The Year in Brief: Coal’s continued slump portends trouble for Missouri firms

In brief

Coal producers continued to struggle through 2015, and the industry’s ills were felt acutely in the St. Louis area, home to two of the largest coal companies in the U.S., Arch Coal and Peabody Energy.

Increased competition from natural gas and renewables, looming Environmental Protection Agency regulations on carbon emissions, global coal oversupply and the December Paris Climate Summit have all contributed to coal companies’ continued troubles.

The Year in Brief offers a look at Missouri’s most important business stories of 2015 and previews how those stories could play out in 2016 and beyond. 

Arch and Peabody both went through layoffs, sought to restructure debt in hopes of avoiding bankruptcy, and saw the continued decline of the investor interest. In December, Arch learned that it faced delisting by the New York Stock Exchange because its market capitalization had fallen below the exchange’s minimum level.

Another coal company formerly based in the St. Louis area, Patriot Coal, filed for bankruptcy in May for the second time in three years. The company, spun off from Peabody Energy in 2007, moved its corporate headquarters from Creve Coeur to West Virginia in January.

In August President Barack Obama unveiled the final version of the Clean Power Plan to regulate carbon dioxide emissions. Under the plan, the Environment Protection Agency assigned each state a percentage by which it must reduce its carbon output. In Missouri, Carbon output by 2030 needs to be cut roughly 21 percent from its 2012 levels.

However, Missouri Attorney General Chris Koster announced the Show-Me State will join more than 20 other states in suing the EPA for exceeding its authority in issuing the new limits.

In the future

According to the U.S. Energy Information Administration, U.S. coal production is expected to decline by an additional 29 million short tons, or three percent, in 2016.

Moody’s Investors Service said the outlook for the U.S. coal industry remains dim. Moody’s forecasts a roughly 10 percent year-over-year decline in the industry’s EBITDA for 2016, according to a release.

In a graphic

Since 2011, the stock prices of Arch Coal and Peabody Energy have steadily tumbled.


On social media

Social media users chimed in on both sides of the debate over the EPA’s new carbon limits. The Association of Missouri Electric Cooperatives welcomed Missouri Attorney General Chris Koster’s announcement of a lawsuit against the EPA.

Meanwhile, environmental advocates urged politicians to support the Clean Power Plan.

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