Year in Brief: Coal companies rally, but future remains hazy

For a time, the coal industry seemed to enjoy the comeback story it long talked about. Coal producers in St. Louis emerged from bankruptcies and were largely aided by a surge in price and more favorable regulatory grounds. But a stagnant demand for coal and the rise of alternative energy sources could dim the industry’s prospects going into 2018 and beyond.

Peabody Energy Corp., the St. Louis-based coal producer, exited Chapter 11 bankruptcy in early April, cutting more than $5 billion in debt. The company soon resumed trading shares and saw a steady climb from about $31 a share to about $38.50 by the end of the year. Peabody chief executive Glenn Kellow collected a $15 million stock bonus after the bankruptcy proceeding.

The Year in Brief looks at the business stories that were most important to Missouri in 2017, and that will continue to shape the state in 2018 and beyond.

U.S. coal companies benefitted from higher prices after China, the world’s largest producer and consumer of coal, cut back on its own production in February. Some U.S. firms shifted their focus from boosting production to securing higher rates of return and credit ratings.

Another Missouri coal producer, Arch Coal, which exited bankruptcy in 2016, said the industry’s resurgence was helped by a wave of regulatory rollback in 2017.

In January, Missouri Attorney General Josh Hawley challenged Obama-era coal mining regulations intended to protect streams. Under President Donald Trump, the Environmental Protection Agency nixed the clean power plan, which called for reduced carbon emissions from coal and other sources, The New York Times reports.

Still, overall demand for coal slowed in 2017. The U.S. Energy Information Administration predicts lower coal production and exports for 2018, citing a lack of growth in coal consumption. Further, growth is expected to be stymied by increased use of natural gas and renewable energies like solar and wind power.

Globally, coal consumption dipped 4.2 percent in 2014 and 1.9 percent in 2016, and the International Energy Agency forecasts that the decline will continue over the next half decade. In the U.S., coal demand could fall by 40 percent by 2040, the agency says.

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