Patriot Coal Bankruptcy

[bhs7695 185]

Well, the Obama Administration has helped to claim another victim in energy.

 

http://www.wvmetronews.com/news.cfm?func=displayfullstory&storyid=53754

 

Patriot Coal Corp., one of the largest coal-producers in West Virginia, will reorganize under Chapter 11 bankruptcy, the company announced in a press release Monday.

 

Officials with the St. Louis-based company said mining operations and customer shipments will continue while Patriot undergoes "comprehensive financial restructuring."

 

The company made the filing in New York and said it had more than $800 million in financing from banks that would help during the bankruptcy process.

 

Patriot Chairman and CEO Irl F. Engelhardt said the company's outlook has been affected by reductions in demand, competition from natural gas and "challenging environmental regulations affecting the cost of producing and using coal." The company also cited a weak international and domestic economy.

 

"The coal industry is undergoing a major transformation and Patriot's existing capital structure prevents it from making the necessary adjustments to achieve long-term success," Engelhardt said in a statement. "Our objective is to use the reorganization process to address important issues in an orderly way and make the Company stronger and more competitive."

 

Patriot has 10 mining operations in West Virginia, including large mines in Logan and Monongalia counties.

 

Patriot previously reacted to the lower domestic demand by reducing production and increasing sales to export markets, the news release says. Company officials announced in February that the Big Mountain mining complex in Boone County would close.

 

That move came just days after Patriot announced it was idling five operations in south West Virginia which mine metallurgical coal.

 

Patriot's stock dropped 72.1 percent Monday after Bloomberg News first reported the bankruptcy filing.

 

Shortly after the announcement, United Mine Workers of America International President Cecil E. Roberts issued the following statement:

 

“The bankruptcy filing by Patriot Coal and its subsidiaries is yet one more piece of mounting bad news for people throughout the coalfields whose lives and whose communities are dependent on coal production. But it is important for UMWA members working at Patriot operations to understand that the company is not shutting down, and that their pay and benefits will not be affected by this filing.

 

“As we enter into this unsettled period at Patriot, let me make it clear that our first priority is our members, whether they be actively working or retired, and their families. We are prepared to work with the company to see to it that the wages and benefits these members have earned through their sweat and blood will continue to be paid."

Edited July 10, 2012 by bhs7695

[BHS03 99]

Obama = Worst President Ever.

[Deleted Account 5,203]

It's Chapter 11. They'll be back. But not for long if Obama's EPA runs roughshod over everything.

[BigBlueAlum 12]

It's Chapter 11. They'll be back. But not for long if Obama's EPA runs roughshod over everything.

 

Honest question: What has Obama changed within the EPA that is causing coal companies to bankrupt?

[Deleted Account 5,203]

Honest question: What has Obama changed within the EPA that is causing coal companies to bankrupt?

 

Sure.

 

In March, the EPA mandated that all new power plants generate no more than 1000 pounds of carbon dioxide per megawatt of electricity produced. Basic renewable energy and nuclear energy can fairly easily meet that standard. The line's set at natural gas, which produces between 800 and 850 pounds per megawatt. Coal plants, however, emit on average almost 1800 pounds per megawatt, WELL outside the mandated range.

 

It's impossible to create a coal-burning plant that is economically profitable for under 1400 pounds per megawatt. Put another way, when one buys carbon-capturing machines needed to burn coal cleaner than 1000 pounds per megawatt, one can in no way turn a profit. Put another way, in the words of one Jake Blues, "I guess we're up **** creek, then."

 

And it's fully intentional.

 

“If someone wants to build a new coal-fired power plant, they can, but it will bankrupt them because they will be charged a huge sum for all the greenhouse gas that’s being emitted.” - Barack Obama

 

Freaking brilliant idea, when 51% of your country's electricity comes from coal.

Edited July 11, 2012 by UVAObserver

[swvacsas2 15]

"Freaking brilliant idea, when 51% of your country's electricity comes from coal. "

 

One of the reasons for the recent hit in coal company stock market share prices has been a series of reports indicating the coal share of the energy generation market slumping below 40%. I saw one report listing it as 32% (think this is a bit too low). A pretty reliable survey listed current market share at 36%. They mentioned that coal fired generating capacity had fallen 19% in a year. If this keeps on coal could be reduced to a 25% or 33% share of the market by the time a new president takes office. No question the situation is dire- as bad or worse than it was in the late 50's and early 60's.

[Deleted Account 5,203]

"Freaking brilliant idea, when 51% of your country's electricity comes from coal. "

 

One of the reasons for the recent hit in coal company stock market share prices has been a series of reports indicating the coal share of the energy generation market slumping below 40%. I saw one report listing it as 32% (think this is a bit too low). A pretty reliable survey listed current market share at 36%. They mentioned that coal fired generating capacity had fallen 19% in a year. If this keeps on coal could be reduced to a 25% or 33% share of the market by the time a new president takes office. No question the situation is dire- as bad or worse than it was in the late 50's and early 60's.

 

That stat was a 2010 stat. I didn't think it had fallen that far. Wow.

[GMan 3,569]

That stat was a 2010 stat. I didn't think it had fallen that far. Wow.

 

Yep, lots of coal fired power plants were "retired" earlier this year (Glen Lyn being one of them).

[bhs7695 185]

Demand is currently about 38-40% for coal nation wide. It's projected to fall another 5-7% before the end of the year. Part of that drop in demand is because of the decline in manufacturing during this recession. Demand world wide has dropped drastically for Met Coal in the last few months. That further places hardships on coal mining operations.

 

When Century Aluminum shut down in Ravenswood, WV a few years back, the AEP-Glen Lyn plant lost their biggest customer at a estimate $25M per year loss in revenue.

[ThomasDenton 79]

With coal dropping each year as our nation's energy supplier, what's making up the difference?

[bhs7695 185]

Honest question: What has Obama changed within the EPA that is causing coal companies to bankrupt?

 

He also has told the EPA to find ways to make it harder for coal operations to meet mandates. For instance, there is a fine particulate matter count that has to be achieved for the water coming from a coal mine. Perrier Mineral Water that you buy in the stores doesn't even meet the EPA's mandate for particulate matter count.

[bhs7695 185]

With coal dropping each year as our nation's energy supplier, what's making up the difference?

 

"Green energy" & Natural Gas.

[redtiger 1,742]

Mostly natrual gas, its dirt cheap right now and meets the EPA guidelines

[BigBlueAlum 12]

Sure.

 

In March, the EPA mandated that all new power plants generate no more than 1000 pounds of carbon dioxide per megawatt of electricity produced. Basic renewable energy and nuclear energy can fairly easily meet that standard. The line's set at natural gas, which produces between 800 and 850 pounds per megawatt. Coal plants, however, emit on average almost 1800 pounds per megawatt, WELL outside the mandated range.

 

It's impossible to create a coal-burning plant that is economically profitable for under 1400 pounds per megawatt. Put another way, when one buys carbon-capturing machines needed to burn coal cleaner than 1000 pounds per megawatt, one can in no way turn a profit. Put another way, in the words of one Jake Blues, "I guess we're up **** creek, then."

 

And it's fully intentional.

 

“If someone wants to build a new coal-fired power plant, they can, but it will bankrupt them because they will be charged a huge sum for all the greenhouse gas that’s being emitted.†- Barack Obama

 

Freaking brilliant idea, when 51% of your country's electricity comes from coal.

 

Fair enough.

 

But if these standards just went into effect in March and they only apply to newly constructed power plants, then how is this already bankrupting coal? I can certainly see how these regulation can hurt coal, but it seems like the effects wouldn't be so immediate.

 

I would say that the recent down turn in coal demand has more to do with low natural gas prices.

[Deleted Account 5,203]

Fair enough.

 

But if these standards just went into effect in March and they only apply to newly constructed power plants, then how is this already bankrupting coal? I can certainly see how these regulation can hurt coal, but it seems like the effects wouldn't be so immediate.

 

I would say that the recent down turn in coal demand has more to do with low natural gas prices.

 

It had been in the works for some time, and I can tell from personal knowledge that the coal and energy companies had plenty of advance warning. Obama's quote in my previous post was from his campaigning in 2008, FWIW.

[BHS03 99]

It doesn't help when the union is corrupt.

[BigBlueAlum 12]

It had been in the works for some time, and I can tell from personal knowledge that the coal and energy companies had plenty of advance warning. Obama's quote in my previous post was from his campaigning in 2008, FWIW.

 

Yeah, I know what you're saying. But the companies could have built plants that would be "grandfathered in" up until March of this year, since the regulation only effects new plants being built after March 2012. So it doesn't make sense that the recent reduction in demand for coal is a result of the EPA regulation.

[BHS03 99]

Yeah, I know what you're saying. But the companies could have built plants that would be "grandfathered in" up until March of this year, since the regulation only effects new plants being built after March 2012. So it doesn't make sense that the recent reduction in demand for coal is a result of the EPA regulation.

 

You mean spend large amounts of money on building those new plants and not seeing the return to justify building them? That would just help speed up Obama's plan of bankrupting coal companies.

[Deleted Account 5,203]

Yeah, I know what you're saying. But the companies could have built plants that would be "grandfathered in" up until March of this year, since the regulation only effects new plants being built after March 2012. So it doesn't make sense that the recent reduction in demand for coal is a result of the EPA regulation.

 

On the other side of the coin, why would the energy producers and coal extractors put any additional effort into a market that is effectively as high as it will ever be again (or until we put another Republican back in the White House)? AEP/Dominion would be better served using the money we spend as fuel...it certainly fits the EPA threshold. CONSOL/Massey would be better served shipping its product to places like China that could give two figs about Mother Nature. And they are, in record amounts. Every rock China gets is one AEP does not. Enough rocks means two things: (1) not needing as many shops as you used to and (2) less energy available for our supply.

 

So, less supply + capped market = drop in production.

[redtiger 1,742]

The problem is you guys are looking at the coal companies as long term sustainable businesses and they arent. Coalcompanies are interested in $ now, not in the future.

 

Hell take Alpha for example, a couple of months ago in the face of declining sales and with potential layoff looming do you know what they did? Reduce spending to help tide them over during these rough times? Try to organize with other coal producers to form an organization to try to regulate the demand/production for coal?(think OPEC) NO, they handed out BIG bonuses for central office staff! Miners underground are losing their jobs and ofc staff are getting bonuses!

 

The truth is the men at the top of the coal business dont give one damn about the future of coal, they are in it to get theirs here in the present(its the nature of the business). 10 years from now they arent gonna care about the miners in their 40s that dont have jobs and have no other training. Thats the story of coal mining worldwide(espicially in Appalachia)

 

And why should the power companies care about coal? from their point of view Obamas regulations have only helped them to discover a cheaper alternative to coal(Natural Gas). Why should they build new plants? Their old ones will run fine on NG w/ very little modification.

 

$ $ $ thats what its all about.

 

You wanna know why Alpha(or any other coal company) didnt prepare for this? heres why I think they didnt bother to prepare

 

http://www.forbes.com/lists/2012/12/ceo-compensation-12_Kevin-S-Crutchfield_FXCN.html

 

If I come across pissed I am but not at anyone on here. Just in general

Edited July 12, 2012 by redtiger

[Deleted Account 5,203]

The problem is you guys are looking at the coal companies as long term sustainable businesses and they arent. Coalcompanies are interested in $ now, not in the future.

 

Hell take Alpha for example, a couple of months ago in the face of declining sales and with potential layoff looming do you know what they did? Reduce spending to help tide them over during these rough times? Try to organize with other coal producers to form an organization to try to regulate the demand/production for coal?(think OPEC) NO, they handed out BIG bonuses for central office staff! Miners underground are losing their jobs and ofc staff are getting bonuses!

 

The truth is the men at the top of the coal business dont give one damn about the future of coal, they are in it to get theirs here in the present. 10 years from now they arent gonna care about the miners in their 40s that dont have jobs and have no other training. Thats the story of coal mining worldwide(espicially in Appalachia)

 

And why should the power companies care about coal? from their point of view Obamas regulations have only helped them to discover a cheaper alternative to coal(Natural Gas). Why should they build new plants? Their old ones will run fine on NG w/ very little modification.

 

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

 

Two problems with your premise:

 

1. Coal companies HAVE been long-term sustainable businesses. Sure, the little "local hole-in-the-hill" businesses went under, most of them in the '70s, but small businesses have a higher rate of failure anyway. Think about it: there are more of them, and they don't have the capital to weather storms. CONSOL and Massey do. Not really a surprise.

 

2. You assume that the "men at the top" are categorically looking to jump ship in the next 10 years. With hundreds of years of coal left in the hills, and ready and able buyers in China and India if not in the U.S., that would be a catastrophically dumb business strategy. You're going to lose jobs at the menial level, because the cost of shipping the coal internationally is extreme compared to shipping it 200 miles. The makeup in cost must come from somewhere, and that's the most expendable source.

 

Coal's going to be important long after our bodies rot, even if the U.S. completely abandons it.

[redtiger 1,742]

Coal has always been Boom and Bust(not really sustainable), never has the industry tried to regulate itself(limit production). In good times, mine as much as possible before the market turns down again(not good management). They work themselves out of a job, but its ok because they made millions during the boom.

 

Those big companies have changed hands/names multiple times(not really the same company). When the market is down the owners do jump ship and when it comes back up someone picks up the pieces and gets theirs until the next bust.

 

Coal will be around, thats for sure but coal usage in America has seen its last good days imo. Alot of Alphas production is geared toward shipping met coal overseas(N Europe). The buyouts Alpha has been a part of in the last few years, were about reserves, not open mines. Down the road Alpha will be a major player(even moreso than now). China has alot of coal but I just see them burning thru their reserves and needing American coal, im not sure what kind of coal reserves India has access to but at some point they will be buying alot of American coal also.

Edited July 12, 2012 by redtiger

[bhs7695 185]

Anyone want to trust the EPA??

 

http://www.wvmetronews.com/hoppy.cfm?func=displayfullstory&storyid=54482

 

Common sense and the rule of law are catching up with the EPA.

 

Tuesday, the U.S. Court of Appeals in Washington, D.C., in a 2-1 ruling, struck down the EPA’s controversial rule for cross-state air pollution. The court found that the EPA overreached in its attempt to further limit emissions from power plants and other sources that originated in one state and then drifted downwind to another.

 

The EPA has the authority to require states to curb downwind emissions, but under the new rule imposed last year (which has been on hold because of the court challenge) “states may be required to reduce emissions by more than their own significant contributions (emphasis added) to pollution downwind.”

 

Judge Brett Kavanaugh wrote, “Our limited, but important role is to independently ensure that the agency stays within the boundaries Congress has set. The EPA did not do so here.”

 

Once again, this Administration’s EPA has been caught taking the law into its own hands.

 

Earlier this month, federal Judge Reggie Walton ruled that the EPA had overreached when it decided on its own to make it harder for coal mine operators to get the necessary permits.

 

Judge Walton said the EPA had “overstepped its statutory authority… and infringed on the authority afforded state legislators.”

 

Before that, federal Judge Amy Berman Jackson ruled against the EPA in its attempts to withdraw its approval for the expansion of Arch Coal’s Spruce #1 mountaintop removal mine in Logan County.

 

Judge Jackson accused the EPA of engaging of “magical thinking” to justify its attempts to block the permit.

 

Also this year, the U.S. Supreme Court, in a unanimous ruling, found in favor of Mike and Chantell Sackett. The EPA accused the Idaho couple of violating the Clean Water Act by filling a small wetland on their property where they planned to build a house.

 

Justice Antonin Scalia said the EPA was using the Clean Water Act to strong-arm the couple into compliance without a chance for appeal.

 

Is anyone starting to see a pattern here?

 

Who can forget the case of Al Armendariz. He’s the former EPA regional administrator who famously explained that his philosophy on enforcement “was kind of like how the Romans used to conquer little villages in the Mediterranean. They’d go into a little Turkish town somewhere, they’d find the first five guys they saw and they’d crucify them. And then, you know, that town was really easy to manage for the next few years.”

 

Armendariz was forced to resign, even though his crude description was not far off from what the EPA’s approach has been under Administrator Lisa Jackson.

 

Interestingly, Armendariz has since joined the Sierra Club, which has a stated goal of eliminating coal and natural gas from the country’s energy portfolio.

 

Government agencies don’t have free reign. They have to either follow the clear intent of the Congress, which made the law, or follow what the courts call “a permissible construction of the statute.”

 

There are two ways to bring this EPA back in line: keep up the court challenges or change administrations.

[Deleted Account 5,203]

There are two ways to bring this EPA back in line: keep up the court challenges or change administrations.

 

One reason of the hundreds upon hundreds to vote for Romney in November.

[cwood78 161]

back in 94 or 95 the owner of the company i worked for, donated something like 5 mil. to uva wise, then a week later, got notice that we would get a paycut of $1.00 per hour, some got a bigger cut. needless to say, there were some mightly disgruntled employees. we knew then,the company truely didnt care.............:mad: