Coal Carloadings and Railroad Industry

As has been mentioned, one cost of coal is the amount of time in which a heavy, low powered train occupies a right of way. The slow speed affects operations for faster trains.

The railroad industry has been affected this year by reduced coal carloadings due to a mild winter. See May Issue 2012 of RAILWAY AGE Magazine, page one at:http://www.nxtbook.com/nxtbooks/sb/ra0512/#/2 and data at http://railfax.transmatch.com/. Carloadings are off 16 per cent year to year.

Where will the coal business be in the future? A strategic long term discussion was made by Gilbert and Perl in "Transport Revolutions - Moving People and Freight Without Oil."

There is a future probability for significantly less coal carloadings. It is peak coal which has arrived.

They noted, "Coal's availability is often assumed to be limitless or at least sufficient to allow expanded use for decades. For example, a report from the Massachusetts Institute of Technology suggests that consumption of coal in energy terms could rise by 348 per cent between 2000 and 2050 (i.e. 3 per cent per year). The IEA suggests that proven reserves of coal could allow for 164 years of consumption at current rates, compared with 64 years or natural gas and 42 years for oil.'

"Other sources suggest that mineable global coal resources are much smaller. These include a recent report by Germany's  Energy Watch Group that points to the unreliability of data on proven reserves of coal. The most extreme example given was that Germany itself, reported as having downgraded her proven hard coal reserves in 2004 by 99 per cent from 23 billion tons to 0.183 billion tons. Botswana and the UK have also downgraded reserves by more than 90 per cent during the last two decades. Only Australia - the major coal exporter  - and India have reported growing reserves. China - by far the major producers and user (39 per cent of the world consumption in 2006) - has reported exactly the same reserves of coal each year since 1992, even though subsequent consumption and loss through uncontrollable fires amount to a quarter of this total. The report suggests that China's coal production will peak in about 2015.'

'The U.S. is the second major consumer of coal and has by far the largest proven reserves (about 27 per cent of the world total). It uses less than 0.5 per cent of its reserves each year, but production of high quality hard coal (anthracite and bituminous coal) has already peaked - but the growth had been in less energy dense sub-bituminous and lignite coals. Production in energy terms reached a peak in 1998 and has since fallen by about 4 per cent. The report's authors suggest that U.S. production volumes could be further increased, but only until about 2025, when they will inevitably decline. Production in energy terms could  begin to increase again but would reach a maximum - before the volumetric peak - that would be no more than about 20 per cent above the current value . World volumetric production of coal would also peak in about 2025, with an earlier peak in energy terms." (See pages 138 and 139  of "Transport Revolutions - Moving People and Freight Without Oil.")

A major source of railroad industry revenue faces a decline. The nature of the transportation services provided by the railroad industry without coal carloadings would likely be well served by electrification. Electrification would enable faster operations and denser utilization of the scarce line haul railroad infrastructure.