Arch Coal Declares Bankruptcy
Another coal giant, with operations all over the US, declared bankruptcy today.
St. Louis-based Arch Coal hopes to get rid of $4.5 billion dollars in debt through this Chapter 11 reorganization. The company mines coal in Wyoming, Colorado, Illinois, and Appalachian states and says it expects operations to continue during bankruptcy proceedings.
Arch is not alone in its financial struggles. Last year Patriot Coal, Walter Energy, and Alpha Natural Resources all filed for bankruptcy. The industry is dealing with low natural gas prices, a series of bad investments, federal environmental regulations, and declining demand. Last week the Energy Information Administration released data showing coal production last year was at its lowest level since 1986.
In Wyoming, Arch Coal has over 450 million dollars in reclamation liability—what it would cost to clean up its mines. But the state has no money in hand to cover those costs because under a provision called self-bonding, Arch never had to actually put aside money for clean up.
In court documents filed today, the company listed assets of $5.8 billion dollars, and liabilities of $6.4 billion."I mean, this is the second largest coal company in the United States. This is a huge deal. This is a company that everyone thought was too big to fail. And now looks what’s happening, they’re failing miserably," Jeremy Nichols, of the environmental group WildEarth Guardians, said.
Arch’s mines are still operating, despite the bankruptcy, and the company says reclamation is ongoing. The question is: will Arch be able to afford future clean up? In a statement, Wyoming’s Department of Environmental Quality said it is reviewing the bankruptcy filing, but would not comment further.