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The Western World's Largest Coal Company Declares Bankruptcy
Pretty big news in the energy sector. The article also sites declining demand from China and India as reasons, along with increase in natural gas use. Although those countries have reduced use, they're still using a lot of coal and creating new plants, which the article admits. However, I guess the reduction in demand was still enough to tip the scales for this company. There's no doubt that the market for coal is growing smaller as time goes on. There's also an obvious preference for natural gas, and the issue of fracking and environmental impact is being hotly debated lately.
Peabody Energy, the largest coal company in the Western world, declared bankruptcy Wednesday. The announcement is a towering sign that coal power likely has reached a point of no return in a world seeking cleaner energy sources.
Nearly 200 countries committed last December in Paris to cut emissions of heat-trapping greenhouse gases. Burning coal for electricity emits twice the carbon dioxide of natural gas, and the resulting pollutants have been linked to thousands of premature deaths and asthma attacks annually in the United States alone. Plus, coal is now facing stiffer competition than ever from natural gas, wind, and solar. (Read more about why solar and wind are thriving.)
Market trends for coal “have turned markedly negative over recent months, contrary to many still optimistic forecasts,” says Tim Buckley of the Institute for Energy Economics and Financial Analysis, a research group that supports sustainable energy.
Peabody, based in St. Louis, joins other American coal companies that have recently declared bankruptcy, including Arch Coal and Alpha Natural Resources. Peabody produces roughly 170 million metric tons of coal a year—close to a fifth of the U.S. supply. (The world’s largest producer, Coal India, puts out about twice as much.)
Demand for its product is going down: The U.S. Energy Information Administration predicts natural gas will overtake coal as the leading fuel for the nation’s electricity in 2016. Last year, 80 percent of the power supply that was shut down came from coal.
Pretty big news in the energy sector. The article also sites declining demand from China and India as reasons, along with increase in natural gas use. Although those countries have reduced use, they're still using a lot of coal and creating new plants, which the article admits. However, I guess the reduction in demand was still enough to tip the scales for this company. There's no doubt that the market for coal is growing smaller as time goes on. There's also an obvious preference for natural gas, and the issue of fracking and environmental impact is being hotly debated lately.