Coal news and updates

Boosted by higher prices and presidential promises of aid, U.S. coal is having a comeback season. Yet a looming quandary remains: Demand continues to shrink.

 

In the boom-bust cycles of old, the fuel’s use grew relentlessly as a fleet of coal-fired power plants fed America’s hunger for electricity. Now, a new age of clean, cheap natural gas and renewables has emerged, thanks to the shale boom and fears of global warming. That’s led to almost 50 gigawatts of coal-fired generating capacity being shut down since 2012, enough to power New York and Vermont combined. And no new coal plants are being built.

 

In the past decade, six major suppliers have gone bankrupt, some more than once. Now, some producers say they’re remaking their playbooks to survive in a dwindling market. High rates of return and credit ratings are seen as more key to the future than boosting production.

 

“Lots of management teams in the past were focused on volume, volume, volume,” George Dethlefsen, chief executive officer of Corsa Coal Corp. in Canonsburg, Pennsylvania, said in a phone interview. "Well, wait a second guys. Let’s think about leverage ratios, credit metrics. Let’s think about rates of return. Those are the metrics you need to be focused on."

Source:bloomberg