The Obama administration's war on coal claimed its most significant victim as Peabody Coal, the largest private coal company in the world, filed for bankruptcy today, citing several factors, including "ongoging regulatory challenges."

CNN Money:

"Peabody has a new management team, outstanding workforce, unmatched asset base and strong underlying operational performance that represent a key driver in the company's future success," CEO Glenn Kellow said in a statement announcing the Chapter 11 filing.

In addition to plummeting coal prices, the company cited weakness in China's economy, overproduction of domestic shale gas and ongoing regulatory challenges as reasons for its declining prospects.

Peabody reported a loss of $2 billion last year. Revenue tumbled 17% to $5.6 billion as the average price and amount of coal that it sold fell. It warned of further declines this year due to reduced use of coal by U.S. utilities, along with lower demand from overseas markets.

Shares of Peabody (BTU) have already plunged more than 75% this year to trade near $2. The company has roughly 7,600 employees.

The coal industry has faced a myriad of problems in recent years, including proposed regulation from the Obama administration to cut greenhouse gas emissions from the nation's coal-burning power plants. The industry refers to those regulations as Obama's "war on coal."

While the new regulations have been put on hold by the Supreme Court, the industry has faced a number of other economic woes, including significantly lower prices for natural gas, which is a competing fuel used by electric utilities, and slowing economic growth in China, a major market for U.S. coal.

Renewable sources of energy are also getting much cheaper, further squeezing demand.

Would Peabody be bankrupt if the government had kept its nose out of the energy business?  It's a seductive theory, but market forces appear to have played a larger role than government interference.

The fact is, natural gas, mostly obtained from hydraulic fracturing, is booming, and utility companies see the writing on the wall regarding the cost of coal going up as a result of the goverment's "war on carbon."  Even without the price increase, natural gas would still be the winner, given the oversupply for the foreseeable future. 

There is also the economic downturn in China that has cut into exports and competition from emerging countries who are aggressively going after market share using government subsidies of their coal industry to undercut U.S. prices.

In short, the carbon regs that will almost certainly be reinstated by the Supreme Court are not playing a decisive role in Peabody's troubles.  But they aren't helping, nor are other coal companies, who might be more vulnerable to the regulations, looking forward to complying.