Murray Energy, the U.S. coal mining company whose CEO was an early Donald Trump supporter and later begged his successful candidate for an industry bailout, has become the latest in a series of nearly four dozen mining firms to declare bankruptcy over the last decade.
“Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long-term success,” company founder Bob Murray said in a statement yesterday. The company has US$2.7 billion in debt that it’s trying to restructure, plus more than $8 billion “in actual or potential legacy liabilities, including pensions,” the Columbus Dispatch reports.
“Bankruptcy documents blame the company’s struggles on the same thing that has led to the bankruptcy of more than 40 coal companies since 2008: the closing of coal-fired power plants, record production of inexpensive natural gas, and the growth of wind and solar energy that, coupled with gas, are displacing coal plants,” the Dispatch notes. Taylor Kuykendall, senior coal reporter for S&P Global Market Intelligence, also blamed environmental regulations, like those designed to protect surrounding fenceline communities from highly toxic mercury emissions from coal-fired generating stations.
“Even the threat of potential regulations going forward casts a shadow on new potential investment in coal plants,” Kuykendall told the Dispatch.
Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis (IEEFA), noted that Murray—cited by the Dispatch as a major donor to Trump, and to past and present Ohio governors John Kasich and Mike DeWine, who repeatedly sued the Obama administration over its clean air regulations—couldn’t even hold his company together when all his political stars were aligned.
“They had the keys to the kingdom with the election of Donald Trump and couldn’t turn the industry around,” Sanzillo said. In the end, “markets make profits. Politicians don’t make profits.”
In the end, Trump’s own appointed electricity regulators shot down Murray’s attempt at a bailout, the Dispatch recalls. Murray “was the ultimate optimist in the coal industry,” Sanzillo said. “Now, he’s facing the same challenges as everyone.”
In early October, IEEFA concluded that coal-fired electricity generation was collapsing in a U.S. region that had been a longtime industry bastion. “Abundant gas supplies have transformed the electricity generation sector in the traditionally coal-dominated Southeast U.S.,” the Institute wrote, citing industry trends and data from Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. “Planned new solar construction in the region will add momentum to the energy transition and likely lead to the zeroing out of all coal generation in a number of states in the near future.”
And the coal industry’s woes aren’t limited to the U.S. The Murray announcement came just a week after International Energy Agency data showed renewable electricity matching the output of coal-fired generation within five years, according to analysis by Carbon Brief, and days after Carbon Tracker said four out of five coal plants in the EU were losing money.“Carbon Tracker puts losses from European coal plants this year at €6.6 billion (US$7.2 billion),” Greentech Media reports. “It said that without an accelerated timetable of closures, governments will find themselves on the hook for subsidies, allowing costs to be passed to the ratepayers, or standing by while utilities erode their value. All three are bleak options.”