Power of Story Send a Tweet        
- Advertisement -

Share on Google Plus Share on Twitter Share on Facebook 1 Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend (1 Shares)  

Printer Friendly Page Save As Favorite View Favorites (# of views)   No comments
OpEdNews Op Eds

Is the Next Taxpayer Bailout the Coal Industry?

By       Message Thom Hartmann       (Page 1 of 2 pages)     Permalink

Related Topic(s): ; ; , Add Tags  Add to My Group(s)

Must Read 2   Valuable 2  
View Ratings | Rate It

opednews.com Headlined to H3 4/5/16

Author 1486
Become a Fan
  (126 fans)
- Advertisement -

Reprinted from Smirking Chimp

Big Coal Clean-up Mess
Big Coal Clean-up Mess
(Image by linh.m.do)
  Permission   Details   DMCA

Eight years after we bailed the big banks to the tune of $14 trillion, US taxpayers could soon be on the hook again -- this time to help out the coal industry.

- Advertisement -

Just a few years ago, Big Coal was riding high on the crest of a nice little boom. Energy prices were high, as was demand from China's rising economy.

And so Big Coal started doing what big industries always do when times are good: consolidated and expanded. Alpha Natural Resources bought Massey Energy. Peabody Energy bought Macarthur Coal. Walter energy took over Western Coal, and so on and so on.

At the time, the debt-fueled consolidation wave looked like a smart business decision. The world showed no sign of backing off its addiction to coal, and energy giants like like Alpha had every reason to believe that gobbling up the competition would bring home the big bucks for decades to come.

- Advertisement -

Well, things didn't really turn out that way.

A combination of slowing demand from China, competition from renewables and natural gas, and tougher regulations, has pushed coal production to its lowest levels in three decades.

Big Coal is now in big trouble.

Lower production and lower energy prices have turned those expansions from the earlier part of the decade into liabilities, especially because they were almost all paid for with debt -- these companies took out massive loans to fund the acquisitions and all the executive bonuses that go with them.

As a result, Arch Coal, Patriot Coal, Walter Energy and Alpha Natural resources have all filed for bankruptcy in the past few years.

Peabody Energy, meanwhile, is pleading with its creditors for extra time to pay off its debts.

- Advertisement -

And, both morally and legally, when coal companies like Peabody go under, they're supposed to clean up the mess they made at their mining sites.

A 1977 law actually requires them to do this.

But even so, many of the big coal companies currently facing financial ruin may not be able to afford the cost of cleaning up their mines because they've handed so much money off to their executives and stockholders.

As The Washington Post reported this weekend, "The biggest coal companies typically pay third parties to ensure that mine sites are cleaned up in the event of financial hardship. But in recent years, many coal companies have relied on a cheaper technique called 'self-bonding,' pledging only their own names and financial wherewithal to guarantee their cleanup obligations."

The problem here is that pledging yourself as a bond doesn't really mean much when you're a company on the edge of bankruptcy.

Next Page  1  |  2

 

- Advertisement -

Must Read 2   Valuable 2  
View Ratings | Rate It

opednews.com

Thom Hartmann is a Project Censored Award-winning New York Times best-selling author, and host of a nationally syndicated daily progressive talk program on the Air America Radio Network, live noon-3 PM ET. www.thomhartmann.com His most recent books are "The Last Hours of Ancient Sunlight," "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights," "We The People," "What Would Jefferson Do?," "Screwed: The Undeclared War (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon Share Author on Social Media   Go To Commenting

The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

S&P Blames Republicans, Mainstream Media Fails to Report It

Globalization Is Killing The Globe: Return to Local Economies

The Great Tax Con Job

The Truth about the Trust Fund-- Destroying Social Security to Destroy the Two Party System

The Deciding Moment: The Theft of Human Right

Healthcare: First They Came for the Banksters