America's natural gas boom has claimed its biggest victim so far with Patriot Coal -- one of the country's biggest miners of thermal and coking coal -- collapsing with assets of $US3.5 billion. St. Louis-based Patriot filed for Chapter 11 bankruptcy reorganisation on Monday, US time. The collapse shows the pressures building in the huge US coal industry from changes being wrought by the shale gas boom.
That makes Patriot the largest casualty thus far of the slump in US coal demand to a 24-year low which has seen coal's share of US electricity generation to just over 34%, (it was around 49% a year ago). That's almost as much as produced by gas, which is up sharply thanks to the surge in shale gas production and the collapse in prices. In fact, the US Energy Information Agency reported late last month that US coal use in the first quarter was the lowest for any quarter since 1988 as power utilities have switched more and more of their plants to cheaper natural gas as regulations restricting emissions make coal costlier to burn. Gas prices fell to a decade low in April amid a surplus of the fuel.