Bill Koch, who made billions selling petcoke and coal with his company Oxbow Carbon, has become the latest in a long line of wealthy executives to turn his back on the coal industry. Executives at several major coal firms have recently jumped ship amid a stormy outlook for the industry.
Coal bosses are staring down the barrel at serious competition from cheaper and cleaner energy, along with growing concerns about industry impacts on public health and the environment. ‘The coal business in the United States has kind of died,’ said Bill Koch recently, ‘so we’re out of the coal business now.’
Bill Koch is the younger brother of notorious oil billionaires Charles and David Koch, who have played a major role in funding climate denial and right wing extremist groups in order to defend their fossil fuel assets.
Like his older siblings he also used personal wealth to try and shield fossil fuel assets from competition as well as health, labour, and environmental safeguards. This has included funding attacks on the Cape Wind project to try and insulate the coal business from the growth in clean, renewable energy – to no avail.
By cutting his personal ties with the coal business, it seems that Bill Koch’s efforts to insulate the coal industry from the real world have failed. Now more and more executives are taking evasive action to protect themselves, as coal power rapidly loses its position as a trusted energy source in developed countries.
In 2012, Arch Coal Inc.’s Steven Leer, the company’s CEO since its formation in 1997, announced plans to retire. While Richard Whiting exited as Patriot Coal Corp.’s president and CEO just before the company filed for bankruptcy protection in 2012.
In July 2013, metallurgical coal and iron ore producer Cliffs Natural Resources Inc. said President and CEO Joseph Carrabba informed the company’s board of his plans to retire. He had served as president and CEO of the company since September 2006.
In August 2013, coal and gas producer Rhino Resource Partners LP announced that CEO and President David Zatezalo was retiring as CEO.
This wave of retirement is not confined to the US coal industry. BHP Billiton announced the exit of CEO Marius Kloppers in February 2013. Tom Albanese stepped down as Rio Tinto‘s CEO in early 2013 following the company’s $14 billion write-down on investments.
Some coal companies are desperately trying to slow this executive class exodus. Alpha Natural Resources, the third largest US coal mining company, recently offered its top executives $2 million retention bonuses – even though the company’s stock has lost 92% of its value over the last three years.
Alpha Natural Resources are not alone. Across the board, many major publicly traded coal companies are plummeting in value. Peabody’s stock has fallen by 75% since early 2011 for example, while Arch Coal has fallen 88%.
The industry is attempting fight the decline by trying to weaken or block clean air rules that would reduce carbon pollution from power plants. They are also working hard to expand sales to markets in many developing countries.
But Bill Koch’s walkout and the wave of executives heading for the exit suggest that this strategy isn’t likely to rescue the industry.