Coal giant Murray Energy seeks bankruptcy protection
A major U.S. coal mining company is seeking bankruptcy protection, despite a flurry of regulatory breaks that its CEO pushed for — and received — from the Trump administration.
Ohio-based Murray Energy filed for Chapter 11 bankruptcy reorganization Tuesday, joining a growing list of struggling miners as utilities switch away from coal to cheaper and lesspolluting renewable energy or natural gas.
The filing marks a significant political failure for Trump, who had sought to end what he called a “war on coal” by Democrats as a key part of his campaign and early presidency. Murray Energy was the country’s fourth largest coal producer in 2018, accounting for 6% of total production, according to the Energy Information Administration. Other major producers that have sought bankruptcy protection this year include Blackjewel Mining in West Virginia and Cloud Peak Energy in Wyoming.
Murray Energy’s move was necessary to access cash and best position it for long-term success, said former CEO Robert Murray. The company’s operations span Alabama, Illinois, Indiana, Kentucky, Pennsylvania, Utah and West Virginia, as well as Colombia, South America.
Government preference for gas and renewable energy to replace coal-fired power generation, combined with a recent severe reduction in coal exports, delivered a one-two punch that an over-extended Murray Energy could not withstand, said Cecil Roberts, president of United Mine Workers of America.
“Now comes the part where workers and their families pay the price for corporate decision-making and governmental actions,” Roberts said in a prepared statement. “But that does not mean we will sit idly by and let the company and the court dictate what happens to our members and our retirees. We have high-powered legal, financial and communications teams in place that will fight to protect our members’ interests in the bankruptcy court.”
West Virginia Senate President Mitch Carmichael said the bankruptcy filing was surprising even with the evident struggles in the coal business, adding that he’s concerned about pensions and worker protections for Murray Energy’s nearly 7,000 employees. U.S. Sen. Joe Manchin, a West Virginia Democrat, said on Twitter that Murray Energy must continue meeting its obligations to pay into pension plans for union miners.
The coal giant had signaled that it wasn’t immune to the industry’s downturn earlier this month when it announced it missed loan and interest payments to its lenders. Brian Lego, a research assistant professor at West Virginia University, said the bankruptcy of such a large company is a heavy blow to an already beleaguered sector.
“It doesn’t bode well as far as the overall state of the industry is concerned,” he said.
As CEO, Murray was averse to filing bankruptcy and in recent years he criticized other coal operators that chose to streamline. In a 2016 interview with The Associated Press, Murray lamented the number of bankruptcies in the coal industry and how his competitors were able to shed debt and re-enter the market.