As Mr. O'Keefe notes at another topic:
gokeefe wrote:I think the greatest adverse impact remains on railroads with major coal interests, particularly thermal grades for power.
Although UP and BNSF both have a lot of coal business their primary product is low sulfur Powder River Basin coal. The low sulfur content makes Powder River coal highly competitive for export especially as emissions standards continue to tighten in Asia.
Dakota Access will also indirectly support a continued domestic surplus of natural gas, leaving coal as an economically inefficient heat source for power generation for decades to come.
The simultaneous collapse of bituminous Appalachian coal exports and eastern coal fired power generation has fundamentally negative implications for one railroad in particular: Norfolk Southern.
Coal exports from Lambert's Point are one of the single largest sources of traffic for the railroad alongside coal supply to power plants throughout the Southeast, Midwest and Northeast. Although CSX is likewise affected their lesser exposure to coal exports and stronger intermodal traffic make them better positioned to survive the continued decline of coal.
Of great interest to me is his observation that the Powder River WY coalfields served by both BNSF and UP (predecessors: BN and C&NW) is "cleaner" by grace of its lower Sulphur content. Even if the lines as laid out favor a line haul to the East, there remains a substantial line haul to the West "where the action is" for exports to Asian markets such as China. The Chinese may "talk the talk" regarding phaseout of coal, they have a long way to go before anyone can give them credit for a "walk the walk".
But no question whatever, even if resistance to environmental conditions will be less with the incumbent Administration than it was with the previous, that natural gas can be delivered at less cost at its consumption sources than can coal obviates my argument set forth at several topics about the site of "America has more coal than the Arabs have oil - let's dig it", the fact remains that the transport of natural gas is not done by railroads.
Finally, I'm surprised to learn, but do not disagree, that Mr. O'Keefe holds Norfolk Southern will be greater affected by loss of coal traffic than will CSX. Both roads within my memory originated their existing systems from bituminous coal traffic where the loads literally "rolled on down to the sea" (controlled of course), but possibly they foresaw this "gravy train" would not be forever, so they both acquired East-West roads, followed by Southeast. Of course their splitting up of Conrail - a perfectly viable East-West road was the "capstone" to forming their existing systems - and fifteen years later remains an enigma as to the wisdom of such.
disclaimer: author holds long position UNP