The US coal industry just had the worst week in years
Last week was a tough one for the U.S. coal industry, already hit by competition from inexpensive natural gas, tougher environmental rules and a global coal glut that has decimated prices.
Late on Wednesday, coal producer Walter Energy (NYSE:WLT) (TSX:WLT) announced it was filing for Chapter 11 bankruptcy. The expected decision by the miner that once employed more than 1,000 people in Canada’s British Columbia, was closely followed by a report from The Wall Street Journal saying that competitor Alpha Natural Resources, one of the U.S.’s three largest publicly listed coal companies, was preparing to do the same.
On Thursday, the New York Stock Exchange suspended trading the miner’s stock and said it would begin a process to delist the company. The news came on the same day that President Barack Obama’s administration proposed new mining rules, including a prohibition on mining within 100 feet of streams, putting further pressure on an industry already facing historic strains.
The country’s total coal production has shrunk about 15% since 2008, and coal stockpiles keep growing at mines as coal-fired power plants shut down month after month.
The commodity, which once fired half of the country’s power now accounts for just under 40%. And the Energy Department projects that percentage will slide further, to 34% in 2040, as power plants turn to natural gas and renewables like wind and solar power.