Washington (Platts)--9Mar2011/602 pm EST/2302 GMT
US coal bound for export is the most likely driver of coal shipment growth for freight railroads, the rail industry's top lobbyist said Wednesday. The rail industry wants to keep coal a big part of the energy mix in the US, frequently noting that revenue from coal shipments accounts for about 25% of railroads' revenue and 20% of its jobs, and is opposed to laws and policies antithetical to coal use. More than two-thirds of US coal is shipped to its final destination by railroad every year. "If government fiat is going to come in eliminate that, we think that's a mistake on a lot of levels," Ed Hamburger, president of the Association of American Railroads, told reporters during a conference call. The recent economic recession, an explosion in natural gas production and ongoing questions about the regulation of greenhouse gases has led power producers to pull the plug on dozens of planned coal-fired plants, leaving some in the rail industry wondering where coal shipping growth will come from. Hamburger said export growth will fill part of that void. He expects coal shipments to increase through large East Coast ports like those in Norfolk, Virginia, which are served by CSX and Norfolk Southern. In the West, BNSF and Union Pacific could benefit from planned export terminal developments and expansions along the Pacific coast of the US and Canada. Those projects, however, face steep political opposition and have yet to secure the necessary permits. International shipments of US coal are expected to grow 7.7% to 88 million short tons in 2011, according to March estimates by the US Energy Information Administration. Coal for steelmaking is expected to account for 68% of exports, the government said. While export coal typically provides railroads with their highest margin business, it accounts for a small portion -- about 7.5% -- of overall US production, which the EIA estimated at 1.08 billion st in 2010. --Peter Gartrell, peter_gartrell@platts.comSimilar stories appear in Coal Outlook. See more information at http://bit.ly/CoalOutlook