• 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 gokeefe
I was somewhat on the fence about which railroad would see a greater effect but recalling to mind their port operations Norfolk Southern clearly has had a much greater focus on coal exports while CSX has invested a lot of time and effort on intermodal from steamship lines.

Norfolk Southern is no slouch when it comes to intermodal but until very recently coal was still a central part of their traffic strategy. CSX seems to be more diversified and therefore better positioned to handle the decline of coal.
  by rr503
On the other hand, I've heard that NS is slaughtering CSX in the customer service game, so I'm on the fence too. It'll be fascinating to watch EHH deal with this all.
  by Gilbert B Norman
I guess this event cannot be considered "railroad negative", but as the report notes, the present demand for industrial energy is being with domestic coal and natural gas - and the latter is being delivered to the consumer more economically in many a market:

https://www.nytimes.com/2017/03/28/clim ... hange.html" onclick="window.open(this.href);return false;

Fair Use:
.WASHINGTON — President Trump signed on Tuesday a much-anticipated executive order intended to roll back most of President Barack Obama’s climate-change legacy, celebrating the move as a way to promote energy independence and to restore thousands of lost coal industry jobs.

Flanked by coal miners at a ceremony at the Environmental Protection Agency, Mr. Trump signed a short document titled the “Energy Independence” executive order, directing the agency to start the legal process of withdrawing and rewriting the Clean Power Plan, the centerpiece of Mr. Obama’s policies to fight global warming.

The order also takes aim at a suite of narrower but significant Obama-era climate and environmental policies, including lifting a short-term ban on new coal mining on public lands.

The executive order does not address the United States’ participation in the 2015 Paris Agreement, the landmark accord that committed nearly every country to take steps to reduce climate-altering pollution. But experts note that if the Trump program is enacted, it will all but ensure that the United States cannot meet its clean air commitments under the accord.

Mr. Trump advertised the moves as a way to decrease the nation’s dependence on imported fuels and revive the flagging coal industry.
But energy economists say the order falls short of both of those goals — in part because the United States already largely relies on domestic sources for the coal and natural gas that fires most of the nation’s power plants.
All told, it appears to be a photo-op for a beleaguered president - and not much, if anything, more.
  by SemperFidelis
The number crunchers at Fivethirtyeight.com have put together thier thoughts, which are much more in line with reality than what politicians want people to think, on the subject of coal's future. Simple, basic, economics are what rule the day, not the silliness about President Obama's "War on Coal"...though, like most bad policies, the latter fits much better on a bumper sticker.

https://fivethirtyeight.com/features/tr ... s-decline/" onclick="window.open(this.href);return false;
  by JayBee
In spite of what the Federal Government wants, the states will have the biggest say over the future of coal-fired power plants. For example the State of Minnesota wants all such plants in the state to close by 2030. Sherco #1 and #2, the 2nd and 3rd largest units in Minnesota are scheduled to close in 2023 and 2026. They are to be be replaced primarily with wind and solar, along with a smaller Natural Gas powered plant.
  by David Benton
this may hasten the move away from coal.
https://www.nytimes.com/2017/04/15/clim ... -well&_r=0" onclick="window.open(this.href);return false;

On the other hand , rail could play a role in carting coal ash away for safer storage.
  by Jeff Smith
http://www.detroitnews.com/story/news/n ... 102278744/" onclick="window.open(this.href);return false;
Matoaka, W.Va. — The red caboose parked at the edge of a rundown commercial block is the only rail car some people have seen in Matoaka in more than a year.

It bears the markings of the Norfolk and Western Railway, a company merged years ago and absorbed into oblivion, like Amoco and Oldsmobile. It has come to rest here, a relic of the past.

As the coal industry has fallen on lean times, so too have the businesses that supplied the mines, equipped miners and hauled coal out of the West Virginia mountains — none more visible than the trains that once thundered around the clock along the shoulders of these hills.

Now, with a coal operator in the governor’s office and an outspoken advocate for coal in the White House, many are watching for signs of life from a business that once represented the living embodiment of an industry on the move. The major railroads here, Norfolk Southern and CSX, each formed from decades of mergers, have continued to post profits while shedding personnel, idling equipment and cutting overhead. And lately they’re expressing measured optimism about what lies ahead.
  by Gilbert B Norman
A glimmer of hope from metallurgical coal used in the production of steel - domestic or foreign notwithstanding:

https://www.wsj.com/articles/a-new-mine ... 1496145600" onclick="window.open(this.href);return false;

Fair Use:
..ACOSTA, Pa.—An 80-foot-deep pit being dug in the rolling farmland here is inspiring hope in a community where coal has been mined since the 1800s.

The new Acosta Deep Mine, which will begin producing coal in June from a 40-inch-thick seam, is one of the rare bright spots in an industry that otherwise remains in a downward spiral. In the past six years, hundreds of coal mines have shut nationwide, putting thousands of miners out of work. The main reason is that coal used by power plants has come under intense competition from cheap natural gas.

But the Acosta mine will produce metallurgical coal, a higher grade used to make steel that is only found in Appalachia in the U.S. After prices fell sharply for several years, demand for metallurgical coal has rebounded globally and much of it mined in the U.S. this year will be shipped to Europe, South America and Asia
Oh and anyone; name me the only reasonable and practical land mode on which coal can be shipped
  by David Benton
Certainly seems to be an upswing in steel worldwide.
However, Given the decision President Trump has reportedly made to exit the Paris Accord, trade embargoes on coal from the USA becomes a possibility in the future. Though that in turn could lead to more domestic steel production, thus more rail traffic.
  by David Benton
I do not wish to be as anti coal as I may appear. I am certainly against increasing the amount of coal burn't because it increases CO2 emissions. However , I do think a lot more research should be put into alternative uses for coal. While I haven't found many past uses of coal that could be used more effectively today, I think research into its use in the place of asphalt or tarseal could be effective. This would be an ideal traffic for the railroads.
  by YamaOfParadise
I mean, I I think the tl;dr on coal's future is "It's Complicated." The writing's been on the wall for a while now, use for energy is doomed, and it's especially doomed domestically given the market forces at work (let alone the whole CO2 thing). But, everything else is a big question mark, and it's unlikely that coal will dry up altogether given it has uses as a reagent instead of an energy source. It's just a question of how much, and particularly what types of coal are going to be used from that: not all coal is equal! It'll be interesting to see which railroads "luck out" based on having access to whatever mining regions that have the most desired coal composition.
  by gokeefe
Watch what's happenning in China. They are moving away from coal because of concerns about pollution. As their demand slows the coal commodity prices will crash. This will leave virtually all U.S. mines for thermal coal in the red. It has no future whatsoever at all. The implications for U.S. railroads remain negative and I still think NS appears to be the most vulnerable to this change.
  by MCL1981
The US only exports something like 8% of it's total coal production. And I understand most of that is metallurgical rather than energy production. I don't think any of it goes to China either. In the unlikely event China actually cuts back so they can pretend to care about the atmosphere, how would that effect the US?
  by gokeefe
China has been a primary export market for Powder River coal.

Here is a nice article from one point of view.
Fact #2: Exports from the Powder River Basin to Asia have been unprofitable since 2013.
Many folks seemed to believe that US coal companies can make money selling coal to Asia. But the truth is that most US coal exports to Asia stopped being profitable years ago.
  by eustis22
"pretend to care"???

Then why pay to subsidize the capture of the solar panel market? Seems an expensive pretense.
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