Railroads banking on coal’s future
By Dave Hannon -- Purchasing, 7/10/2007 9:14:00 AM
Railroads are clearly going to see some benefit from the increase in demand for ethanol—in fact many sources say rail capacity may be a limiting factor in ethanol’s growth. But despite the biofuel boom, railroads are not rolling away from their black bread and butter, coal.
According to a recent Associated Press report, railroads are spending heavily to upgrade tracks and infrastructure that primarily haul coal and for good reason—railroads make a more than one-fifth of their money from hauling more than 7.5 million railcars full of coal a year.
Much of that investment is happening in Wyoming’s coal-rich Powder River Basin. According to this story in the Jackson Hole (Wyo.) Star-Tribune, “the largest U.S. rail expansion in more than 30 years is aimed at increasing capacity and reliability for Powder River Basin coal. At a time when most railroads are downsizing operations, BNSF Railway and Union Pacific are spending more than $200 million to add third and fourth tracks along the 75-mile joint line.”
However, the AP story points out that Frank Wilner, an economist with the United Transportation Union, has accused the railroads of going a step beyond coal advocacy, to lobby against legislative proposals for a new tax or other restrictions on carbon emissions. Wilner says the utility, mining and rail industries are locked "arm in arm, fighting any carbon taxes or any additional costs that might be imposed to clean the coal."
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