply could not compete with the flush of cheap renewables and low priced natural gas, its owners said.
    For some tracking the trend of declining coal use, the announcements last week were more evidence that coal is on the way out.
    Texas power producers are the biggest buyers of Wyoming coal in a given year. The state has a diverse energy portfolio to choose from, and burning coal in large plants under a host of environmental stipulations has become the most expensive way to turn on the Texas lights hour by hour. Experts are seeing similar trends in other states that buy coal, a disturbing trend for Wyoming, the country’s leading producer of the fossil fuel. See also https://www.dallasnews.com/business/energy/2017/10/06/east-texas-coal-plant-big-polluter-snuffed-cheap-natural-gas

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