Murray Energy Corp, the US’ largest privately-owned coal producer, has filed for Chapter 11 bankruptcy.
The declaration marks the fifth US coal company to file for Chapter 11 assistance in 2019 as cheaper, sustainable energy sources such as wind, solar, and natural gas take coal’s place.
The company said it has reached a resettlement agreement with creditors and will run on existing cash reserves and additional assistance in the form of $350 million in new funding.
Coal, which once fuelled about half of the US’ electricity needs now powers less than a quarter.
The legal manoeuvre also could imperil a major pension fund that covers tens of thousands of coal miners and has fuelled renewed calls for the federal government to support the retirement payments.
“We’re talking about 82,000 miners who are going to lose their pensions, and we’re fighting this,” said Senator Joe Manchin III, in an interview on West Virginia MetroNews, whose state is home to large Murray Energy operations, said in a radio interview on West Virginia MetroNews.
- Renewables break US record as coal plummets says EIA
- Duke Energy ranked No. 1 for investor transparency
- ComEd helps customers get rid of energy vampires this Halloween
The Ohio-based company was started by Robert Murray, who founded the company in 1988, and its expected he will step down as a chief executive and become chairman of the board. His replacement will be Robert Moore, the president and chief executive of Foresight Energy, a Murray Energy subsidiary not part of the bankruptcy proceedings.
Murray, who started working in coal mines at 16 to support his family, grew to own over a dozen mines throughout Ohio, Kentucky, West Virginia, Illinois and Utah, and combined operations produce 76 million tons of coal annually.
Clean energy technologies are hot topics set for discussion at DISTRIBUTECH INTERNATIONAL. Click here to register to attend or for more information about the event.
Murray met with government energy officials in 2017 and presented an “action plan” suggesting the US’ withdrawal from the Paris climate agreement, rolled-back safety and pollution regulations, and the repeal of President Barack Obama’s Clean Power Plan.
Within a year, the administration followed through by pledging to withdraw from the Paris accord, delivering cuts at the EPA and has been suggesting the US to begin to repeal and replace the Obama-era plan to curb climate-warming emissions from coal-fired power plants.
A 2017 study by Columbia University found in a 2017 study that the downturn in coal was mostly due to lower demand for U.S. coal at home and abroad, especially in China.
“Coal’s decline in the US is driven by market forces, notably cheap gas and renewables, not by policy,” said Jason Bordoff, founding director of Columbia University’s Center on Global Energy Policy.
Trade union the United Workers of America, which represents a large part of Murray’s workforce released a statement, saying “Now comes the part where workers and their families pay the price for corporate decision-making and governmental actions”.
Moore hinted in a recent court filing that Murray Energy might seek relief from its pension obligations.
“Murray’s employees are its lifeblood. Nonetheless, the cost of servicing its funded debt, together with the myriad of obligations Murray has to current and former employees, including to a pension fund that has been abandoned by other employers, have substantially reduced liquidity,” Moore told the bankruptcy Court for Ohio’s southern district.