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The Final Word by Chuck Swann
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In 1971, singer-composer John Prine recorded a song named "Paradise," which was later "covered" (recorded) by about two dozen more folk artists. The song laments that strip mining has made it impossible to return to a Kentucky town called Paradise because, "Mr. Peabody's coal train just hauled it away."

Well, a batch of creditors is considering hauling Mr. Peabody's coal train away. The Peabody Energy Corporation, the world's largest privately owned coal producer has filed for protection from its creditors under Chapter 11 of the bankruptcy code. This provision is intended to provide "debtors in possession" some breathing room to reorganize their businesses and restructure their indebtedness. Peabody is the 50th coal company to go into some form of bankruptcy since 2012, according to Forbes. US coal producers in bankruptcy account for about 45% of US coal output.

Is coal the dinosaur of fuels? It would seem to be so in the developed countries of North America and Europe, although not yet in the developing countries of Asia, Africa and the rest of the southern Hemisphere. In developed countries, where environmental restrictions are ever-tightening, industrial companies are increasingly looking to natural gas and to wind and solar power for their energy needs.

Natural gas--Cheap and plentiful natural gas, plus a market glut of coal, are the primary factors behind bankruptcies in the coal industry. "The kind of collapse that we're seeing in the coal industry right now" is primarily due to natural gas competition, according to Anna Zubets-Anderson, who covers the coal industry for Moody's Investors Service. Quoted in Environment & Energy Publishing, she says that coal prices are too low for many coal companies to survive and overseas miners are closer to countries where demand is high. "That's the critical issue for Peabody, and that has nothing to do with the Clean Power Plan," she said. The US Energy Information service forecasts that natural gas will supplant coal as he No. 1 source for electricity generation this year.

Solar power--GTM Research reports that the solar industry added a record amount of capacity in 2015, and sees it more than doubling last year's installed capacity in this year. And the US Energy Department sees utility-scale solar becoming this year, for the first time, the biggest source of new US power generation. The US solar market will grow by 119% this year. But analysts say that for solar to reach the projected supply of nearly one-third of the world's electricity, it will ultimately have to cost around 25 cents per watt (in today's dollars), and it is currently nowhere near that target. Even so, Apple, Amazon, Google and Equinix are already buying solar-generated power from several different suppliers.

Wind energy--The American Wind Energy Association says that wind turbines produced just 4.7% of the nation's electricity in 2015. In contrast, coal generated 33% and natural gas only slightly less than coal. Even at its low market share, wind energy generated enough juice to power 17.5 million homes. However, wind turbines represented 41% of new power plant installations last year. A total of 4,304 new wind turbines were installed across the country. Google, Facebook, Amazon Web Services, Procter & Gamble, General Motors, Walmart and Dow Chemical have signed contracts to purchase increasing amounts of wind energy in coming years, according to E&E Newsletter. The State of Texas is currently No. 1 for wind energy, while second-place Iowa got more than 30% of its electricity from wind farms last year. AWEA thinks wind energy is on track to supply 20% of the nation's power by the year 2030.

Chuck Swann is the senior editor of Paperitalo Publications. He can be reached by email at chuck.swann@taii.com.

 

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