Posted on 07/31/2017 3:31:32 AM PDT by buckalfa
Coal has been the driving force behind the U.S. rail system for more than a century. The stories of locomotives chugging along as workers fed shovels full of coal into the burners may be a thing of the past, but that chunky byproduct has still been largely responsible for keeping the American rail system afloat. According to the American Association of Railroads, coal amounted to almost a third of gross tonnage carried by U.S. rail in 2016. It also amounted to more than 13 percent of rail revenue. And while that may not sound like a large percentage, 70 percent of the coal used by energy companies that year arrived by rail.
Understandably, the shrinking demand for coal in energy production has translated to less revenue for rail companies as well. By 2015, the U.S. Energy Information Administration reported, coal consumption had dropped 29 percent, down almost a third since its peak in 2007.
That continuing decline is not only impacting revenues for rail companies like BNSF Rail and Union Pacific, but it is forcing companies to rethink how Americas oldest automated form of transport can keep running.
Last week CSX Rails CEO made an announcement that put this shift into stark relief: Fossil fuels are dead, said Hunter Harrison, who has been charged with the difficult task of increasing the efficiency of the countrys third-largest rail system. Harrison, who has built his reputation on revitalizing both U.S. and Canadian rail companies, is driven by what he calls precision railroading, in which trains run on a system managed by a centralized hub, rather than by the rail yard. It also means a lot less leeway for expenditures that simply dont make sense like buying rail cars that fit a niche, declining, market.
His declaration that hell stop buying coal cars because coal is not a long-term issue may have been shocking to investors, but Harrison isnt alone in his opinion.
[As] coal usage in the U.S. power sector declines, so will the number of trains needed to transport it, explains Tali Trigg in her Scientific American blog post. [Thats] a lot of trains, often going back empty once the coal has been delivered.
Stranded asset risk will trump rhetoric when it comes to ploughing money into U.S. coal extraction write Bloomberg new energy experts. They point out that the UK, whose energy industry, like that of the U.S. was forged on the mining and sale of coal now represents a measly 4 percent of energy production in the British Isles. Thats remarkable, given the industrys iron-clad grip on the UKs economy as late as the 1980s and 90s. But across the world, in countries that have relied upon fossil fuel extraction and mining, a new attitude about what can drive rail is taking shape. Even when it comes to transportation in the countrys biggest commercial center, where Harraison first made his prediction last year.
Fossil fuels are probably dead, Harrison told listeners at a J.P. Morgan Transportation Conference in New York in March 2016.
Im not maybe as green as I should be, but I happen to think the climate is changing [and] theyre not going to fool me anymore,
Thanks for the information. I suspect I’ll be googling to learn more...
This kind of thinking destroyed American industry in the 1980s, particularly with the leveraged buyout frenzy. It's short term thinking, something that is "unthinkable" to our adversaries like the Chicoms.
Mr. Harrison's thinking is what hollowed out America's heartland. Already this year there have been a number of inexplicable layoffs of CSX workers, even though business is thriving. Every single day, seven days a week, I see long, long fully laden coal trains, more than I've seen in several years. Business is good.
Well, I'm sure Norfolk Southern would be happy to take the "burden" of hauling coal away from CSX. Then Mr. Harrison can task his trains to servicing his first love: hauling containers full of Chinese trinkets into the heart of America.
People who want to just make use of the most efficient energy sources lose the argument the moment they call it fossil fuel. This fuel is likely not made from fossilized life but from reactions of elements within the planet. It was some French dude who originally described oil as originating from decaying plants and dinosaurs.
Let’s call them petroleum and petroleum-related products. We don’t know how much exists but we seem to never run out.
The 60% increase in coal mining isn’t reflected in U.S. electrical consumption; thus, likely an export market supporting the expansion of sales. Still moving by rail to the freighter terminal, unless barge traffic is greatly expanded??? Is Harrison and CSX sidelined by others taking the coal traffic?
More winning will fix that. : )
Dewey defeats Truman!
“”I’d think there’d be huge amounts of wear on the inside of pipes running what is essentially rocks and water through them, at least as compared to liquids.””
There are various thing you can pump along with it to cut down abrasion, we add a variety of compounds depending on needs in the fracing business.
“Fossil fuels are dead, said Hunter Harrison,”
“Hunter Harrison is dead” said fossil fuels
Not everyone has the natural gas at an affordable price—see Europe ($8 therm) and Asia ($12 therm).
Coal exports are no where near terminal capacities.
Mr. Harrison is most likely feathering his nest for a big payoff, FOR HIM.
Dynamic tension, tell a bad enough story, have layoffs and make the employees “happy” to do more or the same with less. Turn in a few quarters of amazing results in a growing economy and cash out before the penny pinching ways show up. It is also called HARVEST and run.
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