Today in New West news: Arch Coal files for bankruptcy, Bozeman climber Conrad Anker waits with bated breath for Oscar news, and Denver’s proposal to shelter homeless in the city.
Arch Coal, the second largest coal company in the United States, filed for bankruptcy Monday, according to the Casper Star Tribune, a move that has Wyoming worried. Indeed, Arch runs the Black Thunder mine near Wright, WY, which is the second-largest in the United States and employs approximately 1,600 people. Arch also contributes heavily in state taxes, paying $1.1 billion to Wyoming in 2014. The Tribune also notes Arch has $458 million in unsecured reclamation liabilities through the state. From the Tribune:
Arch executives characterized the move as necessary to restructure the company’s more than $5 billion debt. Mining operations will continue as the company navigates Chapter 11 proceedings, the St. Louis-based firm said.
“After carefully evaluating our options, we determined that implementing these agreements through a court-supervised process represents the best way to solidify our financial position and strengthen our balance sheet,” said John W. Eaves, Arch’s chairman and CEO, in a statement. “We are confident that this comprehensive financial restructuring will further enhance Arch’s position as a large-scale, low-cost operator.”
The development underscored the depths of the downturn now enveloping the coal industry. On Friday, the U.S. Energy Information Administration reported American coal production had slumped to its lowest level since 1986. U.S. coal consumption, meanwhile, fell to levels not recorded since 1988.
Arch executives noted the deteriorating market conditions in their court filings. Coal fell from 48 percent of U.S. power generation in 2008 to 38 percent in 2014, as cheap natural gas became increasingly attractive to utilities, they said.
Power companies retired 13 gigawatts of coal-fired power in 2015. An additional 23 percent of existing coal capacity is anticipated to be retired or converted to natural gas in the next decade as utilities move to meet new environmental regulations, the company said.
Arch staked a large bet on metallurgical coal used in steel production in 2011 when it paid $3.4 billion for the International Coal Group. But a supply glut and waning demand from China combined to drive down prices. Metallurgical coal prices are now at their lowest levels since 2004, Arch said.
Governor Matt Mead took the filing as an occasion to lambaste federal regulators for “harming the economy” directly and indirectly. Environmental groups such as WildEarth Guardians, meanwhile, cite Arch’s filing as an indicator that coal is coming to end. Others, such as Bob LeResche from Sheridan-based Powder River Basin Resource Council, say Arch is dodging their reclamation duties by filing for bankruptcy.
Up in Montana, Bozeman fixture and renowned climber Conrad Anker is anxiously waiting to see if his documentary Meru will be nominated for an Academy Award. According to the Bozeman Daily Chronicle, Meru (a film about Anker, along with climbers Jimmy Chin and Renan Ozturk, attempting to scale India’s 21,350-foot Mount Meru) has already cleared one hurdle in the Oscar process:
At its premier, “Meru” received the Sundance Film Festival’s Audience Award. It was also praised by the New York Times’ critics. But the film has competition. Fourteen other documentaries (out of 124 submissions), including films on British musician Amy Winehouse and Pakistani activist Malala Yousafzai, were also on the short list released last month.
Only five will advance to the Feb. 28 ceremony in Hollywood.
Regardless, Anker is pleased with what the team has accomplished.
“For once there’s a legitimate climbing film that breaks out of what I call the Ernie’s telemark shop mold,” Anker said in reference to past product promotional videos. “You look at what films have been created for the general population and it’s films like ‘Everest,’ which is the fictionalized account of ’96. It’s based on the actual story but there are a few exaggerations in there, and there’s ‘Cliffhanger,’ which is Sylvester Stallone, and ‘Vertical Limit.’”
Finally, over in Denver, a new “social impact bond” contract (valued at $8.7 million) between private investors would aim to house and rehabilitate approximately 250 chronically homeless individuals, according to the Denver Post. Indeed, if successful, the city could earn $11.7 million back—it also stands to loose if the project is unsuccessful. The bond would depend, ultimately, on how successful it is keeping people off the streets and ensuring they don’t end up in jail, detox, the emergency room, etc. The City Council is expected to vote on the deal January 25, although some details (including who the investors are) have not come to light yet. From the Post:
The housing partners, the Colorado Coalition for the Homeless and the Mental Health Center of Denver, would provide the bulk of the supportive housing, with the first 20 or more people moving into a new CCH property in northeast Denver in coming months.
City officials say they hope to see at least a 40 percent reduction in days spent in jail among participants, compared with the jail stays of similar identified homeless people who are not in the program.
The city would pay more in “interest” or bonuses to the investors if the reduction is higher, up to 65 percent, or less if the reduction is lower. But the maximum $3 million in bonuses is seen as unlikely.
And if the project is a bust? Investors would receive a minimum of $2.6 million back if too many participants revert to the streets, spend too many nights in jail or get kicked out of the program.
In an average year, the city says, the top 250 “high utilizers” of city and county services spend roughly 14,000 days in jail, make 2,200 visits to a detox facility, get arrested 1,500 times and visit emergency rooms 500 times. The taxpayer tab for all that is more than $7 million.
Program developer Tyler Jaeckel told the Post the program’s uniqueness has several research groups interested, as “it’s pretty much the longest study of supportive housing to be developed … In this unique format, it’s probably going to produce more evidence than what we’ve seen.”