U.S. coal sector faces few bright industry bright spots as green policies and a strengthening U.S. dollar close off options, Fitch Ratings finds. File photo by Debbie Hill/UPI | License Photo
NEW YORK, Nov. 10 (UPI) -- The coal industry in the United States faces more prospects of decline because of strains on export options and green agendas, Fitch Ratings finds.
Fitch said there's been a "wave of bankruptcies" in the United States, with at least three major producers announcing major defaults this year.
New York City is leading a national trend in divestments from coal, with pension fund managers called on to move away from the resource. In September, Notre Dame University said it will stop relying on coal for electricity within five years and cut its carbon footprint by more than half before the end of the next decade
Expansions in the coal industry outside the United States means export options for the U.S. coal industry are dwindling, and an increase in the value of the U.S. dollar makes U.S. goods more expensive.
Fitch in a research note said hopes for recovery in the U.S. coal industry have been dashed.
"The prospect of further reduction in coal burn to reduce carbon emissions is firmly on the table, and U.S. coal producers are undergoing a painful right sizing," its report said.
A federal Clean Power Plan set a goal of cutting emissions of carbon dioxide, a potent greenhouse gas, by 32 percent of their 2005 baseline by 2030, 9 percent more than in the original proposal. States need to meet specific emission reductions based on state-by-state energy consumption criteria.
Short-term, Fitch said coal consumption in the United States should be relatively flat ahead of the full enforcement of the federal power plan.