The bankruptcy wave hitting U.S. fossil fuel companies is evoking comparisons with the dot-com burst more than a decade ago, as the number of oil companies filing for creditor protection hit 59 this week, Reuters reports—a number that's "closing in on the staggering 68 filings seen during the depths of the telecom bust of 2002 and 2003."
As the filings pile up, experts say the industry collapse has not even hit its midway point. Charles Gibbs, a restructuring partner at the Texas-based firm Akin Gump, told Reuters reporters Ernest Scheyder and Terry Wade that he expects to see more bankruptcies in the second fiscal quarter of the year.
And while neither of those crises hit the same levels as the housing or economic collapse that began in 2007, losses for energy investors "are significant," they report. "It remains unclear how long it will take to get through the worst of the declines, and who will be left standing when it is over."
On Monday, oil companies Ultra Petroleum and Midstates Petroleum also filed for bankruptcy. As the Wall Street Journal wrote at the time:
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Both companies, in court filings, pointed to persistently low commodity prices as the reason for their financial woes. Natural gas prices have been depressed for years and prices for crude have undergone a similarly steep decline, according to Nelson M. Haight, Midstates’ financial chief.
The news offers an optimistic glimpse of a fossil-free future—and serves as a warning that no dirty energy corporation is safe—coming just a few weeks after coal giant Peabody filed for Chapter 11 bankruptcy.
Meanwhile, this week saw the launch of a global wave of action against fossil fuels that will last for 12 days across six continents under the banner Break Free.
"The only way to survive climate change is through a rapid just transition to 100% renewable energy, keeping oil, coal and gas in the ground," Jennifer Morgan, executive director of Greenpeace International, said on Wednesday.