Mark Sumner of Daily Kos takes a look at the current state of the coal industry, including the way it is financed and the bonds it must cover to restore the landscape when the mining is done. Part of the way it is financed is through the projected value of the coal still in the ground (Sumner explains in detail). That value is rapidly falling. The book value of the companies is falling and could “disappear in a puff of accounting smoke if challenged.” There is vast overcapacity. The industry could collapse.
Which is a good thing since burning coal is so disastrous to the environment – greenhouse gases, toxic waste, acid rain, mercury, radiation.
Except coal still supplies a third of our nation’s electricity. If coal collapses before alternatives are online there would be huge economic consequences.
So we could have a messy collapse or we could have a neat collapse. A messy collapse is when all the companies fail together. A neat collapse is when the fail one at a time and the others take up the slack for a while.
Democrats should be planning to help coal die with dignity by implementing plans that transition workers away, speed up implementation of reclamation plans, and assist power companies in getting replacement systems online.
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