Coal giant Murray Energy files for Chapter 11
Murray Energy, once a symbol of American mining prowess, has become the eighth coal company in a year to file for bankruptcy protection. The move Tuesday is the latest sign that market forces are throttling the Trump administration’s bid to save the industry.
The collapse of the Ohio-based company had long been expected as coal-fired power plants close across the country.
Its chief executive, Robert Murray, has been an outspoken supporter and adviser of President Donald Trump. He had lobbied extensively for Washington to support coal-fired power plants.
Murray gave up his position as CEO and was replaced Tuesday by Robert Moore, the former chief financial officer. Murray, who will remain chairman, expressed optimism the company would survive with a lighter debt load.
“Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity,” he said in a statement, “and best position Murray Energy and its affiliates for the future of our employees and customers and our longterm success.”
Murray, the nation’s largest privately held coal company, has nearly 7,000 employees and operates 17 mines in six states across Appalachia and the South as well as two mines in Colombia. It produces more than 70 million tons of coal annually.
But with utilities quickly switching to cheap natural gas and renewable sources, like wind and solar power, Murray and other coal companies have been shutting down mines and laying off workers. Murray’s bankruptcy follows those of industry stalwarts like Cloud Peak Energy, Cambrian Coal and Blackjewel.
Murray was most closely identified with Trump administration promises to reverse the industry’s fortunes.
Murray contributed $300,000 to Trump’s inauguration. Shortly after, he wrote Trump a confidential memo with his wish list for the industry, including shaving regulations on greenhouse gas emissions and ozone and mine safety, along with cutting the staff at the Environmental Protection Agency by at least 50 percent. Several of the suggestions were adopted.
With Murray applauding his efforts, Trump installed former coal lobbyists in regulatory positions and slashed environmental rules. But utilities continued to shut down coal plants that could not compete with a glut of natural gas produced in the nation’s shale fields. More recently, the improved economics of wind and solar energy production hastened coal’s decline.
Once the source of over 40 percent of the country’s power, coal produced 28 percent in 2018. That share has declined to just 25 percent this year, and the Energy Department projects it will drop to 22 percent next year.
The only bright spot for Murray and other coal companies in recent years has been growing demand from Europe, Latin America and Asia, but exports have dropped by nearly 30 percent in the third quarter compared with last year. All told, domestic coal production is expected to decline by 10 percent this year from 2018 and by an additional 11 percent in 2020, the Energy Department said recently.
Environmentalists cheered the bankruptcy.
“Bob Murray and his company are the latest examples of how market forces have sealed the fate of coal, and there’s nothing the president can do about it,” said Ken Cook, president of the Environmental Working Group.
Murray entered into a restructuring agreement with some of its lenders and said it had received $350 million in loans to keep operating its mines.
Many coal companies have gone through bankruptcy in recent years only to reemerge smaller, with reduced debts and eroded pension and health care benefits. Murray had been the last coal company contributing to the pension fund of the United Mine Workers of America.
In a statement, the organization’s president, Cecil Roberts, warned that Murray “will seek to be relieved of its obligations to retirees, their dependents and widows,” adding, “We have seen this sad act too many times before.’’
For coal to grow again in the United States and other industrialized countries, energy experts and even some coal executives say a concerted effort will be needed to develop technologies to capture carbon dioxide emissions from power plants. So far, the Trump administration has stopped short of pushing for such an initiative.