America’s Biggest Coal Miner Has Filed for Bankruptcy
Amid the slow decline of the coal industry, the largest private coal company in America filed for bankruptcy at the end of October. Former CEO Robert Murray recently made the announcement that Murray Energy failed to make payments to its lenders and therefore, entered into a forbearance agreement that required the company to file for bankruptcy. Unable to pay the bills, Murray Energy’s credit rating was downgraded to “default” by S&P Global Ratings. As power companies have been ditching coal for cleaner and cheaper alternatives like natural gas and renewables, Murray Energy is already the fifth American coal company to end up in bankruptcy court this year (Telford & Grandoni, 2019).
Murray Energy is the latest victim of the downfall of coal. As the most powerful and well-connected company in the coal industry, Murray Energy operates 17 active mines in Alabama, Illinois, Kentucky, Ohio, Utah, and West Virginia, while employing over 7,000 workers (Goldman & Egan, 2019). Robert Murray was once thought of as the king of the American coal industry. However, his strong advocacy for coal has been outmatched by overwhelming market forces that have driven down the price of alternative forms of energy.
Trumps Efforts to Save Coal
The bankruptcy of Murray Energy is just the latest sign that President Trump’s efforts to revitalize the coal industry have failed. Throughout his 2016 campaign, Trump spoke passionately about how he would cut regulations and would prioritize opportunities to save coal in America. Trump’s election gave hope to industry leaders like Robert Murray. However, even with Trump’s efforts to slash environmental regulations and appoint a former coal lobbyist as the head of the U.S. Environmental Protection Agency, the U.S. demand for coal is forecasted to drop in 2020 to the lowest level since 1978 (Goldman & Egan, 2019).
Murray’s Emergency Plea
As a staunch supporter of President Trump, Robert Murray wrote the president a letter in August 2017 that urged him to make an emergency order aimed at protecting coal-fired power plants that were on the verge of closing. Even with this plea, the Trump administration rejected the idea of using an emergency declaration to save the industry. While coal once powered about half of American electricity, it now only powers about a quarter of the country’s electricity needs (Telford & Grandoni, 2019).
With Murray Energy struggling to stay afloat, over 82,000 former miners are at risk of losing their healthcare benefits and retirement pensions (Telford & Grandoni, 2019). Robert Murray has often blamed the Federal Energy Regulatory Commission (FERC) and the former Obama administration for working to bring down the coal industry. However, a 2017 Columbia University study found that the Obama-era regulations on the coal industry have only accounted for about a 3.5 percent decline in U.S. coal production (Telford & Grandoni, 2019). Even with Trump in power, American coal exports have dropped to 20.9 million tons in the third quarter of the year, which is a 28 percent drop from 2018 (Goldman & Egan, 2019).
Coal Projected to Continue Decline
While Robert Murray continues to blame a lack of regulatory action for the decline of the coal industry, it has become clear that free market forces are the main driver behind the downfall of coal. Cheaper renewable energy resources and widely available natural gas infrastructure continue to replace coal-fired power generation. Corporate America is also choosing to abandon the coal industry. Over 48% of Fortune 500 and 63% of Fortune 100 companies have vowed to cut greenhouse gas emissions by increasing their use of green energy and natural gas over coal (Silverstein, 2019). With these forces adversely impacting the industry, the U.S. Energy Information Administration predicts that coal will continue to suffer in the coming years.
Goldman, D., & Egan, M. (2019). “America’s largest private coal miner files for bankruptcy.” CNN.
Silverstein, K. (2019). “Bankruptcy Of Coal Giant Murray Energy Is A Turning Point For Renewable Power.” Forbes.
Telford, T., & Grandoni, D. (2019). “Murray Energy files for bankruptcy as coal’s role in U.S. power dwindles.” Washington Post.