In its bankruptcy paperwork, Murray Energy Corp. cited reduced demand, competition from cheaper imports, and the rapid spread of renewables. US coal consumption is at a 40-year low, and 270 coal plants have closed (or made plans to close) since 2010. It’s the ninth coal company in the last two years to file for bankruptcy.
From Bloomberg…
“Murray Energy Holdings Co. filed for Chapter 11 protection in the U.S. Bankruptcy Court in Columbus, Ohio, to restructure more than $2.7 billion of debt. The miner reached a restructuring support agreement with lenders who hold more than 60% of a $1.7 billion loan, the company said in a statement. The deal provides a new $350 million loan to keep operations going during the reorganization.”
CEO Robert Murray founded the company in 1998 and has been a prominent proponent (and sponsor) of the Trump administration. His action plan may have informed some of the current environmental policies, including pulling out of the Paris climate accord and rolling back Obama-era clean energy rules.
But even as he succeeded in turning Trump’s attention to coal workers, Murray acknowledged that the lost coal jobs are gone for good.
In 2008, coal accounted for almost half of U.S. electricity generation, according to the EIA. Eleven years later, that’s fallen to an estimated 25% and is expected to continue its decline.
From Reuters…
“Coal’s share of U.S. power generation is expected to fall to 22% in 2020, compared with roughly 25% this year. As recently as 2003, coal accounted for half of the country’s electricity generation, according to the U.S. Energy Information Administration (EIA). The EIA expects the power sector will burn less coal this year than it has since 1979.”
Despite the current political leanings in the US that grab all the headlines (pro-coal / climate change denial) the rhetoric doesn’t match the economics. The market suggests improved renewables prices will continue to displace coal.
But it’s not an inevitability. The renewables community must continue to innovate. We must attract the brightest minds into the industry and import talent from other sectors. It takes people to drive the renewable energy revolution.
Further Reading
Reuters
Bloomberg
Photo by LEMUR on Unsplash
