As coronavirus stifles demand, two more coal companies file for bankruptcy
Two additional coal companies this week filed for bankruptcy as the coronavirus pandemic accelerates an already existing decline in the industry.
White Stallion Energy LLC and Lighthouse Resources Inc. filed for Chapter 11 protection Wednesday and Thursday, respectively, in the U.S. Bankruptcy Court in Wilmington, Del.
According to The Wall Street Journal, both companies, which own mines in Illinois, Indiana, Montana and Wyoming, blamed the bankruptcy filings largely on low coal prices and reduced consumption across the country.
The Energy Information Administration (EIA) found that the country’s power sector consumed 30 percent less coal in the first half of 2020 than during the same period in 2019.
The coal industry has also been hurt by the increased turn to natural gas and renewable energy in the United States.
The reported earlier this year that the U.S. consumed more renewable energy, such as from wind and solar power, than coal for the first time since 1885.
In this week’s bankruptcy filings, White Stallion said that it would be suspending mining and had already fired its approximately 260 employees. White Stallion added in its court papers that it plans on rehiring 24 employees to bring coal to its largest consumer, Indiana’s Duke Energy.
According to the Journal, White Stallion received $10 million from the federal government’s COVID-19-era Paycheck Protection Program, making the company among hundreds of businesses that have filed for bankruptcy after receiving a PPP loan.
In the court filing, White Stallion reported about $104 million in debt.
On Thursday, Lighthouse announced layoffs at its Decker mine in Big Horn County, Mont. The company said it would continue serving customers while in Chapter 11, which “will give it time to consider options for the best path forward.”
According to court documents, Lighthouse had laid off 76 employees, leaving the company with just more than 90 workers at the time of the Chapter 11 filing.
“In light of the challenging market conditions and other impacts on our business from Covid-19, we have been required to reduce costs and reorganize our business, resulting in the reduction of our workforce in Montana,” Lighthouse CEO Everett King said in a press release.
“We are deeply saddened by this impact on individuals, families and communities,” he added.
The Trump administration vowed to help the coal industry during the 2016 campaign and has worked to undo Obama-era regulations targeting coal-powered plants meant to lower greenhouse gas emissions and combat climate change.
President-elect Joe Biden has said he wants to push an energy plan that further moves the U.S. toward renewable energy sources, and away from sources such as coal and fossil fuels.
In October’s second presidential debate in Nashville, Tenn., Biden said he would “transition from the oil industry,” but later clarified these comments by telling reporters, “We’re not getting rid of fossil fuels for a long time.”
“Eventually we’re going to have to go to oil, but we’re not getting rid of fossil fuels. We’re getting rid of the subsidies for fossil fuels,” he said.
Biden’s official climate plan calls for net-zero emissions by 2050, a process that would shift the U.S. away from fossil fuels. Biden has also called for significant investments in clean energy as a way to provide an alternative to fossil fuels.