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Class I railroads attribute workforce reductions to decrease in coal shipments
Story fails to state the impact of the administration’s war on coal.
The ‘big picture’ reality of the current state of electric generation is that when the price of natural gas rises, and after 20 years of utility life let me assure you it does go up eventually, the demand for coal will still be lower than its peak due to lower number of coal plants resulting from retirement. The railroads know this and plan accordingly.
Having spent 3 days recently in southwest Virginia around Natural Tunnel State Park, the decline in coal traffic is severe. This not only effects the railroads but the local people who’s only job opportunities are to work in the mines. BUT I do have a problem with the extraction methods of mountaintop removal. To see it “live and in concert” so to speak is heart wrenching and disturbing. I.m sad to see the effects on local people’s livelihood but for out of state corporation’s to alter and forever destroy Appalachia is a crime that should not happen.
Mr. Norton:
Actually the decline in coal has more to due with market conditions. Not the so-called “war on coal” as some people are wont to believe. Tough competition from cheap natural gas and even other coal basins makes matters worse and production is headed down regardless of air or water pollution restrictions.
If the administration was really waging a war on coal and Congress levied a carbon tax worth $30 per ton by 2020, then U.S. utilities would probably shutdown about half of the coal fired power plants by 2016. Alternatively, the EPA could come out with rules for regulating carbon-dioxide from existing power plants as well as fly ash.
Yes the coal industry is hurting. But cheap natural gas is dealing much of the pain
Thermal coal is in a secular decline due primarily to the vast increase in the production of lower-cost natural gas. Simple market forces are causing a migration of power producers from coal to gas. Not a good thing for Coal Country and the railroads, but a long-term positive for the nation as a whole.
On top of that, there is growing evidence that the greatly-expanded export of thermal coal to Asia, long thought to be the one thing that would save the U.S. domestic thermal coal industry, will never come to pass, for two reasons: First, China has finally recognized that it has an extremely serious air pollution problem and has actually reduced coal consumption in absolute terms since 2013. Indeed, China has reportedly now adopted a transformational “anything but coal” energy policy (India is expected to do the same). Importation of US thermal coal into China has already declined, and further declines are likely as China moves to protect domestic producers as coal consumption is progressively reduced.
The second reason is that export of vastly greater amounts of thermal coal to Asia would require new coal ports in Oregon, Washington and/or British Columbia, and there is sufficient west coast opposition to such ports so as to effectively preclude their construction.
As to the existing and new environmental regs, they may speed up the inevitable eventual demise of the thermal coal industry, but they are hardly the root cause of that demise. My recommendation to railfans is to get to the Powder River Basin sooner rather than later; I was there last week and there are already fewer trains than a couple years ago.
Even crude oil by rail has fallen off as drillers are caping wells waiting for price increases.