Peabody Energy—the world's largest private coal company—filed for bankruptcy this week.
The company cited a variety of factors, including lower-than-expected demand for coal, and increased production of cheap natural gas obtained through "fracking" in the U.S.
Peabody is also saddled with debt from its $5.2 billion of Australian company Macarthur Coal in 2011.
DON'T MISS: Big Coal Doomed: Not By Climate Rules But Fracking & Finance (Aug 2015)
That proved to be a particularly bad decision—predicated on the incorrect assumption that coal demand would continue to rise, despite stricter environmental regulations and competition from other energy sources—notes The Washington Post in an autopsy of Peabody.
Peabody specifically assumed Chinese demand for its coal would remain strong, which has not been the case.
China consumes more coal than any other country, but it is both in the midst of an economic slowdown and soon expected to enact environmental rules to limit carbon emissions.
Coal, by Flicker user oatsy40 (Used Under CC License)
For the time being, Peabody says its mines will remain open. Its Australian operations are not included in the Chapter 11 filing.
As of the close of stock-market trading on Tuesday, Peabody's capitalization was estimated at just $38 million.
The value of its shares has dropped more than 99 percent from their peak in 2008. Five years ago, the company was worth $20 billion.
MORE: What Future For Coal In The U.S.: Slow Decline Or Faster Retreat? (Apr 2015)
Peabody is the 50th coal company to file for bankruptcy since 2012, and likely the highest-profile of the bankruptcies.
The company was founded in the 1880s, and rose to become the largest of its kind amid the 1970s oil embargo.
There is some concern among environmental advocates that coal companies expect to use bankruptcy to shirk responsibility for cleaning up the sites of their mines.
Two BNSF locomotives hauling coal trains meet near Wichita Falls, Texas
A company statement said the bankruptcy "does not change Peabody's approach toward best practices in mining," including "high-quality land restoration."
The short-term decline of the U.S. coal industry is likely due to economic factors, particularly the natural-gas boom.
But governments worldwide are taking action against climate change, which may seal the fate of the already-weakened coal industry.
Spooked by recent coal bankruptcies, a group of investors recently demanded oil and gas companies—including Exxon and Chevron—disclose the financial risks posed by climate change, and climate change policies, reports Forbes.
Ontario Power Generation Nanticoke Generating Station coal power plant
Investors and companies who underestimate the sincerity of climate-change policies risk coal, oil, and gas reserves becoming stranded assets.
That means they will lose value long before the end of their anticipated useful lives.
Yet while it may create an existential crisis for coal companies, the combination of short-term economic factors and pending environmental regulation should be good news for electric-car drivers.
Because as electricity grids get cleaner, so do the cars that plug into them.
[hat tip: Brian Henderson]