The Flinchum File

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A Black Problem

From my perch overlooking the Chesapeake Bay, where it drains into the Atlantic Ocean, where the first English colonists landed in 1607, and where numerous naval battles occurred during the Revolution and the War of 1812, I have seen all manner of naval vessels, from aircraft carriers to submarines, as they glide silently past our beach.

Today, the most common ships passing offshore are container ships.  But, just a few short years ago, it was coal freighters.  The worldwide demand for coal was so strong that coal freighters had to wait in line for days — to get a place in the harbor where they could take on coal.  The demand for coal was greater than our ability to deliver the coal, most of which arrived by train from West Virginia.  I recall one Sunday afternoon counting 22 coal freighters waiting to take on coal.  Today, I see zero!

Since 2011, twenty thousand jobs have been lost in the coal business.  The combined market value of all coal companies is down a whopping 94% in those five years.  Indeed, for the first quarter of this year, coal has fallen 38% since the same period last year.

So, it is not surprising when huge companies like Peabody take bankruptcy.  Peabody was the largest coal company in the United States.  One could just shrug their shoulders and assume that is just the price of capitalism, but there is one problem — who is going to pay for cleaning up the pollution left behind?  Some states wisely required cash bonds to clean up the pollution before the polluting could begin.  Some states unwisely did not.  Nobody knows if the cash bonds will be sufficient to clean up the mess.  The environment desperately needs to be protected by the bankruptcy courts, which is one strange state of affairs.  Only the bankruptcy court can require creditors to wait before being repaid, until the pollution is cleaned up, but how long will that take and how will that be measured.

What a mess – both environmentally and legally!

POST NOTE:  I have learned there is a new regulation, requiring coal freighters to moor somewhere else, far away from Navy sea lanes for national security reasons.  That is the reason I see none from my perch.  Nonetheless, the market value of coal companies has still dropped 94% for a reason, and there is still a risk to the environment if the coal companies disappear.