Black Times for Coal
January 11, 2016
The Coal industry doesn’t just have a black heart, it has a fatal case of black lung as well.
China will stop approving new coal mines for the next three years and continue to trim production capacity as the world’s biggest energy consumer tries to shift away from the fuel as it grapples with pollution.
China will suspend the approval of new mines starting in 2016 and will cut coal’s share of its energy consumption to 62.6 percent next year, from 64.4 percent now, Xinhua News Agency reported Tuesday, citing National Energy Administration head Nur Bekri. It’s the first time the government has suspended the approval of new coal mines, according to Deng Shun, an analyst with ICIS China.
Coal production in the U.S. has dropped to its lowest level in 30 years thanks in part to low natural gas prices and climate policies encouraging utilities to switch to natural gas to generate electricity.
It was 1986 when coal production in the U.S. was as low as it is today, according to U.S. Energy Information Administration data released Friday. Coal is the largest single source of greenhouse gas emissions driving climate change. Burning natural gas to generate electricity emits about half as much carbon dioxide as burning coal.
The data show the decline in coal production hasn’t been felt evenly across the country, however.
Appalachian coal, produced mainly in West Virginia and Kentucky, was hit the hardest in 2015, falling 40 percent below the region’s annual production average between 2010 and 2014.
Other coal-producing regions were less hard hit, with production falling between 10 and 20 percent last year.
Arch Coal Inc, the second-largest coal miner in the United States, and its domestic subsidiaries filed for Chapter 11 bankruptcy to facilitate a restructuring with a group of lenders that hold more than 50 percent of its debt, the company said.
Arch Coal said on Monday it reached an agreement with its lenders that will eliminate more than $4.5 billion in debt from the company’s balance sheet.
The company said it has sufficient capital to run its operations smoothly throughout the restructuring process, and expects mining operations and customer shipments to continue uninterrupted.
Arch Coal is the fourth coal miner, after Walter Energy Inc, Alpha Natural Resources Inc and Patriot Coal, to file for bankruptcy.
The Missouri-based company was widely expected to go bankrupt after delaying a $90 million interest payment due in December last year.
In November, it reported a $2 billion third-quarter net loss and said it could have trouble servicing a $5.1 billion debt.