Bloomberg is reporting on the increase in coal company bankruptcies in recent years, due to the switch by power companies to natural gas and fracking, which has flooded the market with cheap gas.

Driving this conversion is the prospect of new, draconian rules to be issued by the EPA on emissions from coal plants.

Exports are failing to save U.S. miners. Slowing Chinese growth and rising competition from overseas, including increased Australian output, have sent the price of metallurgical coal, used in steelmaking, to a six-year low. Central Appalachian thermal coal, used in power plants to produce electricity, fell on the New York Mercantile Exchange by 4.6 percent in 2013 compared with 2012.

Coal plants capable of generating 60,000 megawatts, enough to power 48 million average U.S. homes, will shut by 2020 because of tighter pollution regulations, slow growth in power use, and competition from natural gas, according to the Energy Department. That’s about 20 percent of coal plants by capacity and about 6 percent of total power-generating capacity as of 2012.

It’s already begun: 3.2 percent of coal-fired capacity, enough for 8 million homes, disappeared in 2012. The balance of closings will occur by 2016, when new clean-air regulations take effect, the government said.

Power plant coal burning by 2020 must decline by 204 million tons, or 24 percent, to meet U.S. Environmental Protection Agency greenhouse gas targets announced June 2, Sanford C. Bernstein & Co. analysts led by Hugh Wynne estimated in a July 23 note to clients.

“The inefficient guys are getting pushed out of the market,” and there are “prospects for consolidation” of mining companies, said Andrew Cosgrove, an energy analyst for Bloomberg Intelligence.

“You’re not going to see them all disappear,” and company bankruptcies often occur for business reasons such as higher mining costs or economic competition, Cosgrove said in an interview.

David Hillman, a bankruptcy lawyer with Schulte Roth & Zabel LLP in New York, said in a June report that plans for 150 new coal plants have been canceled and profits from coal-fired electricity generators fell to $4 billion in 2011 from $20 billion in 2008.

That massive drop in profits will doom several dozen smaller companies that are already on the margins. But it appears likely that consolidation will take place and we'll end up with half a dozen very large companies.

Coal is used for more than just power generation, although the specific kind of coal used in power plants is what's mostly mined in the US. There is also coke, a by-product of coal used in steel production, as well as several applications for coal in the drug and chemical industries.

Coal will not disappear entirely, but there will be a considerable amount of downsizing and a loss of tens of thousands of jobs.