May 9, 2016

Analysts: Outlook For Coal Sector Is Negative

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A coal train heads west outside Hotchkiss, Colorado.

Theo Stroomer

A coal train heads west outside Hotchkiss, Colorado.

The outlook for the North American coal sector is negative. That’s according to a bleak industry report released by the credit ratings agency Moody’s, on Friday.

On a recent campaign stop in West Virginia, Donald Trump said he would put coal miners back to work. But Moody’s analysts report that the industry has gone through long-term structural changes with “little prospect for near-term recovery.” Three of the four largest producers in the country are in bankruptcy and year-to-date  coal production in the West is down 30% from this time last year. The coal industry is competing against low natural gas prices, and struggling with heavy debt loads, weak international demand, and environmental regulations here at home. Today, we get around 33% of our electricity from coal. Moody’s predicts that within a decade, that number could drop down into the mid-20’s.