Peabody Energy Corporation, the largest coal operator in the Western world and second largest globally, filed for bankruptcy on the 13th of April. The company produces 170 million metric tons of coal a year, equivalent to one fifth of the electricity consumed in the United States.
The announcement follows news of other major US coal companies tanking in 2015, among them Arch Coal and Alpha Natural Resources Inc. Meanwhile, across the Atlantic, the UK’s last deep coal mine recently shut as well. 350.org reports Peabody’s fall marks the 50th coal company to declare bankruptcy since 2012.
Five years ago, forecasts anticipated a boom, not bust, in global coal production attributable to expansion in Asia; in China, India and Indonesia predominantly. Although China continues to out-mine all other nations, it’s halted construction of all new mines and aims to close over 1000 in 2016 alone. All three nations are now heavily investing in solar energy, which became cost-competitive far sooner than expected, while shale gas has transformed the US market. The Paris Agreement too has accelerated the energy transition, all of which has left the coal industry stranded.
This feels like the beginning of the end for coal, but will this trend hold for the long term? The picture is mixed; for example, since phasing out its nuclear energy post-Fukushima Germany relapsed back onto coal, while simultaneously investing in alternative energies. Coal continues to support a quarter of Europe’s electricity; where over 280 coal plants operate. The organisation CAN EUROPE have demonstrated which countries in Europe are leading in phasing out coal, which remain undecided and which contrarily are escalating production. The picture is not all-to green, especially when considering that the EU funds coal expansion elsewhere. However the fact that coal is now decried as a poor investment by the likes of Goldman Sachs and Bloomberg does seem to point to a turning point. In this context the bankruptcy of Peabody feels highly symbolic.
As goliaths like Peabody go under, we also need to think about what it means for people and power. What happens to communities and employees when a company of this magnitude fails? How are mining sites being restored and who bears the clean-up costs? It is estimated that in the US alone, taxpayers may be left with a bill of billions – effectively issuing another bailout.
Alternatives to coal and other fossil fuels are not only environmentally necessary but technologically and economically viable. So how can we sustainably accelerate the decline of coal and other fossil fuels?
Image credit: Greg Goebel / Flickr
Bloomberg View “Europe’s Hooked on US Coal, But That Can’t Last”
The New York Times “After Bankruptcies, Coal’s Dirty Legacy Lives On”
Evergy Desk Greenpeace “Europes Carbon Conundrum”