World's Largest Private Coal Company Files For Bankruptcy (reuters.com)

An anonymous reader writes: Peabody Energy Corp filed for U.S. bankruptcy protection on Wednesday after a sharp drop in coal prices left it unable to service debt of $10.1 billion, much of it incurred for an expansion into Australia. As demand for metallurgical coal fell, particularly in China, Peabody's financial woes intensified. The company took a $700 million write-down on its Australian metallurgical coal assets last year. At home, the U.S. shale boom of the past few years made natural gas competitive with thermal coal, and the Obama administration's environmental regulations raised operational costs. Mr. Peabody's coal train might not be hauling away any more of paradise. Peabody, the world's biggest private-sector coal producer, said it expected its mines to continue to operate as usual and said its Australian assets were excluded from the bankruptcy. "This process enables us to strengthen liquidity and reduce debt, build upon the significant operational achievements we've made in recent years and lay the foundation for long-term stability and success in the future," Peabody Chief Executive Officer Glenn Kellow said in a statement.

Comments

Plastics are about to be a million times cheaper.

[BlueCoder]

Coal is a very cheap hydrocarbon. Very easy and cheap to extract. So it's the most ideal resource for processing new plastics from. Once energy production drops from coal expect plastics to be used even more as they will be cheaper. Imagine plastic effused concrete.

We might actually be heading into the true plastics era. You ain't seen nothing yet.

$10 billion debt ?

[swell]

Who in this century had the misplaced wisdom to invest $10B in this coal company? How is it possible to be so blind to the changing tide in the energy world? Whatever . . . I have a bridge in Brooklyn to sell them if you can find these investors for me.

Re:Yes, but will it be chap 11?

[rtb61]

This story is nothing to do with energy or coal but all about fiscal shenanigans. Track the debt and all other fiscal manipulations and you will likely see the big banks fingerprints all over this either directly or indirectly. Run up debts, pay to much for capital assets, dress it all up and the sell it to pension funds et al and the bet the whole thing will collapse and then buy back those capital assets at a discount, then sell them again at a high price and repeat. You will see this happen again and again and again. The electric car is taking over and fossil fuels days are numbered.

Re:Plastics are about to be a million times cheape

[silentcoder]

There is a longer-term risk to plastics we don't usually consider (because it's *very* long term ?) but it is worth thinking about maybe. The last time there was such an abundance of a molecule that nothing could break down it was lignin. Lignin being the key molecule that allowed plants to form wood and grow into trees. For quite some time there was nothing that could break down lignin - the era is what we now call the carboniferous. The presence of that molecule in abundance had interesting effects on nature. Firstly - a lot of carbon did not get broken down into CO2 when trees died, so it ended up being trapped and forming the fossil fuels we're now burning (interesting how the new unbreakable molecule is made from the results of the old one). In the meantime those trees produced oxygen but because they didn't decompose nothing balanced that out. The earth's oxygen content jumped to 40% - the highest it has been in it's entire history.

In that environment a lot of things that can't grow very big due to inefficient lungs grew gigantic. There was a dragonfly with a 1m wingspan, the largest known arachnid of all time - which had a jaw almost 90cm long (we have no complete fossils but it's estimated to have been well over 3m from head to tail - nothing like that could live today).

And when eventually things DID evolve that could break down lignin... in a very short time, all those creatures went extinct.

Imagine if the results of something evolving that can break down plastics - is actually worse for us than the plastic dumping was... it's entirely possible and the simple fact is that if we keep putting plastic everywhere - things WILL evolve that can eat it. Sooner or later.