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Wednesday, April 13, 2016
America Stands to Benefit from Peabody Bankruptcy
WildEarth Guardians Renews Call on Company to Shed Liabilities, End its Coal Business
Contact: Jeremy Nichols (303) 437-7663 jnichols@wildearthguardians.org
Denver—As the nation’s largest coal company today declared bankruptcy, WildEarth Guardians renewed its call for Peabody Energy to protect Americans, the climate, public lands, and workers, and wind down its coal mining business.
“The writing’s on the wall, there is no future for coal,” said Jeremy Nichols, WildEarth Guardians’ Climate and Energy Program Director. “It’s time for this country’s largest coal company to acknowledge the need to keep coal in the ground and protect our climate.”
St. Louis, Missouri-based Peabody Energy, the largest coal company in the U.S. and largest private sector coal company in the world, today filed for Chapter 11 bankruptcy, citing massive losses and the failure to sell its Colorado and New Mexico mines. The filing comes as the coal industry is collapsing, spurred by declining demand, rising production costs, and growing opposition to fossil fuels.
In the face of its years-long decline and inevitable bankruptcy, last month, WildEarth Guardians called on Peabody head, Glenn Kellow, to end its coal business. Today, Guardians is echoing that call.
The company produces more than 180 million tons of coal annually from mines in Arizona, Colorado, New Mexico, Wyoming and the Midwest. When burned, this coal produces more than 330 million metric tons of carbon dioxide every year, more than 5% of all U.S. greenhouse gas emissions.
The bankruptcy filing comes amid growing controversy over Peabody’s failure to guarantee the clean up of its mining operations. Instead of guaranteeing mine clean ups with bonds, Peabody has been allowed to offer corporate IOUs, or “self-bonds.” With no cash on hand, Colorado stands to shoulder more than $26,000,000 in mine clean up costs, New Mexico stands to shoulder nearly $300 million, and Wyoming stands to shoulder more than $800,000,000.
Although in response to a complaint filed by WildEarth Guardians, Colorado, New Mexico, and Wyoming have argued that Peabody is financially solvent and allowed to self-bond, today’s bankruptcy announcement indicates those states’ findings are no longer valid. This means Peabody’s “self-bonding” is currently illegal and the company should be required to cease mining operations.
WildEarth Guardians today not only called on Peabody to start keeping coal in the ground, but also called on the company to ensure the needs of workers and retirees are fully met, and that communities are aided as they transition from coal.
“These are hard times, but the path forward is to embrace transition and for Peabody to help make it happen,” said Nichols. “For years, miners have kept the lights on in this nation, it’s the least the company can do to help ensure they’re taken care of in this era of energy transformation.”
In Colorado, Peabody’s only producing mine includes the Foidel Creek mine west of Steamboat Springs, which produced 4.1 million tons of coal in 2015. The company also owns mines that are not producing, including the Sage Creek mine, which started production in 2009 and abruptly shut down.
In New Mexico, Peabody’s operations include the El Segundo and adjacent Lee Ranch mines near Crownpoint. The Lee Ranch mine is currently idled, but the El Segundo mine is the largest coal mine in the state, producing more than 7.4 million tons in 2015.
The company’s largest mines are in the Powder River Basin of northeastern Wyoming, which produce more than 120 million tons every year. The North Antelope Rochelle strip mine, the largest coal mine in the U.S., produces 10% of all coal produced in the nation.
Peabody also has mines in Arizona, Illinois, and Indiana.
WildEarth Guardians today pointed out that Peabody could take meaningful steps today to divest its assets, both saving the company money in the near-term and protecting the climate and Americans in the long-term. These steps include committing to expeditious deadlines to shut down and reclaim its existing mines.
“The coal industry is broken and the solution isn’t to fix it, it’s to get rid of it,” said Nichols. “Now is the time for us all to get serious about seizing the opportunity to genuinely and completely move our nation to cleaner energy and more sustainable and secure economies.”
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