US Coal Sector Marks First Systemic Bankruptcy

10 months ago

The United States marks the first bankruptcy of a coal company due to the replacement of coal with natural gas and renewable energy sources. Murray Energy filed for bankruptcy due to the low viability of coal as a fuel source. This was reported by The Energy News.

“Murray Energy went bankrupt due to the uncompetitive nature of coal compared to renewable energy sources. Coal is losing market share. Renewable energy sources, on the contrary, are increasing their presence in the market, ”says Howard Learner, President and CEO of the Center for Environmental Law and Policy.

He is not far from the truth. Almost all US coal – 92%, is used to generate electricity. However, it is there that the largest increase in renewable energy sources is noted, which significantly reduces the share of coal. Since 2007, its use has been reduced in the energy sector by 48%.

During the same time, the use of renewable energy sources increased by three quarters.

In this situation, Murray Energy simply has no chance of survival. After all, the company is burdened with social and pension obligations in the amount of $ 8 billion. And her debts amount to 2.7 billion dollars.

The company’s management preferred a quick death to a slow one, and as a result, it filed for bankruptcy.

Against this background, an ambiguous situation is emerging in Russia. The mines are conserved, but this is happening in fields with low profitability. At the same time, even the opening of new mines is noted where it has not been since the days of the USSR.

For example, in the town of Ust-Donetsk, Rostov Region, a new mine is opening. This is the first such event in the south of the country over the past 30 years. The launch of the new production was caused by a reduction in coal imports from Ukraine, as a result of which local CHP plants began to experience fuel shortages.

In addition, Russia is increasing the production and export of coal abroad. So, for 11 months of 2019, 399 million tons of coal were mined in the country, which is 1.2% more than a year earlier. Over the same period, coal exports abroad increased by 0.4% and reached 176 million tons.

Coronavirus exerts downward pressure on these indicators. However, alternative energy sources are not significantly capable of affecting them.

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