As the headlines earlier this week told you, the US coal industry scored a win at the Supreme Court. With a 5-4 majority it ruled that the Environmental Protection Agency had to consider compliance costs when it issues emissions rules for power plants. The court sent the Mercury and Air Toxics Standards (Mats) back to the agency to justify its net economic benefits.

Whatever short-term cheer this brought to the coal-mining companies, it has come too late to save most of the industry from looming financial disaster. Coal company shares and bonds bounced up for a day and then fell back into depression.

Most US coal capacity, more than 500m tons of annual production, is owned by companies in financial distress. The unsecured bonds of Arch Coal, behind which are more than 130m tons of capacity, are selling for 14 to 17 cents on the dollar. Peabody Coal (about 200m tons of capacity) has a bond maturing in 2018 that is priced at 48 cents on the dollar.

Even after the oil and gas price plunge, many oil and gas exploration and production companies with big reserves and negative cash flows have been able to raise new equity and refinance debt. The coal trade, on the other hand, is attracting little investor interest.

It is not that coal-fired power is going away any time soon, despite the best efforts of environmental activists, the career staff of the EPA and their supporters in the Obama administration. Even in the next decade, coal-fired power will provide more than a third of US power. Those utilities and merchant power plants will be buying their coal from new mine owners, though. Their predecessors will have gone broke.

The coal-mining industry’s death march will have been driven by two forces that have nothing to do with environmental activism: the lowering of natural gas prices and the deflation of the China steel production bubble.

The gas exploration and production industry in the US has made extraordinary technical and managerial advances in lowering the direct costs of developing what had been high-cost resources of shale and tight sands. It did that with cheap capital that plugged the holes in its balance sheets because it had a great story: big and constantly increasing natural assets.

The coal industry, on the other hand, already had the reserves. The growth story coal miners had in recent years was the unending demand by China for more and more coal for power plants and steel mills. The big US producers believed in the China dream, and many borrowed big to buy more metallurgical coal capacity to feed the dragon.

The dragon, though, had new ideas for more economic growth, and importing ever more coal was not among them. So the US producers had yet more surplus coal, larger piles of debt and even more daunting price and cash flow problem than before.

In the end, even the most efficient US mines need $3 per million metric British thermal units to survive and the least efficient more than $4.50 or $5/mmbtu.

Those are the financial realities. Still, the coal people seethe at the thought of wispy-bearded environmental activists around Washington. And the enviro/EPA alliance was quite successful in its development of anti-coal regulations based on the Clean Air Act of 1970. As one coal utility lawyer says, “Even if the Mats rule is vacated [overturned], which is a very low probability, it has done its damage. The utility industry has already made plans.”

There is, though, one more Lord of the Rings-scale battle to come: the courtroom and legislative fight over the Obama administration’s Clean Power Plan. Those regulations are due to be published in August, and the EPA has estimated they will lead to the shutdown of another 49,000 megawatt of coal-fired power.

Even with the coal miners’ financial distress, there will be enough money to litigate and conduct public campaigns against the plan for years to come. On the other side, there are formidable opponents, including not just the EPA, but litigators at organisations such as the Natural Resources Defense Council.

David Doniger, director and senior attorney for the NRDC’s climate and clean air programme, believes the EPA’s setback on the Mats rule is just temporary, and that the Clean Power Plan will not be affected by the precedent. What does worry him is the possibility of a Republican president, House and Senate. “If the next president is a climate denier or at least climate action denier, and Congress stays Republican, they could withdraw the [Clean Power Plan].”

His opponents tend to agree with him on the significance of which party wins the White House. They will use litigation to delay or prevent the Clean Power Plan from going into effect. That could be considered a holding action while waiting for a Republican president.

Hundreds of millions of tons of coal and 49,000MW represents a lot of money. You can expect the coal industry’s receivers to fight for that.