"No man can become rich without himself enriching others"
Andrew Carnegie

Tuesday, July 10, 2012

How Did It All Go So Wrong For Patriot Coal?

Patriot Coal Corporation
Patriot Coal Corporation (Photo credit: Wikipedia)
By Stephen Simpson: I imagine a few investors are feeling pretty confused now, with news that Patriot Coal (PCX) has declared bankruptcy. So how is it that a company whose assets ought to hold hundreds of millions of dollars worth of net value is going the route of bankruptcy?
It is a pretty safe bet that we'll all hear from the anti-Obama contingent before long, and not without some reason. Notions like "Obama is trying to kill private enterprise" is garbage better suited to talk radio, but the fact remains that the Obama administration has made it meaningfully more difficult to be in the coal business. Whether it's OSHA regulations that cover underground mine operators like Patriot, Arch Coal (ACI), or Alpha Natural Resources (ANR), or EPA regulations that make it more expensive to burn coal for electricity generation, it's not easy to be in the Appalachian coal business (and not all that much better to be in Powder River Basin).
Gas On
More significant, at least in my view, has been the compelling price advantage of natural gas. Widespread shale gas exploitation, coupled with pipeline build-outs, relatively more favorable environmental rules, and much better gas-powered turbines from the likes of General Electric  ... Continue to read.
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