November 10, 2015 Read More →

Peabody Settlement on Climate Risks ‘Just the Tip of the Iceberg’

Taylor Kuykendall for SNL:

This is just the tip of the iceberg,” Jamie Henn, a spokesman for fossil fuel divestment promoter 350.org told SNL Energy. “The Peabody settlement is going to kick open the door for a whole new wave of activism and investigations looking at how companies are or aren’t disclosing their climate risk. It’s the fossil fuel industry’s nightmare scenario: real, consistent public accountability for the damage they’re causing.”

Henn said in a statement that the announcement was a “small settlement that will make a huge impact.” He predicts that, in a major win for the fossil fuel divestment effort, investors will start moving faster to dump their investments in fuels such as coal, oil and gas.

In June, Greenpeace International filed a letter with the U.S. SEC alleging that CONSOL Energy Inc.’s filings in support of spinning out its Pennsylvania thermal coal operations into a master limited partnership contained “incomplete and misleading” disclosures as well. The complaint was similar to that against Peabody in that Greenpeace was accusing CONSOL of misusing U.S. Energy Information Administration outlooks, relying on outdated Wood Mackenzie reports and exaggerating the quality of their customer base.

While CONSOL dismissed Greenpeace’s accusations as “ideologically motivated,” the company soon tempered its outlook on the future of coal markets in subsequent filings. Among other changes, CONSOL had updated the Wood Mackenzie forecast, dramatically cutting the predicted room for growth in the coal market.

The coal industry has taken a somewhat mixed view on climate science and the need for policy to address climate change. In a 2014 survey of coal companies by SNL Energy, none of the then-16 leading coal producers would return a request for answers on a few basic questions on climate change and climate policy submitted to their executives.

Cloud Peak Energy Inc. sent SNL Energy a written statement acknowledging climate change as a “political reality.” Arch Coal Inc. pointed to a statement on the U.S. EPA’s Clean Power Plan that, while not taking a position on climate change science, did warn that climate policies put the economy at risk and urged investment in technologies to pursue a “rational way forward for addressing climate concerns.”

Settlement forces Peabody to disclose potential financial risk of climate policy ($)

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