Coal bankruptcies continue to put a strain on communities

By Macey Sheppard

Though the coal industry has been in decline for over a decade, the industry continues to have an outsized impact in coal-bearing regions around the country. The communities within Appalachia value their region’s culture — including a long history of coal mining — and they also value the environment and beauty that the mountains provide. But the mining industry has put a severe financial and environmental burden on the people of Appalachia and their home.

According to research by ProPublica, 63 coal company bankruptcies occurred between 2012 and 2022. The cases involve 1,100 corporate entities. A big wave of bankruptcies occurred between 2013 and 2016 largely because coal companies could not compete against the low prices of natural gas. Bankruptcies have continued to occur for multiple reasons — competition from cheap natural gas, betting big on foreign demand for metallurgical coal and the continued rise of renewable energy sources.

“This is a story about how big coal companies avoid their responsibility to clean up their old mines,” said Josh Saul, a reporter, who describes how coal companies use bankruptcy to shed various forms of liability in the Bloomberg video “Why Coal Companies Love Bankruptcy.”

It is far too easy for coal companies to use bankruptcy to effectively hit a reset button. Once they file for bankruptcy, damages they caused and obligations they committed to are often no longer their responsibility. Unreclaimed mines can have severe environmental impacts, and the people most directly affected by coal companies’ shady business practices are the mostly working class and lower-income people of the surrounding communities.

This video was produced about a year ago, and very little has changed since then. Many permits remain idled, and permits that have gone through bankruptcy are particularly problematic.

Perhaps no story of bankruptcy and mine transfers is as strange as the one involving Tom Clarke. At various times, Clarke portrayed himself as a mogul, an entrepreneur, a millionaire, a visionary and a businessman. Tom Clarke is a so-called environmentalist who made a terrible gamble when he decided to invest in over 100 Appalachian mines during the bankruptcy of Patriot Coal. Prior to owning these mines, Clarke had no prior experience in the industry. Check out Bloomberg’s video “The Green Dreamer Who Became Big Coal’s Fall Guy” for the complete story.

Although Clarke is an interesting character, his story is not that unique. This cycle of repeated bankruptcy and mine permit transfer is a frequent occurrence. This is in part due to the lack of consequences companies and investors face when they file for bankruptcy. Too often, under-resourced companies take on mining permits without a clear plan for financing reclamation. Regulators often claim there is little they can do to stop these transfers. In the end the money always seems to run out, the mines are rarely reclaimed, hardly anyone is held responsible and the people of Appalachia are left to deal with the consequences.

Macey Sheppard is located in Wise, Va., and is the Coal Impacts Team Assistant for Spring 2024. She has a bachelor’s degree in Political Science Legal Studies from Virginia Tech and is currently pursuing her Master’s Degree in Higher Education from Liberty University.

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