Peabody Energy, the world's largest privately-owned coal company, filed for bankruptcy on Wednesday -- and it wasn't because of President Barack Obama's so-called war on coal.
Peabody cited "unprecedented industry downturn" in its its statement announcing the bankruptcy filing. "Industry pressures in recent years include a dramatic drop in the price of metallurgical coal, weakness in the Chinese economy, overproduction of domestic shale gas and ongoing regulatory challenges," the St. Louis-based company said.
Yes, the Peabody statement does cite "regulatory challenges" -- but only after listing much more powerful market forces undermining the industry globally.
Peabody Energy joins Arch Coal, Alpha Natural Resources, and Patriot Coal among American coal companies that have filed for bankruptcy in recent months.
While environmental regulations do affect the industry, the major Obama administration rules that coal's defenders claim will gut the industry and shut down coal-fired power plants haven't yet gone into effect. The Clean Power Plan, which curbs greenhouse gas emissions at new and existing power plants, has been paused by the Supreme Court, for now. But even if it survives in court, states don’t have to submit plans for meeting the targets until 2018. The high court also blocked a rule on mercury emissions last year.
So it's not Obama's regulations that are killing coal. What's driving the coal industry into bankruptcy is the free market -- competition from cheaper, more abundant natural gas and renewable energy. Meanwhile, the costs of mining coal have increased. Coal production decreased in 2015, and the Energy Information Administration projects it will fall an additional 16 percent this year.
Coal is just no longer a profitable industry in the U.S.
As The Huffington Post has reported, the entire domestic coal industry is now valued at only $22 billion -- about $38 billion less than it was five years ago. And as The New York Times editorial board pointed out last month, coal has become a bad investment, period. Banks aren't financing new coal projects, because it makes no business sense.
Yet you will likely continue to see Senate Majority Leader Mitch McConnell (R-Ky.), along with other senators and people who want to be elected senator, argue that Obama is destroying the coal industry.