November 12, 2020 Read More →

Declining coal economy prepares Peabody for another bankruptcy

St. Louis Post-Dispatch:

Baseball fans may remember when Busch Stadium’s video board used to go dark for a few seconds, then return with a reminder that coal “keeps the lights on.”

The old slogan is becoming less true every year. Coal plants produce just 19% of U.S. electricity, down from 45% a decade ago, and Peabody, which paid for those stadium ads, is having trouble keeping its own lights on.

The world’s largest private-sector coal miner disclosed this week that it might face a return trip to bankruptcy court if it can’t renegotiate its debt.

A rise in natural gas prices would help, as would a rebound in electricity demand. Both those things might happen as the nation recovers from a pandemic-caused recession. “The coal market might get a little bit better in the next year,” said Rob Godby, associate professor of economics at the University of Wyoming. “There’s a little bit of breathing room.”

Still, the long-term outlook is bleak. “The problem is that higher natural gas prices will also feed demand for renewables,” said Clark Williams-Derry, an analyst at the Institute for Energy Economics and Financial Analysis. “Coal is a typewriter in the computer age, and the electricity markets are going to be moving on.” 

[David Nicklaus]

More: Nicklaus: With coal demand sinking fast, bankruptcy re-enters the conversation at Peabody

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