Can the fossil fuel industry transcend itself?
By Bob Berwyn
If there’s any silver lining to the global warming story these days, it’s that fossil fuel company stock prices are dropping even faster than global temperatures are going up. Investors aren’t buying the climate-denying baloney being peddled by the coal kings and oil barons anymore, as evidenced by this week’s bankruptcy announcement by Peabody Energy — the world’s biggest coal company.
The company’s debt burden is $10.1 billion, but you can be sure that none of its top executives will be standing in a breadline anytime soon. They probably have their money stashed safely in offshore accounts, but that’s the least of our worries.
Much more troublesome is the company’s long history of denying that greenhouse gas pollution, mainly CO2, is killing the planet. Peabody has described heat-trapping CO2 as a “benign gas” that benefits plants and animals.
It’s tempting to gleefully scorn Peabody execs. At best, they are bumbling businessmen who couldn’t see the writing on the wall when it as three feet in front of them; at worst, ecocidal maniacs, prepared to lead society over the cliff of climate doom. Big banks (Morgan Stanley, Bank of America, BNP Paribas, Citigroup, Crédit Agricole, ING, Natixis, and Société Générale) are backing away from financing coal projects, so even hapless journalists without an MBA could figure out that it wouldn’t be too long before the coal corporations ran out of money.
Putting aside calls to prosecute fossil fuel barons under an emerging standard of international climate justice, Peabody’s bankruptcy actually presents an opportunity for a new course. As the world’s biggest coal company, Peabody should be encouraged to make a voluntary and deliberate shift away from fossil fuels to renewable energy — the only socially and fiscally responsible course for potential investors and lenders.
The money men can’t be overly impressed by Peabody’s recent track record. Over the past year, share prices dropped by 94 percent and the company lost $2 billion in 2015. And there are other fossil fuel giants that need a bail-out: Arch Coal, Alpha Natural Resources, Patriot Coal Corporation and Walter Energy, Inc. have all filed for bankrputcy.
Peabody should reinvent itself what could become an exemplary shift for the industry, Peabody could set a realistic timeline to halt coal operations and build a new network of renewable energy facilities. Even though there’s an urgent need to break the fossil fuel addiction quickly, coal will be used for at least a few more decades, which would give the company to plan for an orderly transition. What a concept — breaking out of the traditional boom-bust cycle of energy economies (and economies overall), could set a new standard of economic and environmental sustainability for other sectors, as well.
But it doesn’t sound like that’s Peabody’s intention. In its official statement, the company took a business-as usual-stance: “All of the company’s mines and offices are continuing to operate in the ordinary course of business and are expected to continue doing so for the duration of the process.”
In statement, the company cited unprecedented “industry pressures,” including “a dramatic drop in the price of metallurgical coal, weakness in the Chinese economy, overproduction of domestic shale gas and ongoing regulatory challenges.” Trying to rally financiers to the cause, Peabody said coal will keep fueling hundreds of existing and new power plants for many decades to come.
That head-in-the-sand approach might buy Peabody a few more years, but it’s not going to solve the company’s long-term problem. Coal is going to die, and if the company doesn’t adapt, it will die along with the resource it exploits, going down in history as an extinct dinosaur.
True capitalists would seize opportunity for profits in the biggest fundamental transformation of the global economy since the Industrial Revolution. If Peabody’s leaders can’t see that path, maybe the shareholders can point them in the right direction.