For the first time in more than 30 years, the federal government has decided to hold off on authorizing new leases for coal mining on federal land. It will undertake a review to see whether taxpayers are getting a fair deal, while assessing the program’s environmental costs.
This welcome news is long overdue. Taxpayers have already lost out on $30 billion in revenue due to the undervaluation of coal mined from land belonging to the federal government. On top of that, Washington will soon be stuck monitoring and dealing with a growing number of abandoned coal mines.
This kind of obligation is becoming a bigger headache due to the string of bankruptcies rippling through the coal industry.
Arch Coal, the second-largest U.S. coal company, just filed for bankruptcy, joining 26 other companies since 2009. Energy experts tend to blame competition from cheaper natural gas and increasingly strict environmental regulations. But there are other factors at play.
Chief among them: These companies are suffocating under a mountain of debt.
How many credit cards can you juggle? How much of your home can you borrow against? Eventually, debt catches up with companies just as it will catch up with you.
