The world's largest coal company filed for bankruptcy Wednesday, citing a "historically challenged" market for its carbon-intensive fuel.
Peabody Energy is the third of the top five US coal producers to seek protection from creditors since 2014. Its Chapter 11 filing lists more than $10.1 billion in debt, and Peabody President Glenn Kellow called the move "the right path forward."
"The factors affecting the global coal industry in recent years have been unprecedented," Kellow said. Cheap, cleaner natural gas is cutting into coal's share of electrical production, and efforts to rein in carbon emissions and head off dangerous levels of global warming are putting more pressure on the business. Kellow also blamed China's economic slowdown for reducing demand.
Environmentalists called Peabody's bankruptcy a milestone in the effort to replace high-carbon energy sources.
"The biggest coal giant has fallen, and Peabody Energy's bankruptcy should serve as a wake-up call to anyone promising that coal's glory days will return," Mary Anne Hitt, the head of the Sierra Club's Beyond Coal Campaign, said in a written statement. Hitt said the group would be watching the bankruptcy process to make sure Peabody doesn't walk out on its responsibilities to "to workers, communities, and the environment."
Peabody's fortunes had been closely watched after the recent bankruptcies of two of its leading rivals, Arch Coal and Alpha Natural Resources. Those three companies accounted for just over 40 percent of American coal production in 2014, according to the US Energy Information Administration.
Peabody stock had been trading in the $2 range for the past month as it struggled to avoid Chapter 11. Bankruptcy will let the company cut its debt load "and lay the foundation for long-term stability and success in the future," Kellow said.
But Jenny Marienau, the manager of the US divestment campaign at 350.org, called Peabody's filing "a harbinger of the end of the fossil fuel era."
"Peabody is crashing because the company was unwilling to change with the times," Marienau said. "They doubled down on the dirtiest of all fossil fuels, and investors backed their bet, as the world shifted toward renewable energy. They have consistently put profit over people, and now their profits have plummeted. Our world has no place for companies like Peabody."
The singer John Prine name-checked Peabody in his 1971 song "Paradise," which lamented the damage done by strip mines around his father's western Kentucky hometown. The tune rankled the company for decades — but in a statement issued through his label, Prine told VICE News he wouldn't gloat over the company's bankruptcy.
"I take no delight in anybody's misfortune," he said. "I just hope the workers and their families will be taken care of."
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