One of the Largest Coal Companies in the United States Just Filed for Bankruptcy

Arch Coal, one of the United States’ largest coal companies, filed for bankruptcy on Monday in the hopes of eliminating more than $4.5 billion in long-term debt, according to a press release issued by the company.

The news comes as several of Arch’s competitors — Patriot Coal, Walter Energy, and Alpha Natural Resources — have also filed for bankruptcy.  Arch Coal is the second largest supplier of coal in the United States behind Peabody Energy, and its mines represent 13 percent of America’s coal supply.

Low natural gas prices and environmental regulations made 2015 a tough year for the U.S. coal industry, with domestic production levels slumping to a 30-year low.  Coal production has been on the decline for years, since peaking in 2008, and 2015’s production numbers represent a 10 percent decline from 2014.  Recent climate policies have also hampered coal use, which is more expensive and polluting for utilities than natural gas.  In April, natural gas surpassed coal, for the first time ever, as the primary source of electricity generation in the country (though it remained in the top spot for only a month before being overtaken by coal).

“U.S. coal consumption is declining dramatically as coal-fired power plants are shutting down.  Coal is being displaced by renewables and natural gas, and the Asian markets that all coal companies were looking to as their saviors are moving in the opposite direction,” Ross Macfarlane, senior advisor with Climate Solutions, told ThinkProgress.  “[Arch’s bankruptcy filing] wasn’t unexpected, but it’s still very significant in that it shows that the second-largest coal company in the United States is unable to pay its debts and provide any return at all to its shareholders.”

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