Peabody Coal's long-awaited concession that bankruptcy lies ahead signals the curtain fall on the long-running, silent and secret bailout of the management of the U.S. coal industry. As one analyst put it when Peabody announced that it faced a "going concern" letter, "It's the end of the era of publicly traded coal companies."
Peabody is about to join Arch, Murray, Alpha and other coal producers in bankruptcy. The total market value of the U.S. coal sector since 2011 has plunged from more than $70 billion to barely $6 billion and most of the remaining value is natural gas operations owned by Consol Inc. Coal stocks have dropped far faster than coal consumption, because the industry, ignoring competition from renewable energy and dismissing pressure to clean up the air, recklessly invested in far greater mining capacity than the market needs. Coal prices dropped by 75 percent.
But even as King Coal inescapably rushes towards bankruptcy, the companies are being showered by regulators and judges with extraordinary largesse. This is not a bailout like GM and Chrysler, (or even the banks), when the taxpayers took very large risks but gained a good shot at rescuing operating enterprises and the value they create. This bailout largesse to coal, largely driven by Republican politicians, is showering down on shareholders and management of enterprises which cannot and will not be rescued, just to postpone the moment at which they are reorganized, thus fattening management and shareholders before the evil moment.
And who pays? The general taxpayer for sure, but more spectacularly sick and retired mine workers and their communities.
Peabody Energy is the world's largest coal company & it gave taxpayers the shaft https://t.co/gFVa5M2iFc @voxdotcom https://t.co/SFiWWxVTDO— CTJ (@CTJ)1459346083.0
I know, Republican politicians, other than Donald Trump, offer as an article of faith that they stand up against bailouts. In fact, the Club of Growth in its first attack on Trump, made a core issue of the idea that Trump has supported the Wall Street Bailout.
Except bailout opposition, it seems, falters when it comes to fossil fuels. Republicans took vicious exception to the Obama Administration's willingness to use federal loan guarantees to help renewable energy companies – most spectacularly Solyndra—even though these loan guarantees, overall, came in under budget, and cumulatively created a powerful clean energy sector, but still, as you have heard thousands of times, taxpayers lost $535 million dollars when Solyndra failed.
So you would expect an enormous conservative outcry if major multinational corporations exploited loopholes in federal law to stick the taxpayers not with hundreds of millions, but with bills for billions for their business mistakes? Right?
Well, maybe not. Because the nation's coal mining companies have been doing exactly that, with the active cooperation not of liberal Democrats but of judges and regulators in conservative Republican states like Missouri, Wyoming and West Virginia. Coal companies hold in trust the funds that pay their workers' pensions and health care. But over the past few years companies like Peabody Coal divided themselves into bits and pieces. Certain bits kept the parts of the coal business Peabody thought were money makers. Other bits (with sexy names like Patriot Coal) got assigned mines that were no longer profitable, along with bundled liabilities like retiree pensions and health care. When Patriot Coal, predictably, filed for bankruptcy it stuck the taxpayers and the workers with the obligations.
In one elegantly vicious move, 208 retired coal miners who had no connection to Patriot Coal, had never worked for it, and whose pensions were fiduciarily sound, saw their retirement siphoned off to pay for legal fees and other bankruptcy costs. In essence, Alcoa, which is not going bankrupt, paid Patriot, which was, to assume pension obligations for these 208 miners. Alcoa gave Patriot reasonable money. But instead of using the funds to pay for pensions, Patriot is using it to pay lawyers, which, in a bankruptcy, it thought it could get away with. Eventually, it had to back down. But 12,000 other mine workers, with more direct relationships with Peabody, face the loss of their hard earned pension and health care benefits.
Coal companies are also required to post bonds to pay for reclaiming strip mined land. But those with creatively puffed up balance sheets were allowed by states to “self bond" and guarantee their own obligations. Arch Coal, for example, was allowed to qualify for “self-bonding" only four months before it went bankrupt. Alpha Resources has obligations of almost a half billion dollars. But over the past three years even “strong" coal companies like Peabody have plummeted towards bankruptcy, making it impossible for them to actually pay their accumulated reclamation costs. Yet state regulator's took no effective action to make them put up bonds for the reclamation costs everyone knew were coming. More than 75 percent of Wyoming's massive clean up bill is “self-bonded" by companies most of which no longer exist or will shortly no longer exist.
Now given Republican Congressional rhetoric about President Obama's “war on coal" and the latest indignation about Hilary Clinton's clumsily phrased honesty in recognizing that a lot of coal companies are going out because the market no longer needs the coal they produce, you might think that Democrats had been fierce in cracking down on coal company scofflaws. Alas, until very recently both parties have looked the other way. Obama's Interior Department continued to award sweetheart coal mining leases of publicly owned coal with no competitive bidding. It permitted coal companies to create shell companies to avoid paying legally obligatory royalties. It allowed the states the play along with the “self-bonding" rip-off. And the Justice Department took no effective action to prevent the coal industry from shifting its pension and health care debts to the taxpayers and workers.
This 24-year-old citizen activist is running for Congress
Finally, in February 2015, the Administration moved, proposing a “Power Plus" plan to help protect miner's pensions, health care and the economic based on coal dependent communities. (It also moved in the same month to reform royalty abuses).
But, of course, by this time such aid required Congressional appropriations. Bankruptcy courts had already let Patriot and other companies dump their pension and health care obligations. The same Republican leaders who blasted Obama for making war on coal denounced the new plan. Leading the charge? Kentucky Senator and Majority Leader Mitch McConnell, who made it clear that his hostility towards the United Mines Workers trumped whatever concern he might have had for Kentucky coal miners. In December, McConnell personally blocked efforts to include community and pension rescue efforts in the budget deal Republicans cut with Obama.
Here there is a partisan difference. Democrats who are waging “War on Coal" favor keeping the promise America made to coal miners. Hilary Clinton has strongly advocated help for the workers and communities.
How do conservatives justify this stand? By calling any effort to ensure that miners get the pensions they earned yes, “a bailout." But conservative attacks on such efforts to protect pensions simply don't mention the shenanigans by which companies like Peabody got rid of their debts. These are actually worse than bailouts. In a bailout the calculation is that a healthy enterprise emerges. But there is no prospect in these cases that Patriot, Arch or Shortly Peabody is going to bounce back.
These are give-aways. What is hard to calculate is how big and costly they are. The UMW Pension fund, for example, protects more than 100,000 coal miners and former miners. It has $3.8 billion in assets, but must pay out about $600 million a year—so if it goes bankrupt, (ignoring the likely collateral damage to the whole U.S. pension insurance system) over a decade $6 billion could be transferred from the coal industry to the public—12 Solydras! How much are the reclamation costs being forgiven? Well, an earlier generation of mining reclamation costs are now estimated to cost $17 billion—34 Solyndras. And the pending defaults on self-bonded mining costs seem likely to run another $2.7 billion. So the total give-aways to coal companies as they race towards bankruptcy seems to be over $25 billion—almost 50 Solyndras. That's quite a bailout—the GM bailout cost taxpayers only $11.2 billion, less than half as much and the taxpayers got a healthy GM out of the deal—we get nothing from coal give-aways.
So the next time some economist earnestly lectures you on the need to avoid subsidizing clean energy, or a Republican says government shouldn't pick winners and losers, ask them to show you where—and how loudly—they denounced the Big Coal Bailout of 2016.
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By Tara Lohan
Our plastic pollution problem has reached new heights and new depths.
Scientists have found bits of plastic on the seafloor, thousands of feet below the ocean's surface. Plastic debris has also washed ashore on remote islands; traveled to the top of pristine mountains; and been found inside the bodies of whales, turtles, seabirds and people, too.
1. There’s a lot of it.<p>In a September study published in <em>Science </em>about the growth of plastic waste, an international team of researchers estimated that 19 to 23 million metric tons — or 11% of plastic waste generated — ended up in aquatic ecosystems in 2016. And even with countries pledging to help cut waste or better manage it, the amount of plastic pollution is <a href="https://science.sciencemag.org/content/369/6510/1515" target="_blank" rel="noopener noreferrer">likely to double</a> in the next 10 years.</p><p>A <a href="https://science.sciencemag.org/content/369/6510/1455" target="_blank">study</a> about solutions to plastic waste, published in the same issue, attributed the plastic pollution epidemic to a rise in single-use plastic and "an expanding 'throw-away' culture." The researchers also found that waste-management systems simply can't deal with the onslaught of plastic, which is why so much of it ends up in the environment. We now know that only <a href="https://www.nationalgeographic.org/article/whopping-91-percent-plastic-isnt-recycled/" target="_blank">9% of the plastic products</a> we use actually get recycled.</p>
2. The United States is a big culprit.<p>Plastic pollution is a global problem, but the United States plays an outsized role. In 2016 the United States was responsible for more plastic waste than any other country, a <a href="https://advances.sciencemag.org/content/6/44/eabd0288" target="_blank">new study</a> in <em>Science Advances</em> found. Some of that waste was dumped illegally within the country and some was shipped to other countries that lacked the necessary infrastructure to handle it.</p><p>"The amount of plastic waste generated in the United States estimated to enter the coastal environment in 2016 was up to five times larger than that estimated for 2010, rendering the United States' contribution among the highest in the world," the researchers concluded. Part of that is because the United States ranks second in exporting plastic scrap.</p>
3. It threatens wildlife and ecosystems.<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDg3MTUwMi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzMzE1MzM2MH0.YL5C-5GF2mq9OZBLSkcAnreq2Mai20DweKSNqeUSWM4/img.jpg?width=980" id="20233" class="rm-shortcode" data-rm-shortcode-id="3db4a05d5d417d925a770cf309db1db1" data-rm-shortcode-name="rebelmouse-image" />
A giant otter plays with a plastic bottle. Paul Williams / CC BY-NC 2.0<p>Out of sight (for Americans) is <em>not </em>out of mind — and definitely not out of our waterways. An estimated 700 marine species and 50 freshwater species have either ingested plastic or been entangled in it.</p><p>"If we don't get the plastic pollution problem in the ocean under control, we threaten contaminating the entire marine food web, from phytoplankton to whales," George Leonard, the Ocean Conservancy's chief scientist and coauthor of the September <em>Science </em>study about plastic waste's increase, <a href="https://www.nationalgeographic.com/science/2020/10/plastic-pollution-huge-problem-not-too-late-to-fix-it/" target="_blank">told <em>National Geographic</em></a>. "And by the time the science catches up to this, perhaps definitively concluding that this is problematic, it will be too late. We will not be able to go back. That massive amount of plastic will be embedded in the ocean's wildlife essentially forever."</p><p>Microplastics have also been found in terrestrial animals, soil, drinking water and, not surprisingly, <a href="https://www.forbes.com/sites/victoriaforster/2020/08/18/microplastics-found-in-human-organs-for-the-first-time/?sh=42994a4e16f2" target="_blank" rel="noopener noreferrer">in our own bodies</a>, although it's not clear yet just how dangerous that is for people.</p>
4. The fracking boom is producing a plastic boom.<p>Despite the known risks of plastic pollution and concern over its mounting presence in the environment, plastic production — driven by fossil fuels like fracked gas and its component chemicals — is on pace to increase by 40% in the next 10 years.</p><p>The American Chemistry Council <a href="https://www.americanchemistry.com/Shale-Infographic/" target="_blank" rel="noopener noreferrer">boasted that shale gas drilling is driving a surge</a> in plastic production, including the investment of more than $200 billion to fund new and expanded operations at 343 production plants in the United States.</p><p>On the ground this means more harmful pollution along the Gulf Coast's "Cancer Alley," where petrochemicals have been manufactured for decades in low-wealth communities of color. And it means the build-out of new facilities in Rust Belt states such as Ohio, Pennsylvania and West Virginia.</p><p>Fracking also causes harmful greenhouse gas emissions, like methane, to be released into the atmosphere — amplifying the climate crisis. The refining process and the incineration of plastic waste also further drives greenhouse emissions and hazardous pollution.</p>
A petrochemical plant in Houston's ship channel. Louis Vest / CC BY-NC 2.0
5. Solutions are multifaceted.<p><a href="https://www.dw.com/en/plastic-pollution-do-beach-cleanups-really-make-a-difference/a-46196975" target="_blank" rel="noopener noreferrer">Beach cleanups</a> tend to make headlines, but it's a losing battle as long as petrochemical companies keep producing so much plastic and we keep using plastic for products we're meant to toss after a single use.</p><p>The September study in <em><a href="https://science.sciencemag.org/content/369/6510/1455" target="_blank">Science</a></em> on plastic solutions found that it's possible to cut plastic pollution — perhaps as much as 80% by 2040 — but it will take systemic change both in reducing the amount of plastic produced and in better managing the waste stream.</p><p>Regulatory efforts can help this process, including by regulating plastic as a pollution source under the Clean Water Act.</p><p>Efforts to ban single-use plastics, as the European Union aims to do by 2021, are another positive step. So too are "<a href="https://therevelator.org/california-plastic-legislation/" target="_blank" rel="noopener noreferrer">circular economy laws</a>," which have been <a href="https://www.congress.gov/bill/116th-congress/house-bill/5845?q=%7B%22search%22%3A%5B%22H.R.5%22%5D%7D&s=1&r=5" target="_blank" rel="noopener noreferrer">introduced, but not yet passed</a>, in the United States.</p><p>These laws would halt the production of new petrochemical facilities and encourage businesses to take responsibility for the full lifecycle of the products they produce by requiring them to be reused, adequately recycled or composted.</p><p>Getting circular economy laws enacted, though, will mean enough public and political will to counter the petrochemical, fossil fuel and plastic industries.</p><p>At <em>The Revelator</em>, we'll keep covering the push for solutions to the plastic problem and new science to better understand the threats. And if you want to know more about how wildlife has already been affected, what laws could help, whether industry will be held accountable and more, check out these stories from our archives:</p><p><strong>Laws and Regulations</strong></p><p><strong></strong><a href="https://therevelator.org/plastic-pollution-warnings/" target="_blank">Plastic Pollution: Could We Have Solved the Problem Nearly 50 Years Ago?</a></p><p><a href="https://therevelator.org/clean-water-plastic/" target="_blank" rel="noopener noreferrer">How an Old Law Is Helping Fight New Plastic Problems</a></p><p><a href="https://therevelator.org/california-plastic-legislation/" target="_blank" rel="noopener noreferrer">New California Bill Could Revolutionize How the U.S. Tackles Plastic Pollution</a></p><p><a href="https://therevelator.org/plastic-pollution-laws/" target="_blank" rel="noopener noreferrer">What Laws Work Best to Cut Plastic Pollution?</a></p><p><a href="https://therevelator.org/plastic-illegal/" target="_blank" rel="noopener noreferrer">Can Plastic Ever Be Made Illegal?</a></p><p><strong>Impacts</strong></p><p><a href="https://therevelator.org/toxic-plastic-pollution-food-chain/" target="_blank" rel="noopener noreferrer">Something Fishy: Toxic Plastic Pollution Is Traveling Up the Food Chain</a></p><p><a href="https://therevelator.org/plastic-pollution-ship-shore/" target="_blank" rel="noopener noreferrer">Plastic Pollution: From Ship to Shore</a></p><p><a href="https://therevelator.org/plastics-fracking-climate/" target="_blank" rel="noopener noreferrer">Plans to Turn America's Rust Belt Into a New Plastics Belt Are Bad News for the Climate</a></p><p><a href="https://therevelator.org/trash-galapagos-ecotourism/" target="_blank" rel="noopener noreferrer">Trash in the Galápagos Reveals the Dark Side of Ecotourism</a></p><p><a href="https://therevelator.org/elephant-seals-diving-garbage/" target="_blank" rel="noopener noreferrer">Elephant Seals: Diving Through Garbage</a></p><p><strong>Taking Action</strong></p><p><em><a href="https://therevelator.org/story-plastic-review/" target="_blank" rel="noopener noreferrer">The Story of Plastic: </a></em><a href="https://therevelator.org/story-plastic-review/" target="_blank" rel="noopener noreferrer">New Film Exposes the Source of Our Plastic Crisis</a></p><p><a href="https://therevelator.org/plastic-movie-stuff/" target="_blank" rel="noopener noreferrer">How to Win the Fight Against Plastic</a></p><p><a href="https://therevelator.org/cities-zero-waste/" target="_blank" rel="noopener noreferrer">Can Cities Go Zero-waste? One Japanese Town Tried</a></p><p><a href="https://therevelator.org/secret-value-trash/" target="_blank" rel="noopener noreferrer">The Secret Value of Trash</a></p><p><a href="https://therevelator.org/junk-raft-polluted-ocean/" target="_blank" rel="noopener noreferrer">Junk Raft: A Journey Through a Polluted Ocean</a></p><p><a href="https://therevelator.org/bioplastics-environment/" target="_blank" rel="noopener noreferrer">Are Bioplastics a Better Environmental Choice?</a></p><p><a href="https://therevelator.org/plastic-straws-problem-solution/" target="_blank" rel="noopener noreferrer">Plastic Pollution Is a Problem — These Kids Are Working for a Solution</a></p><p><a href="https://therevelator.org/thai-activists-fight-trash-taboo/" target="_blank" rel="noopener noreferrer">Thai Activists Fight Trash Taboo</a></p><p><em><a href="https://therevelator.org/author/taralohan/" target="_blank">Tara Lohan</a> is deputy editor of The Revelator and has worked for more than a decade as a digital editor and environmental journalist focused on the intersections of energy, water and climate. Her work has been published by The Nation, American Prospect, High Country News, Grist, Pacific Standard and others. She is the editor of two books on the global water crisis.</em></p><p><em>Reposted with permission from <a href="https://therevelator.org/plastic-pollution-archives/" target="_blank">The Revelator</a>. </em></p>
EcoWatch Daily Newsletter
Hundreds of endangered sea turtles were stranded on beaches after suffering "cold stunning" in the waters off Cape Cod, Mass. Local rescuers and wildlife rehabilitators stabilized the turtles at the New England Aquarium (NEAQ) and National Marine Life Center and began treatment. Many of the sea turtles were transported by land or air to partner facilities around the Eastern Seaboard for longer-term care to make room for more incoming, cold-stunned animals.
Rehabilitators at The Turtle Hospital in the Florida Keys assess critically endangered, cold-stunned Kemp's ridley sea turtles flown in after rescue in New England. The Turtle Hospital<p>NEAQ and local rescuers begin seeing turtles every fall when water temperatures drop to that 50 degrees F threshold, and typically expect to find them into early January. After that, <a href="https://www.ecowatch.com/sea-turtle-cape-cod-weather-2621527394.html" target="_self">temperatures are so cold that any animals found are usually no longer alive</a>.</p><p>Merigo estimated that this year's cold season "looks very busy" and noted that local rescue efforts had already surpassed 400 turtles.</p><p>"It is a lot of animals. They're still coming in," she told EcoWatch as she surveyed 39 rescued turtles that day and 20 the day prior. "So far, this is a huge year."</p><p>At NEAQ, the turtles are gradually warmed up about five to 10 degrees F a day. More aggressive warming can cause serious damage and the turtle might not survive, Merigo said. Emergency treatments also include providing replacement fluids, balancing electrolytes and addressing pneumonia. Assessments take place for other serious problems too, such as shell or limb fractures, frostbite, emaciation and eye damage.<span></span></p><p>As local aquariums don't have the capacity to care for all the injured turtles, a group of private pilots called <a href="https://www.turtlesflytoo.org/" target="_blank">"Turtles Fly Too"</a> donated planes, fuel and time to transport some to various partner facilities around the country. Other turtles were driven to closer care facilities.</p><p>"We have a huge network of really great partners working with us, so if we can spread out the care, we can give better care to all the animals," Merigo said.</p><p>The 40 Kemp's ridley sea turtles recovering in The Turtle Hospital will continue to be treated and rehabilitated anywhere from 30 days to a year, depending on the severity of injuries, Zirkelbach said.</p><p>The turtle expert noted that while she's treated cold-stunned turtles from the north before, the newest arrivals were the most cold-stunned Kemp's ridleys ever received at one time.</p>
After rescue, cold-stunned sea turtles received immediate emergency care and assessments at the New England Aquarium. Caitlin Cunningham / New England Aquarium<p>In the past decade, the Gulf of Maine, which spans from Cape Cod to Nova Scotia, has warmed 99 percent faster than the rest of the ocean, Zirkelbach said. The warm water encourages turtles that migrate north along the Gulf Stream in warmer months to stay in the bay longer.</p><p>"Turtles that fail to migrate south get stuck in the unique horseshoe-shaped topography of the Cape Cod peninsula, and when temperatures drop, the bay becomes a death trap," she added.</p><p>Before ocean temperatures warmed, the waters of Maine were too cold for many of these sea turtles, Merigo echoed. Now, with warming sea surface temperatures, Maine can reach the high 70s to low 80s, which is "perfect turtle temperature," she said. The potential for more turtles getting trapped in the bay and then cold-stunned is nerve-racking for Merigo.</p><p>In addition to shifting habitats as waters warm, warming global temperatures also disrupt natural gender balance in sea turtles, Merigo warned. Gender is determined by the temperature of eggs in nests, and as the planet warms, it will result in all females at some point, she said.</p><p>"The turtles we work with are all endangered and threatened," Merigo said. "For sea turtles in general, the future is a little grim. Climate change is real; it does impact them."</p>
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The Sheenjek River in the Arctic National Wildlife Refuge. Alexis Bonogofsky / USFWS
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