Peabody

IEEFA Research

Why Navajo Generating Station Is No Longer Commercially Viable

Why Navajo Generating Station Is No Longer Commercially Viable

The Institute for Energy Economics and Financial Analysis (IEEFA) has done extensive research into the difficult circumstances facing Navajo Generation Station. Key findings: Declining energy market prices and rising production costs have made power produced by the plant more expensive than competing sources. Market trends are not likely to change, leaving the plant’s financial viability […]

August 16, 2017 Read More →
IEEFA Report: ‘End of an Era’ for Navajo Generating Station; Vast Subsidies Would Be Required to Keep Aging Plant Online; Retirement Seen as Most Viable Option

IEEFA Report: ‘End of an Era’ for Navajo Generating Station; Vast Subsidies Would Be Required to Keep Aging Plant Online; Retirement Seen as Most Viable Option

‘No Longer Competitive’ With Rise of Natural Gas and Renewables; Staying Open Through 2022 Would Require a $740-Million-to-$1-Billion Subsidy; Through 2030 Would Require a $1.4 to $2.4 Billion Subsidy

May 10, 2017  (IEEFA.org) – The Institute for Energy Economics and Financial Analysis today published a report detailing how the failing coal-fired Navajo Generating Station in northern Arizona will require hundreds of millions of dollars in subsidies to remain online for any length of time. The report—“End of an Era: Navajo Generating Station Is No […]

IEEFA Research Brief: Coal in Decline, Blow by Blow

IEEFA Research Brief: Coal in Decline, Blow by Blow

Plant Closings and the Likely Effects on Specific Companies and Mines

We’ve published a research brief today that presents an expansive snapshot of a moving target: the decline in U.S. coal-fired generation nationally. As global energy markets continue to undergo rapid transformation, change has swept the U.S. as well. Our brief—“U.S. Coal Phase-out, Blow by Blow: Plant Closings and the Likely Corresponding Effect on Specific Companies […]

April 21, 2017 Read More →
IEEFA U.S. Coal Outlook 2017: Short-Term Gains Muted by Prevailing Weaknesses in Fundamentals

IEEFA U.S. Coal Outlook 2017: Short-Term Gains Muted by Prevailing Weaknesses in Fundamentals

Production Declining by as Much as 40 Million Tons; Prices Failing to Benefit Shareholders or Stimulate New Investment; Anemic Exports; Little or No Gain From Regulatory Relief; Increasingly Dim Employment Prospects

We’re out this morning with our annual outlook for U.S. coal markets, and the picture isn’t pretty. We see the potential for some short-lived strength in the current uptick for coal producers but the title of our assessment sums up the larger view: “Short-Term Gains Will Be Muted by Prevailing Weaknesses in Fundamentals.” You can […]

As Texas Coal-Fired Power Plants Close, Powder River Basin Mines Are Losing Their Largest Customers

Trends Will Force Closures and Complicate Efforts by Alpha Natural Resources, Arch Coal and Peabody Energy to Work Their Way Out of Bankruptcy

CLEVELAND, Aug. 3, 2016 (IEEFA.org) — The Institute for Energy Economics and Financial Analysis today published a report detailing how Powder River Basin coal producers are losing their largest customers as Texas power producers turn increasingly to other sources of energy. The report, “Texas’ Outsize Role in the Decline of the Powder River Basin Coal […]

August 2, 2016 Read More →
The Federal Government’s Coal-Leasing Program Is Broken: Here’s How to Fix It

The Federal Government’s Coal-Leasing Program Is Broken: Here’s How to Fix It

Appoint a Price-Setting Commission; Ban Exports; Cancel Some Leases; Eliminate Self-Bonding; Mandate Set-Asides for Mine Clean-up and Miner Pensions; Require Twice-a-Year Audits; Assume Smaller Markets

It’s time for the U.S. to modernize how it manages its publicly owned coal reserves. That’s the essence of comments we’ve filed today with the Department of the Interior as it begins a review of its federal coal-leasing program in the Powder River Basin, a program that has been mismanaged for years at taxpayer expense […]

Coal Won’t Solve the Energy Poverty Problem

Coal Won’t Solve the Energy Poverty Problem

Times Have Changed; Old Electricity-Generation Models Don’t Work Anymore

Coal-fired electricity is no longer the economy builder its proponents say it is. Time was when coal in fact did contribute to growth in many economies, but times have changed. Today governments and private interests worldwide concede—even emphasize—the economic and environmental dysfunction of coal. We’ve just published an IEEFA Briefing Note (“Energy Poverty, Then and […]

March 3, 2016 Read More →
If Peabody Is to Recover, It Must Close More Mines

If Peabody Is to Recover, It Must Close More Mines

The World’s Biggest Private-Sector Coal Company’s Current Turnaround Strategy Won’t Work

Peabody Energy, the largest private-sector coal-mining company in the world, is out with a dismal review today of its 2015 performance. The metrics unto themselves are damning, and Peabody’s plan for turning things around is even worse. In a report we’ve just published (with the Seattle-based Sightline Institute)—“Peabody’s Strategies for Survival Ignore Market Realities and Risks […]

February 11, 2016 Read More →
For U.S. Coal, Market Realities Grow Increasingly Harsh

For U.S. Coal, Market Realities Grow Increasingly Harsh

Debt Hurdles, Reclamation and Pension Challenges, Abandonment by Hedge Funds

We distributed a briefing note this week that delves into some of the many pressing difficulties confronting U.S. coal producers. In the note (“Struggling U.S. Coal Companies Face Debt Hurdles, Complications From Reclamation and Pension Obligations, Pressure from Hedge Funds”) we talk about how the cumulative impacts of the industry’s many mounting liabilities—reclamation costs, pension […]

PEABODY ENERGY:  Management Is Rewarded as Investors Lose and Workers Are at Risk

PEABODY ENERGY: Management Is Rewarded as Investors Lose and Workers Are at Risk

Peabody Energy Management Is Rewarded as Investors Lose and Workers Are at Risk By David Schlissel, Director of Resource Planning Analysis, IEEFA

April 29, 2015 Read More →

More News and Commentary

Powder River Basin coal output down sharply in second quarter

S&P Global Market Intelligence ($): Total coal production declined sharply in the second quarter at some of the largest coal mines in the nation, according to early data from the U.S. Mine Health and Safety Administration. Coal production from the Powder River Basin, the most productive coal region in the U.S., was down 9.9% in […]

July 24, 2018 Read More →

IEEFA Update: Why Investors Are Watching the Navajo Generating Station Story So Closely

Will Economics or Politics Prevail?

Word last week that two potential buyers are interested in the failing Navajo Generating Station (NGS) in Arizona turned heads regionally and nationally — perhaps even globally. The fate of NGS, as the power plant is known for short is a major story in the state. NGS is in remote far-northern Arizona, almost 300 miles […]

Hopi Tribe, Peabody File Suit to Keep Navajo Plant Running

Associated Press: The Hopi Tribe and coal mining groups on Tuesday sued the operator of an Arizona aqueduct system to try and keep a coal-fired power plant running beyond 2019. The lawsuit filed in U.S. District Court by the tribe, the United Mine Workers of America and Peabody Energy contends the Central Arizona Water Conservation […]

May 2, 2018 Read More →

Economics of Navajo Plant Undercut by Steady, Low Natural Gas Prices

The Republic: Two investment firms are considering a joint purchase of the Navajo Generating Station coal-fired power plant near Page, but time is running out to strike a deal. The power plant is scheduled to close in December 2019, which also will prompt the closure of the Kayenta Mine about 80 miles away. Peabody Energy […]

April 30, 2018 Read More →

IEEFA Update: Lazard Risks Its Reputation by Working With Peabody

‘Cynical Approach in Illinois Is Now Being Repeated in Its Dealings With the Navajo Nation in Arizona’

April 27, 2018 (IEEFA) — A well-known New York investment banking firm is putting its reputation at stake by working with Peabody Energy to keep a failing coal-fired Arizona power plant alive, concludes a letter published today by the Institute for Energy Economics and Financial Analysis. The letter, addressed to Kenneth M. Jacobs, chairman and […]

April 27, 2018 Read More →

IEEFA Update: Navajo Generating Station in Arizona, Next Big Hit to Peabody’s Portfolio

If Keeping a Failing Power Plant Alive Was Such a Good Idea, the Company Would Be Putting Up Some of Its Own Cash

To its credit, Peabody Energy produced more coal in the first quarter of 2018 than it did in 2017, at a time when production for the rest of the United States coal industry was down 6%.  However, despite the production increase, Peabody’s profits from U.S. production were 28% less in the first quarter of 2018 […]

April 27, 2018 Read More →

Peabody Consultant Says Navajo Plant May Have A Buyer

S&P Global Market Intelligence ($): A consultant retained by Peabody Energy Corp. told a U.S. congressional committee that the Navajo Generating Station has the potential to continue to supply power at competitive prices well into the future and a potential buyer is interested. An unnamed investor and operating company have been identified that could keep the plant open, said […]

April 13, 2018 Read More →

IEEFA Update: After Restatement of Reserves, U.S. Coal Investment Rationale Gets Weaker

Big Write-Offs by Arch and Peabody; More Are Likely

Coal reserves are considered the measure of a coal company. Insurers, investors, government officials, market analysts and so on have typically considered company-reported reserves an indication of what can actually be cashed in on someday. Digging into the data in coal company disclosure statements shows how some coal producers are now acknowledging that reserves have […]

April 10, 2018 Read More →

Few New Leases on Federal Coal Tracts 1 Year After Moratorium Reversal

S&P Global Market Intelligence ($): A year after the Trump administration lifted a controversial moratorium on federal coal leases, both approvals and new applications are scarce as industry challenges show little sign of abating. “I don’t think there is a whole lot of interest in new coal leasing,” said Mark Squillace, director of the Natural […]

April 5, 2018 Read More →
IEEFA Update: America’s Coal Industry Is in Trouble

IEEFA Update: America’s Coal Industry Is in Trouble

Little Evidence That Exports Will Save the Day

American coal industry executives have been working hard to restore investor confidence by arguing for a business-recovery rationale based on increased demand in export markets. There’s not much evidence for this case. Exports did help the industry in 2017, as several companies noted in their latest earnings reports, but U.S. coal producers are facing major […]