Coal for Asian Export Could Lead to Rail Traffic "Like We've Never Seen Before"
Monday, July 30, 2012 - 03:23 PM
(Billings, MT – YPR) An additional 60 trains of coal could roll through the Northwest rail network every day headed across the Pacific if forecasts are correct. Two manufacturing firms signed deals last week to build 20 new barges to increase export capacity, a sign of optimism from coal exporter Ambre Energy that port redevelopment proposals will gain approval.
Terminal developers are eying the lucrative Asian market, hungry for energy -- coal from Montana and Wyoming's Powder River Basin -- to fuel its economic engine. For example, Australian-based Ambre Energy is involved in two proposals to expand the Pacific Northwest port. Exports are constricted because of limited port capacity.
An expansion won't come easy though, considering the chorus of critics citing environmental, traffic, human health, and community concerns with coal shipping, export and even coal use. But in these tight economic times, coal shipping expansion remains popular with the general public, according to one recent survey.
An interim Montana legislative committee became the latest to weigh in on whether the U.S. Army Corps of Engineers should expand an environmental review for Pacific Northwest port projects with a mixed response to the idea, which would slow redevelopment.
The Sierra Club is leading an effort called the Beyond Coal campaign that includes stopping coal exports. Among the concerns cited: the global impacts of coal-fired power plants, the impact of coal dust on human health, and the increase in freight rail traffic that can snarl traffic in local communities.
The Sierra Club, affiliates of the Billings, Mont.-based Northern Plains Resource Council, and local governments like Missoula, Mont. are among those asking the U.S. Army Corps of Engineers to expand its environmental reviews beyond just the port terminals projects and look at broader environmental areas and issues.
Letters from interested parties have become the weather vane revealing which way the winds of legislative oversight are blowing. The railroad BNSF's Chairman and Chief Executive Officer Matthew Rose recently wrote a letter to Wash. Governor Christine Gregoire to address concerns about the port projects. The Energy and Telecommunications Interim Committee (ETIC) of the Montana Legislature sent a letter of it's own to the Corp’s office in Portland, Oregon also opposing an expanded environmental review.
During a recent hearing, the panel heard from proponents, opponents and informational witnesses on the issue before voting on whether to send a letter to the Corps.
All of this back and forth follows a dramatic forecast released in a report by the Western Organization of Resource Councils called Heavy Traffic Ahead.
“Make no mistake about it,” says Terry Whiteside, a transportation consultant and co-author of the report. “This is a huge, huge increase in volume like we’ve never seen before in this part of the world.”
Whiteside projects an additional 27-to-63 trains per day could be the result of increased coal exports to Asia. He calculated that figure based on the export projections of 75 million tons of coal/day by 2017; up to 170 million tons of coal/day by 2022.
“The problem with the study is that it wrongfully assumes that BNSF would originate 100 percent of the Powder River Basin coal,” says spokeswoman Suann Lundberg in Fort Worth, TX. “That’s just not logical. The Powder River Basin is accessed by both the Union Pacific and the BNSF on what we call the ‘joint line.’ 50 percent of it moves on Union Pacific and 50 percent of it moves on BNSF. “
Lundberg says BNSF was not contacted by the authors of the study. She adds the railroad would only have access to one of the proposed six port terminals and the others are either located on other railroads or served jointly among railroads.
Whiteside says he did not contact the railroads, instead he looked at the empirical data and “forced it back on the system.” He adds the study wasn’t designed to be a debate about what the railroad wants.
“I don’t think its any secret that railroads are forecasting the volumes (rail) are going to grow,” says Jim Lewis of Montana Rail Link (MRL), which owns the track between Billings, Mont. and Sand Point, Idaho.
He says there are many reasons, including population and consumption growth for consumer goods, as well as high diesel prices and the semi-driver shortage facing the trucking industry. Lewis says the increase in rail freight traffic is driven by market demands, which can change. He says that’s happening now with the decrease in corn and other agricultural commodities because of the drought and it’s happening with coal.
“I find it kinda ironic that we’re talking about the potential for increased coal traffic in a year when we are forecasting our coal traffic will be below or flat to 2011 volumes,” Lewis says.
He says he also wasn’t contacted for the WORC study. As for the study’s projected increase in rail traffic number, Lewis says they’re not possible given MRL’s capacity constraints. There’s only a single track tunnels over the pass near Bozeman, Mont. and at the Continental Divide. “It would be very costly to try to expand upon that capacity in those two areas,” he says.
Lewis says currently on average, about 19 trains pass through Billings each day, some are MRL traffic, most is BNSF. He says some freight trains terminate at the Laurel, MT rail yards, about 15 miles west of Billings with the remaining 15 continuing west. Lewis estimates the maximum freight rail capacity on the MRL portion of track is about 30 trains/day.
BNSF is investing in its infrastructure. Since 2000, the railroad has spent over $36 billion on maintaining current lines, laying new track, and buying locomotives.
Lundsberg says in Montana, BNSF is spending $111 million in 2012 on infrastructure. She says these capital expenditures, however, are not aimed solely at forecasts of a growing Asian export market for coal.
“Freight traffic will increase with or without coal exports,” she says. “And that means additional traffic and we’re preparing for that.”
That has caused a face-off between groups like the Montana and Billings Chamber of Commerce and environmental organizations like WORC. Economic developers argue Montana and the rest of the country needs the jobs, tax revenue, and infrastructure that increased coal mining and the railroads bring to the region. Conservation groups worry it will be local communities and citizens who will bear the burden of paying for under- and over-passes to re-route traffic past this projected increase in train traffic while corporations are making millions of dollars and should be the ones to pay that cost.
The one thing all sides agree upon is why now is the time for the railroads to have discussions with local governments and citizens about coal, the proposed export terminals, and ways to mitigate the expected growth in rail traffic and resulting traffic jam issues.