Western Railroad Discussion > CP cancels expansion to Powder River

link
http://ca.reuters.com/article/businessNews/idCABRE8B20JI20121203

http://www.trainorders.com/discussion/read.php?15,2932946

Drove through the PRB loadout area yesterday, traffic seemed to be down. After sun-down there seemed to be lots of loads leaving the area though.

Not a big surprise, especially if CP assumes the war on coal will be waged for some time come.

Selling the DM&E line west of Pierre would certainly cut off the future potential for the PRB extension, too. Didn't that plan join the DM&E out near Wall?

Is there a Canadian power plant market for coal? I thought most of the Canadian routings were for Export, the PRB is a long way from a sea port and wouldn't seem to be very viable for CP's traffic map. The US is trashing coal for Natural Gas, and there's that carbon footprint thing going on too.

Hydocarbons have been very, very good for the Wyoming Economy. There's quite a few interesting reports about per capita income in the recent news reports, maybe only the Wyoming local news though.

schmo Wrote:
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> Not a big surprise, especially if CP assumes the
> war on coal will be waged for some time come.

Not so much a "war on coal" as it is the prevalence of cheaper forms of energy (e.g., natural gas) that make coal less desirable domestically at the moment. Simple economics.

SP_8299 Wrote:
-------------------------------------------------------
> schmo Wrote:
> --------------------------------------------------
> -----
> > Not a big surprise, especially if CP assumes
> the
> > war on coal will be waged for some time come.
>
> Not so much a "war on coal" as it is the
> prevalence of cheaper forms of energy (e.g.,
> natural gas) that make coal less desirable
> domestically at the moment. Simple economics.

Other forms are cheaper largely because of the "war on coal". New regs pushing up the cost of using cheap coal are the main driver in making other energy "cheaper". Simply put if item A costs $2 but you add a $2 tax to it then the $3 item B is now "cheaper" than the $4 it'd cost you for item A.

So what if next the government for the good of the environment decides to jack up fuel taxes to make gas cost $6/gallon or more? Now an electric car is "cheaper" than a conventional one pushing sales of those - but in reality it's only "cheaper" because the market has been manipulated to make it that way.

MDH Wrote:
.
>
> Other forms are cheaper largely because of the
> "war on coal". New regs pushing up the cost of
> using cheap coal are the main driver in making
> other energy "cheaper". Simply put if item A
> costs $2 but you add a $2 tax to it then the $3
> item B is now "cheaper" than the $4 it'd cost you
> for item A.
>
> So what if next the government for the good of the
> environment decides to jack up fuel taxes to make
> gas cost $6/gallon or more? Now an electric car
> is "cheaper" than a conventional one pushing sales
> of those - but in reality it's only "cheaper"
> because the market has been manipulated to make it
> that way.


Very well stated. Couldn't have made the point any better.

MDH Wrote:
-------------------------------------------------------
> SP_8299 Wrote:
> --------------------------------------------------
> -----
> > schmo Wrote:
> >
> --------------------------------------------------
>
> > -----
> > > Not a big surprise, especially if CP assumes
> > the
> > > war on coal will be waged for some time come.
> >
> > Not so much a "war on coal" as it is the
> > prevalence of cheaper forms of energy (e.g.,
> > natural gas) that make coal less desirable
> > domestically at the moment. Simple economics.
>
> Other forms are cheaper largely because of the
> "war on coal". New regs pushing up the cost of
> using cheap coal are the main driver in making
> other energy "cheaper". Simply put if item A
> costs $2 but you add a $2 tax to it then the $3
> item B is now "cheaper" than the $4 it'd cost you
> for item A.
>
> So what if next the government for the good of the
> environment decides to jack up fuel taxes to make
> gas cost $6/gallon or more? Now an electric car
> is "cheaper" than a conventional one pushing sales
> of those - but in reality it's only "cheaper"
> because the market has been manipulated to make it
> that way.

Other forms of energy, such as oil and natural gas, are cheaper because of increased production. Increased supply = lower price. So much so that the US is poised to be a top energy producer...take that, OPEC! But even that isn't without environmental impact, since the processes that make that cheaper oil and natural gas possible, such as fracking, are coming under scrutiny for environmental damage (tainted drinking water, anyone?). But in the long run, coal just happens to be an unfortunate casualty in the domestic energy game. Cheaper product, less environmental impact (well, debatable in the long run)...what's the problem?

SP_8299 Wrote:
-------------------------------------------------------

> Other forms of energy, such as oil and natural
> gas, are cheaper...

"Since 1976, coal has been the least expensive fossil fuel used to generate electricity when measured based on the cost per Btu (a unit of energy content). Although the cost of generating electricity from coal has increased, it is still lower than generating electricity from either natural gas or petroleum in most areas."

http://www.eia.gov/energyexplained/index.cfm?page=coal_prices

See this table:

http://www.eia.gov/energyexplained/images/charts/cost_of_fossil_fuels_at_electric_generating_plants-large.jpg

And that's current as of this year and published by the US Department of Energy.

What makes coal "more expensive" is the regulatory costs imposed on actually using the coal - our government has decided to squeeze that last percent or two of improvement out of an already pretty clean process in the name of the environment while ignoring all the real and potential environmental calamity associated with fracking to produce "cheap gas". It's been well documented in my area (Ohio) that in the last 2 years a bunch of coal plants are shutting down or switching to gas purely because the last round of EPA regulations would have required prohibitively expensive additional scrubbing equipment.

I'm sure it's pure coincidence that most of the energy production comes from republican, concervative states

Canada has had a significant number of coal fired electric plants. Like the US, Germany, UK, etc the Canadian government has moved to shut down older, less efficient plants. The attached CBC article outlines the time table for shut downs.

Like the US, Canada has strict pollution rules about how much pollution can be emitted into the atmosphere. Like the US, Canada exports a substantial amount of coal to Asian and other buyers.


http://www.cbc.ca/news/canada/story/2012/09/05/pol-cp-coal-emissions-kent-saskatoon.html

It was 59 degrees in Pittsburgh yesterday. It was 65 today and will be 67 tomorrow. Aside from a one day dip for Thursday, the high temp is going to be in the 40's for the next 10 days here.

In December.

After one of the warmest spring, summers, and falls on record.

After an almost non existent winter last year.

Polar ice caps are receding more and more every year ad we had a record drought in large portions of the US.

I'm as pro coal as the next guy, and someone who really enjoys watching a 10,000 ton coal train thunder up a mountain grade, but I think its safe to say SOMETHING is going on with our climate and we'd be intellectually dishonest to suggest that what we put into our environment has no impact.

If that means our country pushes to reduce emissions from coal, or better yet, find ways to burn coal and capture those emmisions, I'm all for it. If I have to pay a bit more on my utility bill, so be it.

The reason shale gas is suddenly so profitable to drill (and that cost to market is pushing coal out) has little to do with government sanctions but is mostly because the gas industry came up with an innovation called horizontal drilling which allows formations like the Marcellus and Utica to be drilled profitably.

Perhaps pressure from the gas industry will force the coal industry to find similar innovations to reduce emissions and mine more effectively.

Darwinian capitalism: Innovate or die.

Closing coal fired Power Plants was stated in the platform for the 2008 Presidential Elections. Nothing to do with Darwin or Capitalism.

Also noted the Red states are usually the larger less densely populated states that have natural resources that do not include wave action.

Nonsense... What was said in 2008 was that carbon emitters must pay. And they should.

Two massive storms that knocked out power for us for over 10 days (!) each time - 60 miles from the shore - in NJ two years in a row, please tell me it's a coincidence.

I like coal trains too. The railroads are not sitting around waiting for the hammer to fall - they are adapting and finding new traffic.

I'm enjoying the nice warm winter which of course requires less energy to keep warm,
interesting how things work out. Seems the Winter on Mars is very warm as well, I'll
you nice people explain that, oh and there's a 50 to 200 klic traffic jam in Russia
because the snow is so bad the cars can't move. The weather is changing but not in
a very regular manner.

rehunn Wrote:
-------------------------------------------------------
> I'm enjoying the nice warm winter which of course
> requires less energy to keep warm,
> interesting how things work out. Seems the Winter
> on Mars is very warm as well, I'll
> you nice people explain that, oh and there's a 50
> to 200 klic traffic jam in Russia
> because the snow is so bad the cars can't move.
> The weather is changing but not in
> a very regular manner.

The break up of older and established weather patterns is one of the most fascinating aspects of the climate change / global warming etc research. Many places are seeing unusual multi-year weather events.

MDH Wrote:
-------------------------------------------------------
> SP_8299 Wrote:
> --------------------------------------------------
> -----
>
> > Other forms of energy, such as oil and natural
> > gas, are cheaper...
>
> And that's current as of this year and published
> by the US Department of Energy.
>

The data you pointed to only goes through 2011, so does not address the market shift seen by the railroads this year. No one argues that coal was cheaper in 2011. The issue is what happened in 2012 after the warm winter, combined with the fracking, resulted in a large increase in the inventory of gas. For the first 10 months of 2012, the average price of natural gas has been 32% less than it was in 2012 (U.S. Energy Information Administration - U.S. Natural Gas Electric Power Price). I have witnessed the dramatic price reduction this year in the amount of my monthly natural gas royalty checks.

TCnR Wrote:
-------------------------------------------------------
> Is there a Canadian power plant market for coal? I
> thought most of the Canadian routings were for
> Export, the PRB is a long way from a sea port and
> wouldn't seem to be very viable for CP's traffic
> map. The US is trashing coal for Natural Gas, and
> there's that carbon footprint thing going on too.
>

CP's US subsidiaries DM&E and Soo Line serve most of the Upper Midwest. There are at least 5 powerplants that CP could offer single line serve to.

SOO6617 Wrote:
-------------------------------------------------------

> CP's US subsidiaries DM&E...

Not for long.

New CPR president Hunter Harrision said in September that DM&E is to be sold.



Edited 1 time(s). Last edit at 12/03/12 21:09 by GenePoon.