• Effect of Coal and Competition on Railroading Industry

  • For topics on Class I and II passenger and freight operations more general in nature and not specifically related to a specific railroad with its own forum.
For topics on Class I and II passenger and freight operations more general in nature and not specifically related to a specific railroad with its own forum.

Moderator: Jeff Smith

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  by Gilbert B Norman
 
eustis22 wrote:....in Michigan, a new coal plant costs $133 per megawatt hour. A natural gas plant costs half that. Even wind contracts cost about $74.52 per megawatt hour. "I don't know anybody in the country who would build another coal plant,"

As dead as the steam locomotives.
Mr. Eustis, whenever I see the Daily train by here with DEEX hoppers, your report, as I captioned, represents ominous news.
  by gokeefe
 
eustis22 wrote:As dead as the steam locomotives.
Perhaps one of the best lines of this entire thread.
  by David Benton
 
It would seem to me, if they want to create jobs in this region, the logical industry would be biomass from forestry. That has a carbon neutral future, and would be suited to rail haulage.
  by gokeefe
 
There are a lot of people in Maine who would like to think this could be true.
  by David Benton
 
The removal of the climate change page form the White house website is a bad sign.
Hopefully pure economics will maintain the shift to natural gas , and to wind power.
Anyone know the K.w.h cost of a biomass plant in the USA?
  by gokeefe
 
No idea but I have no hope whatsoever for biomass right now. Natural gas is so cheap that the U.S. is exporting it via LNG terminals with no appreciable effect on domestic pricing.
  by JayBee
 
The US is exporting Biomass to the UK in significant quantities.

Mega Shippers: Freight of Fire (S1 E7) features a cargo of 55,000 tons of Biomass from the Port of Baton Rouge in Louisiana to a port in England (IIRC Immingham) with final delivery by rail to Drax Power Station in Yorkshire.

Video for sale on YouTube here https://youtu.be/NGQUNWVI9gY?list=ELzwg ... 8y7ThYM4UA" onclick="window.open(this.href);return false;

The biomass comes from Drax Biomass in Louisiana and Mississippi. http://www.draxbiomass.com/" onclick="window.open(this.href);return false;

John Beaulieu
  by David Benton
 
Thanks Jaybee, I'm pretty sure thats the operation i saw the article in Trains magazine on.
Our largest Milk processor is under public pressure to use wood pellets instead of coal here. I am hoping public opinion will fill the void left by a lack of govt policy in all our countries.
  by Gilbert B Norman
 
From Holiday Inn Express Boca Raton--

While I recognize that my pro-industry position taken at the oil top was criticized by a member, I still have to consider that I spent eleven years of my working life within, and that, even though I have pared my positions, I remain a railroad security investor.

I have to say that I am heartened that the Trump administration is rolling back some Obama regulations impairing coal production. As I'very noted before, "America has more coal than the Arabs have oil - let's dig it" - and move it by rail!

http://nytimes.com/2017/02/02/business/ ... tions.html" onclick="window.open(this.href);return false;

disclaimer: author holds long position UNP
  by David Benton
 
Mr Norman,
Coal traffic did rise last month. Mr Frailey referred to it as a "dead cat bounce" in his Trains magazine blog.
While simple market forces seem to be having more effect than any regulations, Obama's laws may have influenced decisions to close coal fired power stations.
I hope the USA doesn't become the bad boy of the world in this regard. Its influence is mighty, However China is rubbing its hands in glee at Trumps actions alienating the rest of the world. I am sure the Paris accord will go ahead , with or without the USA.
  by gokeefe
 
My impression is that cheap natural gas is doing more damage than anything else.
  by AgentSkelly
 
gokeefe wrote:My impression is that cheap natural gas is doing more damage than anything else.
Thats my understanding too...and those coal plants can be EASILY converted to natural gas operation.
  by SemperFidelis
 
I worked in frac sand for a while and anyone in the natural gas field will give you pretty much the same answer: The "War on Coal" is largely an idea more based in politics than economics. Even had the former President not declared war on coal, cheap, relatively shallow, thick views of natural gas would have displaced most of coal's generating capacity.

Natural gas requires a decent amount of up front cost but once the well is complete there is barely any cost in terms of labor whereas coal needs miners and equipment every single day for as long as you want to use coal.

Anyone who says the majority of the fault lies with the former President either hasn't read up on the subject and has a bad perception of the issue or they have read up on the subject and care more about political points than facts (something both sides are more than guilty of).
  by David Benton
 
An article regarding "clean" coal stations, in Australia.
One can see the dilemma, It would be a brave person to bet they will still be burning coal in 30 years time. I don't know how much natural gas Australia has. Meanwhile, temperatures are breaking records all over the East Coast.
http://www.nzherald.co.nz/business/news ... d=11799330" onclick="window.open(this.href);return false;

Meanwhile, I have a feeling this issue is going to "tidal wave" a shift in thinking, a lot sooner than the 20 - 30 year time spans many are thinking of. http://www.nzherald.co.nz/world/news/ar ... d=11799290" onclick="window.open(this.href);return false;
Note they are talking metres, 50 metres(meters) is around 150 feet.
  by Gilbert B Norman
 
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
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