Major coal company will cut workforce by up to 80%
More fallout from the Obama administration's war on coal as Murray Energy, a large supplier, announced it may have to lay off up to 80% of its workforce.
While stiff competition and low coal prices are also to blame. the driving force for coal layoffs are the draconian rules drafted by the EPA regarding carbon emissions.
Murray Energy Corp. notified employees it may have to slash as many as 4,400 jobs, or about 80 percent of its workforce, because of a combination of stiff regulations, low coal prices, and an increasingly crowded, competitive energy market. Company officials said it anticipates “massive workforce reductions in September.”
Murray’s owner, Robert Murray, is a stalwart supporter of Donald Trump and a fierce critic of President Barack Obama.
The possible layoffs were “due to the ongoing destruction of the United States coal industry by President Barack Obama, and his supporters, and the increased utilization of natural gas to generate electricity,” the company said in a press statement Friday.
The current coal price benchmark is $40 a ton, or half its level from five years ago, when the top Central Appalachian coal price ebbed at nearly $100 a ton.
Another massive coal company, Peabody Energy Corp., was forced to file for Chapter 11 bankruptcy in April, joining the likes of fellow coal country gold standards Arch Coal and Illinois-based Alliance Coal, in contemplating drastic measures to pull itself up and out of the muck and mire. All three Goliaths are struggling in a coal market pummeled by low natural gas prices on one side, and overreaching regulations on the other.
Peabody, which was marked as a bankruptcy risk by regulators prior to the company’s decision, acknowledged it reneged on a $71.1 million interest payment to its lenders, putting in place a month-long grace period.
Much like Arch Coal — which filed for Chapter 11 in January — Peabody’s lenders are asking the once-massive coal producer to restructure its debt through bankruptcy. Arch filed in hopes of keeping $4.5 billion in debt off its financial accounts.
Low coal prices were inevitable once the fracking revolution took hold. Huge amounts of natural gas have been drilled and, with the new anti-coal government rules, have forced a conversion by coal electrical plants to natural gas. This has created a coal glut that has cut prices catastrophically.
Was this necessary? Absolutely not. What are driving the carbon rules is a belief in catastrophic global warming. The rules could have been gradually adopted over a number of years, giving the coal industry time to develop cleaner and more efficient ways of creating energy. But there is a thin veneer of vindictiveness on the part of the administration against fossil fuel producers, blaming them for climate change.
The coal industry was struck down and government is sitting on it to make sure it doesn't rise again.