Peabody

IEEFA Research

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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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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

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2014 – Another Year of Unmet Promises for the Prairie State Energy Campus

2014 – Another Year of Unmet Promises for the Prairie State Energy Campus

2014 – Another Year of Unmet Promises for the Prairie State Energy Campus (pdf) By David Schlissel, Director of Resource Planning Analysis, Institute for Energy Economics and Financial Analysis

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Report: 20 Fourth-Quarter Questions for Powder River Basin Coal Producers

Report: 20 Fourth-Quarter Questions for Powder River Basin Coal Producers

20 Fourth-Quarter Questions for Powder River Basin Coal Producers (pdf) By Tom Sanzillo, Director of Finance, Institute for Energy Economics and Financial Analysis

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Memo: Analysis of Paducah Power System’s Recent and Future Cost of Power from the Prairie State Energy Campus

Memo: Analysis of Paducah Power System’s Recent and Future Cost of Power from the Prairie State Energy Campus

Memo: Analysis of Paducah Power System’s Recent and Future Costs of Power from the Prairie State Energy Campus By David Schlissel, IEEFA Director of Resource Planning Analysis

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More News and Commentary

On the Blogs: Peabody May Revisit Bankruptcy

Seeking Alpha: In the U.S., gas and renewable energy are a major problem. Pay attention to where Peabody will sell its coal. Peabody thinks it is going to sell coal at expense of its competitors, and has ambitions for Powder Rover Basin and Western coal production that probably are not achievable. Internationally China controls the […]

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Peabody Bankruptcy Deal Leaves Taxpayers With Mine Cleanup Bill

The Wall Street Journal: A mining company’s debt-cutting plan will leave taxpayers facing a bigger bill for cleaning up nearly two dozen hazardous sites primarily in the central U.S., including a swath of northeast Oklahoma that once produced lead ore for bullets in both World Wars. The 22 properties will be shed by miner Peabody […]

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IEEFA Update: Peabody’s Recovery Plan Overstates the Market for Coal

Fragile Back-to-Black Balance Sheet Stands to Leave Investors in the Red; Likely Underperformance on Production and Revenue Forecasts

Last week’s bankruptcy court approval of Peabody Energy’s reorganization plan should be cause for investor alarm. The flaws in the plan are fundamental: First, the company is claiming an increase in coal sales at a time of a declining market. The company in fact faces the likely loss of five to seven million tons per […]

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U.S. Coal Industry: ‘Prospects for Jobs Are Weak’

The Washington Post: The battered U.S. coal industry is showing flickering signs of life. Yet the prognosis for Big Coal remains dim. Coal prices are about double what they were a year ago. Rail car deliveries of coal are up 16 percent this year. The more than 50 coal mining firms that went bankrupt over […]

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Peabody to Stop Using ‘Self-Bonding’ for Cleanup Obligations; May Revive It in the Future

Reuters: U.S. coal miner Peabody Energy Corp said on Monday it has agreed to set aside collateral to cover future mine cleanup costs as part of its bankruptcy reorganization plan, ending its controversial use of “self-bonds.” For decades the largest U.S. coal companies have used a federal practice known as “self-bonding,” which exempts companies from […]

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More Bankruptcy-Exit Bonuses for Peabody Execs

E&E News: Last year, Peabody Energy Corp. faced bankruptcy and over $2 billion in losses. Now, executives at the world’s largest private-sector coal company stand to take in tens of millions of dollars in stock bonuses under Peabody’s bankruptcy exit plan. The deal reserves 10 percent of new shares for employees. The CEO would receive […]

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U.S. Coal Producers Step Up Campaign to Rebrand the Industry as a ‘Clean Player’

From the New York Times: Seeking to shore up their struggling industry, the coal producers are voicing greater concern about greenhouse gas emissions. Their goal is to frame a new image for coal as a contributor, not an obstacle, to a clean-energy future — an image intended to foster their legislative agenda. Executives of the […]

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IEEFA Op-Ed: Market Forces Are What’s Killing the Navajo Generating Station

The President Should Not Intercede

The question of whether the Navajo Generating Station will stay open past 2019 is of special regional interest for the implications it raises about jobs and local economies in the Rocky Mountains and the Southwest. But it’s a national issue too, as shown by pleas this week for President Trump to take executive action to […]

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IEEFA Guest Commentary: Peabody Must No Longer Be Self Bonded

IEEFA Guest Commentary: Peabody Must No Longer Be Self Bonded

‘Dodging Debt Obligations Through Bankruptcy Proceedings’

Wyoming’s Department of Environmental Quality is facing a critical decision regarding Peabody Energy and whether the company can continue to self-bond for its $728 million Wyoming coal mine cleanup obligation. Self-bonds are unsecured IOUs, uncollectable when a company hides under bankruptcy protection. Peabody is the nation’s largest coal company, and is going through Chapter 11 […]

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IEEFA Update: Shutdown of Navajo Generating Station Likely Blows a Hole in Peabody’s Bankruptcy Plan

IEEFA Update: Shutdown of Navajo Generating Station Likely Blows a Hole in Peabody’s Bankruptcy Plan

Company Seen as Unlikely to Meet its Production or EBITDA Projections; Fate of Plant Is Emblematic of Larger Shift

Bankrupt Peabody Energy is being dealt a fresh setback on news this week that owners of the coal-fired Navajo Generating Station don’t expect to keep the plant open past 2019. The 2,500-megawatt station in Northern Arizona is owned by a consortium of public and private utilities with significant service areas in several states. While Peabody […]

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