October 11, 2018 Read More →

Westmoreland bankruptcy underscores financial stress across the coal sector

Bloomberg:

Westmoreland Coal Co.’s Oct. 9 bankruptcy filing is the latest in a string of coal company stumbles bucking the Trump administration’s narrative of a fossil fuel revival.

With the Chapter 11 filing of Colorado Springs, Colo.-based Westmoreland, four of the nation’s top 10 biggest coal providers have now sought bankruptcy protection within the last three years.

“It’s a slow-motion collapse,” said Seth Feaster, a data analyst with the Institute for Energy Economics & Financial Analysis, an energy think tank. “Over 15 gigawatts of coal capacity are retiring this year. And there’s another 20 gigawatts set to close between 2019 and 2024. So this is going to be an ongoing problem for coal companies as the structural decline of domestic thermal coal continues. It’s going to be relentless.”

The Colstrip Power Plant—a 2,100-megawatt facility in eastern Montana—is scheduled to shut down in stages, culminating in 2027. Westmoreland’s Rosebud Mine in Montana sells almost all its coal to Colstrip.

It’s also unclear how Westmoreland could sell any of its mines into a market that has broadly turned against coal in favor of cheaper natural gas and renewables, Feaster told Bloomberg Environment.

Westmoreland’s financial indices have been trending downward for months. It latest 10-Q filing shows a $102 million loss in revenue for the six-month period ending June 30, compared to the same period in 2017. During those same months, Westmoreland reported a $212 million net loss. It’s now $1.1 billion in debt.

More: Westmoreland’s bankruptcy filing latest sign of coal’s distress

Comments are closed.