ISSUE 1 | 2013
Kansas City Power & Light Adapting to Change
2013 Spring Conference
Westin La Paloma, Tucson
America, China, and Coalâ€™s Future PRSTD STD US POSTAGE PAID DENVER, CO PERMIT #353
Looking to lower your overall operating costs?
Is the big decision to Repair or Replace?
door operating systems? Do you have cars that are operating sporadically or not at all? Are you tired of costly spill cleanups due to vandalism or some other inadvertent operation of your doors? If so, you should consider replacing your door operating valves with new state-of-the-art Lexair Second Generation Railcar Valves. From an with our newer, improved design. Changing to these new valves with all their great features helps assure correct and proper operation of your cars. This action will assist you in lowering your overall costs and help you keep your “cost-per-mile” of operation as low as possible.
Second Generation Valve Features:
• Main valve element is based on our rugged “sliding shoe” construction – the same trouble-free design that has been used in our railcar valves for over two decades. • A sequenced mechanical lock maintains the valve in the “door close” position regardless of outside forces or vibration. • The locking feature is released only when an electrical or manual signal to shift has been received. • A visual indicator is operated via the lock mechanism that clearly shows whether the valve is in the “door close” position with the valve element locked in place or if the valve is in the unlocked or “door open” position. • Because they are mechanically locked in the “door close” position, the valves may be mounted in any position or orientation - the valve element does not have to be perpendicular to the rails. • valve position status. • The modular design allows the main valve unit to be removed/replaced in minutes without disturbing the electrical connection or plumbing when repair due to age or service conditions becomes necessary. • Self closing solenoid cover/junction box can be locked to prevent unauthorized access to manual overrides. • Our patented “Safety Check” technology (U.S. Patents 7,093,455 and 7,328,661) is available as a “no-charge” option. • Innovative lock/indicator features latest Lexair, Inc. technology (U.S. Patents 8,038,231 and 8,256,850).
Typical Before Installation Photos
Typical After Installation Photos
Website: www.lexairinc.com E-mail: email@example.com Ph: 859-255-5001 Fax: 859-255-6656
ISSUE 1 | 2013
PUBLISHED BY: National Coal Transportation Association 4 W. Meadow Lark Lane Suite 100 Littleton, CO 80127-5718 Phone: 303-979-2798 Fax: 303-973-1848 www.nationalcoaltransportation.org Editor: Pat Scherzinger Phone: 303-993-7172 scherzinger@ nationalcoaltransportation.org Production By: Suckerpunch Creative Inc. firstname.lastname@example.org www.suckerpunch.ca ©2013 NCTA. All rights reserved. The contents of this publication may not be reproduced in whole or part, without the prior written consent of NCTA. The opinions expressed by the authors of the articles appearing in the Coal Transporter are those of the respective authors and do not necessarily reflect the opinion of the NCTA, its Board of Directors or its member companies. Publication of the articles does not constitute an endorsement of the views that may be expressed.
Meet Your Board: Randy Van Aartsen
Member Profile: Kansas City Power & Light Adapting to Change
Message from the NCTA President – Jerry Wess
Message from the NCTA Executive Director – Tom Canter
Cora Coal Terminal
Considerations Regarding Rail and Mining Accident Investigation Inspections
NCTA Committee Updates
NCTA Welcomes New Members
Tread Conditioning Brake Shoes in Today’s Freight Car Environment
Calendar of Events
Stats at a Glance
AAR Repair Manual - Rule 108
Members Sound Off
America, China, and Coal’s Future
View from the Caboose
2012 NCTA Scholarship Recipients
NCTA Visits Washington
Index to Advertisers
Reflections: Larry Siler
2012 Fall Meeting & Conference Recap Denver, Colorado, September 10-12, 2012
Spring General Conference Preview Tucson, Arizona, April 14-17, 2013
2013 O & M Conference Announcement Kansas City, Missouri, June 10-12, 2013
COAL TRANSPORTER | 1
President’s Report / Jerry Wess
President’s Report A Message from NCTA President, Jerry Wess.
ne of the many responsibilities of the NCTA President is to write a column for this magazine twice a year. When accepting this job last September I said to myself, “Piece of cake.” However, the results of last fall’s national elections make this task difficult. The backdrop of the last three and one half years is a very painful story. Historically high unemployment rates, slow economic growth, fleeting consumer confidence, and an additional $5.4 trillion added to the national debt. We have seen the Federal Government issue a $1.1 trillion stimulus, and inject another $2 trillion into the U.S. economy. Interest rates are near zero, inflation is in “check,” and
additional “corporate loopholes,” including for his billionaire buddies in the green energy business. So we continue to see electric generation by solar, wind, and other renewable energy sources grow at the expense of fossil based generation in the U.S. for the foreseeable future. It seems that in the next four years the left will continue to raise taxes, and expand public sector and entitlement programs. It’s a sad commentary, but we probably live in an environment of economic malaise. Because of the Washington political environment described above, and the presence of cheap natural gas as a result of the hydraulic “fracturing” processes, it makes it more important than ever that
“I feel that 2013 is a year to communicate, and identify opportunities that sustain coal production through economically attractive solutions in both domestic and international markets.” organized labor is quiet. The result is a private sector with trillions in excess to invest. How about the coal and electric utility industry? Well, our industry remains under attack by the just re-elected administration. It was President Obama who insisted that the fiscal cliff tax bill be loaded with tens of billions of dollars worth of
2 | COAL TRANSPORTER
NCTA continue its meeting structure. In 2013 we will again have both spring and fall meetings. The Operations & Maintenance, and both Eastern and Western Logistics committees plan to have informative sessions as in previous years. Our association is strong financially. Thus, we continue to be able to offer the membership opportunities to discuss this
evolving marketplace through the various NCTA meeting forums. I feel that 2013 is a year to communicate, and identify opportunities that sustain coal production through economically attractive solutions in both domestic and international markets. Innovative logistics, new ideas, and evolving economic solutions will determine the future of fossil fired generation. Your Board visited Washington in February. We held coal-related educational and advocacy meetings with members of Congress, Industry associations, and the Surface Transportation Board (STB). The NCTA Board will go back to Washington this fall. Our goal is to continue the dialog with the “inside the beltway” politicians and agencies all year! I feel that we must keep pushing for a more coal-friendly approach among the elected members of Congress, and various Federal agencies. So please continue to support the NCTA. I hope that you will renew your membership and advertise in the Coal Transporter once again this year. I look forward to seeing you at the spring meeting in Arizona! s Best always, Jerry
When you need coal-dust control...
MCRL is all you need.
Meet MCRL, a joint venture with the strength of three Powder River veterans behind it. Midwest, Crown and Rail Link deliver the best people, products, equipment and logistics expertise. With just one call, you can rest assured that all of your car-topping needs from dust control mitigation to product
Your part of the job? Exhale. We’ve got everything covered. Compliance BNSF-approved product Equipment maintenance Logistics Call us today so we can tell you more and discuss your specific needs. 877-243-4000.
applications to equipment maintenance to scheduling will be in good hands.
MCRL 801 East 4th Street, Suite 11 Gillette, WY 82716 877.243.4000 email@example.com
MIDWEST • CROWN • RAIL LINK
Executive Director’s Message / Tom Canter
Keep On Keeping On A Message from NCTA’s Executive Director, Tom Canter.
he coal industry in the United States is facing continuing attack from politicians, regulators, radical environmentalists, and anarchists who are doing so with considerable vigor and malice. The enemies of our most abundant, affordable and sustainable energy source are now openly stating that they will institute policies to eventually eliminate the coal option by executive orders and other actions and regulations based on “junk” science and non-existent technology. As noted at the 2012 NCTA Fall Conference, all of these invidious initiatives are in violation of any obeisance to “Truth, Justice, and the American Way”. The frightening facts are clear: • Manipulating science and imposing regulations to meet a pre-determined political position is not truth. • Government officials that maintain secret e-mail accounts while collaborating and conspiring with special interest groups to harm a segment of our economy is not justice. • Picking winners and losers in the energy economy smacks of socialism, not capitalism, and is not the historical American way to build an affluent middle income society. • Circumventing Congress and the will of the people by using fiat and Executive Order is not the constitutional process envisioned by the framers. • The U.S. now has a current debt that is larger than the annual GDP and the nation cannot afford to recapitalize its electric generating capacity with government subsidies while destroying capital already spent by ratepayers for coal-fired generation. • The economies of the world that are successfully creating and growing a thriving middle income are also increasing the consumption of coal, making coal the fastest growing primary energy source in the world. 4 | COAL TRANSPORTER
In view of the facts listed above, what is NCTA going to do? Well, we are going to “Keep on Keeping On”. Tony Hinkle, the famed basketball coach and motivator at Butler University was noted for his quote “When the Going gets Tough, the Tough get Going”. It is past time to get going! This does not mean we will not evolve with our membership needs, but it does mean that we are going to be active in representing the proper interests of coal and its transportation by all modes. Indeed, we are engaging in closer collaboration with like-minded associations, making more contacts in state
NCTA will provide education, communication, networking opportunity, and problem resolution in all legs of the triangle that represents the coal industry. and national government, and enhancing our website for more communication links. Our Board clearly understands that without coal production and coal consumption, there is no coal transportation. NCTA will provide education, communication, networking opportunity, and problem resolution in all legs of the triangle that represents the coal industry. (production, consumption, and transportation). The budget will be lean in 2013, but not cut to the bone, so that we can be active in your representation and advocacy. Our President, Jerry Wess has outlined more detail of the plans for a robust level of activity in 2013 in his editorial. Remember, the public has never been so ignorant of the facts of energy production, energy consumption, and coal transportation. So, take tough action and tell your “know it all” brother-in-law the truth. Have a safe day producing energy and creating wealth for the good people of North America. Keep on Keeping On. s
ConneCT with the World-Wide leaders Focusing on the
saFe & eFFiCienT use of Coal Featuring Three World-Class User Group Meetings
Technical Forums April & November 2013
annual Meeting May 14-16, 2013 Rosemont, IL Donald E. Stephens Convention Center www.prbcoals.com
annual Meeting Fall 2013
TYPEFACES ASIAN SBC > VERLAG BOLD USERS’ GROUP > VERLAG BLACK
(NOTE: APOSTROPHE IS ENLARGED FROM BALANCE OF TYPE SIZE SO IT APPEARS IN BETTER PROPORTION, ESPECIALLY WHEN REDUCED)
www.asiansbcusers.com 215-1 > C = 100, M = 40, Y = 0, K = 10 229-1 > C = 100, M = 5, Y = 5, K = 0 294-1 > C = 50, M = 0, Y = 100, K = 0 BLACK
BeCome a memBer Today!
access a robust suite of Member-only Benefits:
• Access to user guidelines and best practices written by experienced members. • Access to e-media educational tools such as an impressive vented and unvented dust collector explosion, PRB Coal basics, electrical practices, etc. • Access to an archive of 12+ years of annual meeting presentations • Targeted networking opportunities with generating companies and leading service providers around the world • Interact with your peers, share ideas, seek answers, and enhance communications in the exclusive Member forum • Industry and Generating Company Sponsorships offer additional benefits – To learn more, contact Christy Coleman at ChristyC@tradefairgroup.com or 713-343-1873.
neW! Combustible Coal dust awareness e-learning Course (for member/non-member contractors and employees)
For more information, contact us at firstname.lastname@example.org or 832-242-1969
Meet Your Board / Randy Van Aartsen
MEET YOUR BOARD Randy Van Aartsen
R Randy Van Aartsen Director – Fuel Supply, Wholesale Energy & Fuels We Energies
“For We Energies and our customers, there is one important key to a reliable, competitive supply of electricity; a portfolio that is rich in fuel diversity!” - Van Aartsen
6 | COAL TRANSPORTER
andall (Randy) Van Aartsen is Director of Fuel Supply, Wholesale Energy & Fuels for We Energies (formerly Wisconsin Electric). In this position, Randy oversees all aspects of fuel supply for the electric generating fleet and the natural gas supply requirements for the company. This includes coal, coal transportation, and related services as well as gas supply, gas transportation, gas storage services, fuel oil, limestone and emission control chemicals, environmental emissions credits, and related commodities and services. His favorite part of the job centers around difficult contract negotiations. When almost everyone has dug in their heels or declared an impasse, Randy enjoys finding creative solutions that address the difficult issues. Growing up on a farm in Northwest Iowa, Randy learned a lot about hard work and how to keep the machinery running without calling in “experts” for every little problem. This inspired an interest in mechanical engineering and initially, in construction machinery and hydraulics, leading him to pursue his BS in Mechanical Engineering at Iowa State University. His first job after graduating was for the Koehring Company, a construction machinery manufacturer. Randy says the best thing about that job was a company softball game where he met his future wife Susan, a company accountant. After a short time at Koehring, Randy went to work for We Energies in the construction of a new coal-fired power plant. He discovered that he really enjoyed the hands-on nature of the project and working closely with the construction trades. While working full time, he went on to obtain a MS in Finance from the University of Wisconsin – Milwaukee. At We Energies, Randy has worked in power generation, planning, and power marketing with responsibilities that have ranged from construction and start-up of a coal-fired power plant to siting and acquiring wind turbines to negotiating power purchase agreements. In his most recent prior position, Randy oversaw the
power operations group responsible for developing generation pricing strategies and managing company operations in the Midwest ISO and PJM ISO markets. Randy participated in the Federal Energy Regulatory Commission’s Gas-Electric Interdependency Roundtable and is currently participating on both the Midwest ISO and EEI committees that are looking at the potential impacts of constructing significant new gas-fired generation. Randy is in his third year as a member of the NCTA board and his fourth as Vice-Chairman of the Education Committee. “I have worked in different parts of the energy business, with a variety of suppliers and counter-parties, from construction companies to equipment manufacturers to organizational consultants to power marketers but I have most enjoyed getting to know and work with the good hard-working folks in the coal and coal transportation industry.” In his spare time, Randy enjoys participating in community service projects, especially as a leader for the church high school youth group. In addition to being an “I bleed green and gold” Packers fan, Randy enjoys staying active by biking, kayaking, cross country skiing and disc golfing. Disc golfing, one of the fastest growing sports today with special “Frisbee” discs for driving and putting and bending left or right, etc., is played on courses that are often in wooded, sometimes hilly parks. The “hole” is a steel wire basket on a pole. Wisconsin is a wonderful place to enjoy all of these diverse sports and activities. Randy and Susan have four children, all currently pursuing various levels of higher education, from a PhD candidate in Biomedical Engineering to a first year Medical Student to a senior in Dietetics to a freshman undergrad in Biomedical Engineering (and no, his sister in the PhD program is not his professor). Randy wonders why none of them followed in his passion for energy and power plants! They definitely share his passion for sports, though, as all four competed in collegiate sports. s
A Leading Worldwide Supplier of U.S. Origin Metallurgical Coal • Creative solutions to meet shifting global raw material sourcing patterns • Marketing low, mid, and high-volatile hard-coking coals • Expanded product line includes semi-soft coking, PCI, and anthracite coals • Export throughput capacity at multiple U.S. East Coast ports
Through a “top-off” vessel loading (pictured) Xcoal is able to maximize efficiency and demonstrate the long-term sustainability of U.S. coal in the global marketplace.
Contact us at +1 (724) 520-1630 or email@example.com
NCTA Member Profile / Kansas City Power & Light
Kansas City Power & Adapting to Light Change By Abby Herl, Manager - Fuels, Emissions, & RECs, Kansas City Power & Light
he Times They Are A-Changin”, a song written by Bob Dylan, became the title track of his album released in 1964. Ironically, the song is believed to have been written in 1963 during, most notably, the civil rights movement. Little did Dylan know the song title would remain applicable and carry numerous meanings over the next 50 years. Change is inevitable, and with advancements in technology, change takes place faster and faster. KCP&L’s history extends much further back than Dylan’s 1964 song, but the last eight years have brought about extraordinary change. KCP&L has embraced these changes in order to provide long-term value to customers, shareholders, and employees. The development of the company’s Comprehensive Energy Plan (CEP) in 2005, acquisition of Aquila’s Missouri Electric operations in 2008 (now called KCP&L Greater Missouri Operations Company), new environmental regulations, and conversion of the regional transmission organization to an Integrated Marketplace…these have been, and will continue to be, some of the biggest challenges our Company faces. Ultimately, all of these activities have an impact on coal usage necessitating re-evaluation of the fuels procurement process. Founded in 1888, the history of KCP&L begins long before Dylan’s time. KCP&L is the brand name used to
Kansas City’s Green Impact Zone initiative, located in the city’s urban core, demonstrates the positive impact that funding, coordination and partnerships (both public and private) can have on a target area within the community.
8 | COAL TRANSPORTER
represent the two companies resulting from the merger of Kansas City Power & Light Company (KCP&L) and Aquila’s Missouri Electric Operations, now called KCP&L Greater Missouri Operations Company (GMO). Both companies operate under a holding company called Great Plains Energy (NYSE: GXP). KCP&L is regulated by public service commissions in two states, Missouri and Kansas. KCP&L serves more than 826,000 customers in 47 northwestern Missouri and eastern Kansas counties. The combined service territory is approximately 18,000 square miles, and includes 3,000 miles of transmission lines, 24,000 miles of distribution lines, 320 substations and 6 coal-fired generating facilities.
Comprehensive Energy Plan
KCP&L’s Comprehensive Energy Plan (CEP), the largest project ever undertaken by KCP&L, was developed in 2005 and includes the following strategies: 1. Increasing the Company’s power generation capability, 2. Improving regional air quality through environmental upgrades to existing facilities, 3. Investing in demand-side management, distributed generation, customer efficiency and affordability programs, and 4. Upgrading transmission and distribution systems. Environmental retrofit of Iatan 1 and the construction of a new coalfired unit, Iatan 2, were the two biggest components of the CEP. Iatan 2 became operational in August 2010. A lot can change over the life of a multi-year, multi-faceted plan. Certain aspects of the CEP required numerous community meetings to discuss proposed plans which were ultimately successful. Changes in environmental regulations,
the economy, political environment, and weather are only a few of the drivers affecting the CEP, and KCP&L had to evaluate for potential impacts to keep the plan current. Kansas City’s Green Impact Zone initiative, located in the city’s urban core, demonstrates the positive impact that funding, coordination and partnerships (both public and private) can have on a target area within the community. As part of that effort, KCP&L is deploying a fully integrated SmartGrid demonstration project. Focus for this project includes rooftop solar systems, battery storage, automated meter reading, smart switches and capacitors, and tools to help customers understand their consumption and usage patterns. The CEP was the result of countless hours of hard work and dedication on the part of KCP&L’s senior leadership and management employees.
Acquisition of Aquila’s Missouri Electric Operations In early 2007, midway through the Iatan 2 construction project, KCP&L announced its planned acquisition of Aquila’s Missouri Electric Operations (GMO), which then became final in July 2008. According to Terry Bassham, President and Chief Executive Officer of Great Plains Energy, “Great Plains Energy was at a crossroads. Do we continue to keep StrategicEnergy, a non-regulated retail energy supplier or do we make the move to being a wholly regulated company by acquiring Aquila?” With the purchase of GMO approved, KCP&L’s independent retail power marketer StrategicEnergy was sold. The acquisition of GMO doubled the size of the company, and the local
footprint of both companies helped facilitate the merger. However, significant change was occurring for all employees. Much work was done by department heads, division leaders, and senior leadership to bring the employees together at every level of the organization and take advantage of synergies while still retaining the separation of the divisions. Processes from both companies were evaluated to determine which worked best. The status quo was challenged and traditional business practices weren’t always retained. Though there were many synergies and benefits of the merger, there were challenges as well. KCP&L’s customer base is located centrally, in metro Kansas City. GMO’s territory is in outlying areas North, South, and East of Kansas City. KCP&L operated one division in two states and GMO operated two divisions in one state. KCP&L has more base-load capacity and industrial load, whereas GMO has more peak capacity and rural load. Bassham reflected on what was probably the greatest challenge of the merger, blending workforces from two different companies: “It was crucial to treat incoming employees with respect and make them feel welcomed. After all, we would be relying on these people as part of the broader KCP&L community to move the company forward.” There has been an abundant amount of work in the last five years, and the company is moving forward. We all knew the times were changing, but we also knew we would be stronger as one.
“Customers want to have more of a voice on the changes we are making” - Terry Bassham, President and Chief Executive Officer of Great Plains Energy
COAL TRANSPORTER | 9
Environmental policy has been getting tremendous attention in recent years and that is not expected to change for the foreseeable future. A combination of items being proposed and discussed requires serious evaluation, research, and planning. Numerous regulations around air & water quality, water usage and combustion products are on the horizon, and the timeline and uncertainty of these regulations is introducing many complexities. For example, Cross-State Air Pollution Rule, the legislation proposed by the Environmental Protection Agency, was set to go into effect January 1, 2012. On the last working day of 2011, the U.S. Court of Appeals for the District of Columbia Circuit stayed the rule. This is a perfect example of how decisions around environmental regulations are difficult to plan. Quick implementation by environmental agencies is a challenge for utilities and layering additional uncertainty of the rule making process compounds the challenge. Several years are required for design and construction, and narrow implementation timelines reduce resource availability. These factors can all potentially drive up
10 | COAL TRANSPORTER
overall project costs. KCP&L is aware of the impacts pending legislation could have on our operations and is pro-active in evaluating options for various outcomes. Like KCP&L, our customers are interested in preserving the environment and having safe, reliable and affordable electricity. “Customers want to have more of a voice on the changes we are making”, according
to Bassham, and we are working to communicate with them as much as we can. He goes on to say, “We have to remain flexible, be prudent, manage costs, and manage regulatory risk.” The states of Missouri and Kansas have passed different renewable energy standards with laddered increases in requirements. In 2012 alone, approximately 340 MW of wind capacity has
Coal is the #1 source of ELECTRICITY in the U.S. You move over 6 million carloads of coal each year, your cars make money in service, not in the shop. Keep your cars where they belong, in revenue service.
Our parts are tough and long-lasting.
MAIN TRAINLINE HOSE ASSEMBLIES • TRUCK MOUNTED BRAKE HOSE ASSEMBLIES • EMPTY/LOAD DEVICE HOSE ASSEMBLIES BETWEEN CAR GLADHAND DOOR AIR HOSE ASSEMBLIES • DOOR AIR HOSE ASSEMBLIES • TEST GAGES • GLADHANDS BRANCH PIPE TEES • WELD FITTINGS • SPLIT FLANGES • 90°/ 45° SOCKET WELD FITTINGS • FLANGES • SOCKET WELD TEES 100 New England Avenue, Piscataway, NJ 08854 • www.stratoinc.com • Phone: ( 800 ) 792-0500 • Fax ( 800 ) 378-7286
been added to our system through purchase power agreements. The wind definitely increases the challenge for power dispatching functions.
As a member of the Southwest Power Pool regional transmission organization (RTO), KCP&L is working vigorously to meet the challenges of the Integrated Marketplace, or Day 2 market. Many RTOs already operate in a Day 2 market, but for those in SPP, this a significant change from the Energy Imbalance Service market we currently operate in. The Integrated Market will produce exponentially more data, include Transmission Congestion Rights and Auction Revenue Rights, and will put emphasis on unit performance and other ancillary services. KCP&L is spending time and money to educate and train people on how the current market and Integrated Marketplace differ and how those changes will impact their work area. Coordination and communication will be vital and teams are working to fine tune this correspondence. Providing opportunities for employees to attend relevant working groups and
on-site or on-line training, along with engaging the appropriate industry subject matter experts, is preparing KCP&L for this change. Overall, the CEP resulted in an increase of coal consumption with the addition of Iatan 2. Bringing GMO into the company increased the overall portfolio size as well. A struggling economy, milder than normal weather and little to no load growth are some
We Handle It With years of experience in distribution planning, we do far more than load, off-load, and transfer. With the use of our barge loading facilities, barge off-loading systems, on-site rail car handling and a fleet of trucks standing ready, Three Rivers will be the strategic partner you need to help determine logistic solutions and deliver beyond your expectations. TRANSLOADING CONTRACT PACKAGING TRUCKING LANDSCAPE PRODUCTS ICE MELT
12 | COAL TRANSPORTER
THREE RIVERS marine & rail terminals
external factors offsetting some of our expected coal increase. The uncertainty around environmental policy and the impact of the Integrated Marketplace on coal operations demands consideration as we look at future coal procurement strategies. It is change we face, and to remain successful, we must be willing to make adjustments. Bassham states, â€œI am extremely excited and optimistic about the future of our company.â€?. s
Innovation. Dedication. Experience.
Over a century of dry bulk and breakbulk transport and handling. Innovative Transfer Technologies. Seamless Logistics Packages. Dedicated Customer Service.
Telephone +1 985 871-4403 www.cooperconsolidated.com • firstname.lastname@example.org
NCTA 2012 Fall Conference / Denver, Colorado
NCTA 2012 Fall Conference
Tom Abdali and Angie Bond
Westin Denver Downtown, Denver, Colorado
September 10-12, 2012
he NCTA held its 38th annual Business Meeting and General Conference, September 10-12, 2012 at the Westin in Denver, Colorado. The conference was extremely well attended and participants enjoyed time to network at several hosted receptions and customer events. The theme of this year’s conference was “Truth, Justice, and the American Way”. Special Guest Speaker Professor John Doggett of the McCombs School of Business of the University of Texas at Austin, made a presentation titled As Goes China So Goes Coal. Bottom line, China loves the stuff. China continues to fuel its economic growth with coal. It was a message one wished every voter could hear. Professor Doggett urged attendees to stop apologizing for their contributions to the North American energy. As America’s largest creditor and the world’s largest coal consumer, one cannot have a discussion about America without talking about China. Of course the presidential election, a mere three weeks away, was on everyone’s mind. Would America’s choice be to recognize the truth concerning coal’s contribution to economic growth or would it continue to cede its position to countries that do? Michael McKenna, representing the Institute for Energy Research, gave an enlightening presentation on what voters think about energy. Voters opinions seem to diverge substantially from government direction on energy, but energy is not viewed as a pressing issue. Todd Wynn of the American Legislative Exchange Council (ALEC) discussed the impacts on the states of the EPA regulatory train wreck. The nation’s largest non-partisan association of state legislators, the ALEC includes more than 2,000 state legislators from all 50 states. The focus on transportation issues included updates from many of our Washington based colleagues reviewing the latest on the Surface Transportation Board dockets, fuel surcharge litigation, and private railcar issues. Representatives from the West Virginia Mining Association and the Colorado Mining Association were on hand to cover mining in the both the East and West. Robert King, President and COO of Westmoreland Coal added to the mining picture. In a special presentation on the recent Colorado fires, representatives from Colorado Springs Utilities (CSU) presented information on their pre-disaster planning and their active participation in fighting the Waldo Canyon fire. It was another example of a NCTA member company and their community coming together in the face of adversity. Now that is the American Way. s 14 | COAL TRANSPORTER
Jeff Griffin, Michele Fujimoto
Steve Sharp, Ted Barker, Ken Baranowski
Jennifer Huo, Darrell Wallace, Tom Wilcox, Maureen Horrigan
Amy Goodwin and Perry Newton
Molly Mitchell, Jamie Knez, Jerry Neleson, Lisa Peterson
Barb Busby and Ron Hankins
Tom Zolnerowich, Allen Childress, Carol Scarborough
Pat Jensen and David Bunch
Anna Hagel, Amanda Udicious, Jennifer Huo
Jerry and Gerveann Hutchinson
John Doggett answers questions during the break
Lynn Cielec, Dan Carpenter, Jay Jovanovic, Tom Canter
Molly Mitchell and Terri Humphries
2012 FALL SPONSORS
Macquarie Rail, Inc. Progress Rail Services Associated Terminals, LLC St. James Stevedoring Constellation TrinityRail Ecofab United Bulk Terminals The Greenbrier Companies Xcoal Energy & Resources FreightCar America
Fall Flyer Maxeefish
Lanyards NexGen Resources
COAL TRANSPORTER | 15
New Member Announcement
NCTA WELCOMES ITS NEWEST MEMBERS!
he board of directors of the National Coal Transportation Association is pleased to announce that the applications for membership in NCTA of the following coal industry participants were approved. They join NCTAâ€™s existing member companies working every day through NCTA to foster the cooperation needed to resolve issues faced by coal consumers, coal producers, transporters, rail equipment manufacturers. and services companies.
Ambre Energy North America, Inc. CRMS Rail Sandy Creek Energy Station
A complete list of NCTA member companies can be found on NCTA Web site: http://www.nationalcoaltransportation.org/ index.php/membership/current-members
Slover &Loftus ATTORNEYS AT LAW
Specializing in commercial transactions, litigation and arbitration in the fields of energy, coal transportation and administrative law.
1224 Seventeenth Street, N.W. | Washington, D.C. 20036 | 202.347.7170 www.sloverandloftus.com
18 | COAL TRANSPORTER
If you load or unload coal trains, we should talk. Rail Link loads nearly 400 million tons of coal for mines and Class I railroads each year. That’s more than a third of all coal burned in North America. We also unload and provide railcar switching services for major utilities and industrial customers. See if we can’t improve the efficiency of your coal loading/unloading. Give us a call to learn why so many of America’s largest coal producers, ports and industrial facilities choose to outsource their rail operations to Rail Link.
Rail LInk, Inc. For coal loading/unloading: Joseph W. Evans, 307-682-5450 ext. 107 For contract switching: Al Abruzzese, 717-793-3672
a Genesee & Wyoming Company
Infrastructure / Terminals
ne shining example of the coal industry’s optimism about its future and willingness to invest its own money sits on the Illinois side of the Mississippi River 80 miles south of St. Louis. From a helicopter or plane overhead, Cora Coal Terminal (Figure 1) looks like a model railroader’s dream: a perfect oval of track capable of holding four PRB unit trains (two loads and two empties), enormous coal piles, and an overhead conveyor linking the 2400’ long storage area to strings of coal barges being loaded at the river’s edge. It all looks a little out of scale from the air only because these precisely laid-out pieces of equipment look too small to move such mountains of coal. In its first year of operation (1980), the computerized Cora terminal moved more than 1 million tons of coal. Originally designed to handle 15 million tons per year, Cora has never reached that level of production. Its record to date is 10.6 million tons; it handled 7 million tons in 2012. It is not yet being used to capacity, but it has unlimited expansion capability. Last year, to improve flexibility, Kinder-Morgan (KMEP) engineers and builders added a radial stacker line (Figure 5). Houston Natural Gas’ (HNG) $25 million investment in Cora was part of an overall mine-to-market coal-handling system designed to meet rapidly increasing coal demand. They expected most of this new demand to come from domestic and foreign utility companies switching to coal. The terminal had long-term contracts to supply US utilities as far south as Florida, and negotiations were under way with potential European customers. It was made during a time when oil companies (Exxon, Kerr-McGee, ARCO, Mobil, and Sun) were investing heavily in the PRB coal mining business. Much has changed since then. The oil companies left the Powder River Basin and refocused their efforts on producing oil. HNG was acquired by InterNorth Inc. in 1985, with HNG executives taking top positions at InterNorth. Following the transaction InterNorth was renamed Enron Corporation. Cora Terminal, then a property of Enron, was sold to KMEP in the late nineties and is now one of its prime terminal properties. Cora Terminal is well positioned to take advantage of the expected demand; it can handle unit trains of coal coming both from Illinois mines and from Western mines. Cora and competing terminals nearby offer an efficient link with the Mississippi River system’s 10,000 miles of waterways with access to 21 Midwestern and Sunbelt states, and to overseas markets via Gulf Coast ports.
The key operating features of the terminal are the double loop track, the rotary car dump with unit train car indexer, bucket wheel stacker/reclaimer, auxiliary radial stacker, the conveyor system, and the floating dock with fixed cells. The terminal is capable of transferring rail or truck coal to storage piles, and of transferring coal from storage piles to barges. It is served by the Union Pacific Railroad (UP) on a 2.9-mile double loop track. The track is capable of holding two loaded unit trains, and two empty unit trains. (A typical unit train from the Powder River Basin (PRB) consists of four locomotives and 125 coal gondola cars, and is about 1.3 miles long.) Last year’s tonnage came from Powder River Basin (PRB), Colorado, and Illinois. Cora is located on the Mississippi at Mile 98.5L on an outer bend of the river, where the swifter current naturally scours the river bed and keeps it much deeper than the inner bend. Even now, when the channel downstream is difficult to keep at a 9’ depth at Thebes, Illinois, Cora has 21’ of water at its loading dock. The vertical range of loading capabilities is actually more than has been experienced in the lifetime of the terminal, which includes the 1993 flood and the 2012 drought. The terminal has never stopped loading due to water depth at the terminal. Road access to the terminal is via Illinois Highway No. 3, which serves many of the southern Illinois coal mines. Illinois Route 3 is a major north– south arterial state highway in southwestern Illinois. It starts about 4 miles 20 | COAL TRANSPORTER
Strategic Asset in Kinder Morgan Portfolio
TERMINAL By Dave Gambrel
Aerial View of Cora Coal Terminal, October 2011. River flow is toward the right hand side of the picture. COAL TRANSPORTER | 21
north of Cairo at the intersection of Interstate 57 and U.S. Route 51, and goes north to Grafton at Illinois Route 100, a distance of 187 miles. Using Figure 1 for reference, Highway No. 3 would be a mile or two to the left. In its present configuration the terminal covers 480 acres, and has a storage capacity of over 1 million tons. Current practice is to divide the stacker/reclaimer storage area into ten piles, which provides a storage area for about 850,000 tons. However, this varies with time as the number of coal sources change. The radial stacker pile, a recent addition to the terminal, can hold about 125,000 tons. As Figure 1 shows, only half the surface area inside the rail loop is currently devoted to coal storage. Expanding the terminal would require another stacker/reclaimer, another dumper, and numerous other capital expenditures, but those are things that can be done rather quickly. The rail car dumper (Figure 2) typically dumps about 25 cars per hour. Like most of the other items of major equipment, it was originally designed and built by Dravo, which was acquired by Swedish group Svedala in 2001, which in turn was merged into Metso Mining the same year. Now, when spare parts or service is needed, Cora calls Metso. The coal dumper barrel was exchanged in the late 1990’s, and a new train positioning system was added. With a new rack and pinion indexing system, unit train sizes were increased from 115 cars to 145 cars, which is near the maximum number of cars either railroad (BNSF or UP) will haul out of the PRB. It is also near the maximum number of cars the terminal can take without the last cars blocking the UP mainline. Cora Terminal is one of the terminals chosen for testing CoalCap, a rail car cover specifically designed to minimize coal
Single Rail Car Dumper. Typical dumping rate is about 25 cars per hour
Overhead Conveyor Leading to Barge Loader
dust. Tests so far have shown that CoalCap is a promising device. Coal from the rail car dumper is directed to the main stockpile or the auxiliary stockpile by a system of 72” conveyor belts. The main stockpile is stacked and reclaimed by means of a Metso (Dravo) straight-through counterweighted stacker/reclaimer capable of both slewing and luffing (Figure 3). The operator sits at the end of the boom beside the bucket wheel, where he can observe the coal going into the pile in stacking mode, or back onto the belt in reclaim mode. He can carefully control the boundaries of each pile, and he can stop the wheel if he sees foreign material that has escaped the grizzly and the magnetic separator. The main stacker/reclaimer stacks coal at 3200-3500 tons per hour and reclaims at 5000 tons per hour. The radial stacker yard has 6 mass flow gate feeders situated in an 800’ tunnel. There is a series of 10-72” conveyors and 4-60” conveyors that feed the barge conveyor belt. Reclaimed coal from the bucket wheel reclaimer piles or the radial stacker pile is directed to the 72” overhead conveyor belt (Figure 4), which runs 1400’ to the barge unloader, which loads barges at a maximum of 6000 tons per hour. Stacking and reclaiming in both yards are assisted by Cat D10 dozers and Cat 980/988 wheel loaders. The barge loader can load 5 barges in a string without stopping at box-tobox couplings. Cora owns one Serodino 1200 HP, 56 ton fleet boat, and has one mile of frontage for barge operations. The terminal is served primarily by AEP and Ingram barge companies, but Crounse, Florida Marine and others occasionally serve. Cora has applied for a modified NPDES permit that would allow an additional product, petroleum coke, to be handled at its barge terminal on the Mississippi River. Currently, only coal is received from railcars, stored for short periods and transferred to river barges. Outdoor piles of the petroleum coke would be located in a diked containment area to capture rainwater, as the coal piles are now. The runoff from the piles would be collected in the existing settling pond in full compliance with their NPDES permit and the Clean Water Act.
Hedging Bets: KMEP Terminals Enable Peabody Figure 3 22 | COAL TRANSPORTER
Metso (Dravo) Bucket Wheel Stacker/Reclaimer
Coal strategists look at the Pacific Rim, the booming Asian steam coal market, and determine they need a new coal terminal on the West Coast. Careful strategists such as Arch Coal and Peabody Energy, have decided to hedge their bets. They would work
Appalachian Railcar Services, Inc.
AAR M-1003 Quality Assurance Certified
Railcar Maintenance & Repair
Wreck Work / Mobile Repairs
Railcar Storage (over 10,000 car capacity)
Own, Lease & Sell Railcars (Rail Connection, Inc.)
Trucking Services (Appalachian Transfer)
TERRY “BRUZ” HICKS
Providing Quality Railcar Services
aRS RepaiR LOCatiOnS West Virginia Winfield [CSX] tennessee Point PleaSant [CSX] GaSSaWay [CSX] indiana PeterSburG [CSX] OhiO Virginia radford [nS] iOWa
Milan [CSX, Wtrr] KinGSPort [CSX, nS] Shelburn [CSX] Warren [nS] MiddletoWn [bnSf]
Opening 2013 BentOn COunty indiana – [KBSR, CSX, NS, UP, CN, TPW]
We’ve doubled our fleet to more than 10,000 cars. And with one of the youngest and most diversified fleets in the industry, Macquarie Rail provides leasing and financing in a wide array of structures and terms.
COAL TRANSPORTER | 23
diligently to build terminals in Washington State, but hedge their sites lack the water depth. IMT has the water depth to load the bets in case those terminals were delayed or stopped entirely. Arch Capesize vessels now, and Cora provides a direct access to IMT. Coal made a throughput agreement with Ridley Terminal in BritMoreover, Washington terminals will have no distance advantage ish Columbia; Peabody took a more conventional route: KMEP. over IMT, as they are both 9300 miles from India (Mundra). Peabody has refocused U.S. steam coal exports southward Much of the international coal marketing focus is currently by selecting Houston and New Orleans as primary ports for on two Asian countries, China and India. From a distance pointshipping Colorado, Powder River Basin and Illinois Basin coal of-view Northwest Washington has an advantage over IMT to to international markets. Under new agreements with KMEP, Chinese ports, but not to Indian ports. (See China’s Deep Water Peabody expects to gain additional coal export capacity from Ports, Coal Age, December, 2012.) China is an unclear market KMEP’s Deepwater Terminal for steam coal. Its steam coal and Houston Bulk Terminal purchases are based on arbitragin Texas, as well as increased ing import coal prices against access to KMEP’s International Chinese production. Its two Marine Terminal (IMT), south largest coal export terminals, of New Orleans. Cora makes Qinhuangdao and Rizhao, IMT viable immediately. are sitting on a record invenThe planned expantory of 15 million tons, and sion would more than double numerous other terminals are Peabody’s export capacity along storing Chinese coal. As long the Gulf Coast to between as Chinese brokers can buy 5 million and 7 million tons import coal cheaper than they annually between 2014 and can deliver Chinese coal from 2020. In 2011 Peabody the northeastern Chinese ports, Conveyor Gallery from Rail Car Dump to Radial shipped 6.6 million tons of coal they will do so. There is always Figure Stacker, Designed and Constructed by through export terminals on a downward pressure on import 5 Kinder-Morgan Engineers and Builders the Atlantic, Pacific and Gulf prices. coasts, and it has projected total This is not the case with exports of 10 million tons for India. Tata Power, India’s larg2012. Much of the coal being shipped from Texas and Louisiana est integrated power utility, recently announced synchronization will serve Peabody’s European markets, but Asian markets will be of its 800 MW sized Unit 4 in Mundra, Gujarat. The total power opened as well. generation capacity of Tata Power stands at 7699 MW, reinforcPeabody expects to begin shipping Colorado and Powder ing its position as the largest integrated power company as well as River Basin coal through the Houston terminal in 2014. Shipprivate power producer in India. With synchronization of Unit ments of Colorado and Powder River Basin coal from Louisiana 4, the thermal power generation capacity of Tata Power stands will begin around the same time, and Peabody will extend conat 6847 MW and the generation through clean sources such as tracts at Cora to facilitate shipments of Illinois Basin coal for dohydro, wind and solar stands at 852 MW. This plant is roughly mestic and international markets. To help facilitate its Gulf Coast twice as large as Southern Company’s Plant Scherer, which is export expansion, Peabody has secured a rail service agreement 3564 MW. with Union Pacific Railroad to transport coal from its Colorado The 4000 MW Mundra UMPP is the first of the Ultra mines to Kinder Morgan’s Houston terminals. KMEP has also Mega Power Projects that heralds the entry of 800 MW supercritagreed to invest roughly $400 million in its Gulf Coast terminals, ical boiler technologies in India, which is environment-friendly boosting its annual capacity through the Gulf of Mexico to about and efficient. This technology and the choice of unit sizes helps 27 million short tons. save fuel for the project and cut down greenhouse gas emissions up to 15% as compared to a sub-critical coal-fired power staStrategic Asset tions. In addition, the choice of coal significantly lowers sulfur Cora is a strategic asset in KMEP’s portfolio of bulk terminals. emissions to virtually insignificant levels. It is strategic because it is a key enabler for KMEP’s recentlyIndia looks like a great opportunity for PRB coal. The expanded International Marine Terminal. It is strategic because demand is there, Mundra and other Indian ports can take it will enable PRB coal to be loaded on Capesize vessels at IMT, Capesize vessels, and KMEP’s Cora and IMT terminals can meet vessels that can save considerable shipping costs over the smaller the transloading demands now. When the Panama Canal opens Panamax vessels. It is strategic because IMT is poised to take in 2014, Capesize vessels loaded at IMT will be able to steam advantage of the expanded Panama Canal in 2014. Cora is strainto the Pacific Rim and compete for all the Asian coal business, tegic because it enables the systematic transportation and loading including China. Cora is indeed a strategic asset for KMEP. (See of PRB coal, which is sought by utilities overseas. (See Panama Coal Terminals of India, Coal Age, April, 2012.) s Canal Expansion, Coal Age, June 2012.) Cora Terminal can ramp up PRB production right now, not Dave Gambrel, former director of transportation for Peabody Enerwait for the construction of proposed new terminals in Washinggy, is a coal transportation consultant and writer. He writes for Coal ton State. When those terminals are built most will be unable to Age Magazine, NCTA’s Coal Transporter Magazine, and E&MJ load coal vessels larger than Panamax size, because their proposed Magazine. He may be reached at email@example.com. 24 | COAL TRANSPORTER
The world’s energy needs are growing. And we’re growing to meet them. Walter Energy is the world’s leading, publicly traded metallurgical coal producer for the global steel industry. The Company also produces steam, industrial and anthracite coal, metallurgical coke and coal bed methane gas. Walter Energy has more than 4,200 employees at its operations in Alabama, West Virginia, British Columbia and the United Kingdom. Traded on the NYSE & TSX: WLT Walter Energy, Inc. 3000 Riverchase Galleria Suite 1700 Birmingham, Alabama 35244
FOR MORE THAN THIRTY YEARS, GREENBRIER HAS DELIVERED RAILCAR SOLUTIONS TO INDUSTRIAL SHIPPERS ACROSS NORTH AMERICA. • • • •
Fleet of 2,400 coal hoppers & gondolas Comprehensive billing management Fleet visibility and utilization Maintenance management
• Largest wheel supplier to the Powder River Basin • Largest national network of AAR-certiﬁed repair, wheels & parts shops • Omaha repair services for PRB coal unit trains
CONTACT BRIAN COMSTOCK, VICE PRESIDENT SALES BRIAN.COMSTOCK@GBRX.COM 503-684-7000
COAL TRANSPORTER | 25
We are establishing new international markets for United States coal by unlocking the export potential of the countryâ€™s Pacific Northwest. We operate and co-own US thermal coal mines while establishing new port infrastructure to support coal export and trading. The first of Ambre Energyâ€™s new US west coast coal export terminals is scheduled to commence operation in 2014. Ambre Energy Limited started in Brisbane in 2005 and now has operations in a number of US locations including a base in Salt Lake City, Utah.
NCTA 2013 Spring Conference / Preview
Spring Conference Westin La Paloma Tucson, Arizona | April 14-17, 2013
he NCTA is pleased to be hosting its 2013 Spring Conference at the Westin La Paloma, in Tucson, Arizona. This iconic resort is nestled on 250 acres in the high Sonoran Desert foothills of the Santa Catalina Mountains and features picturesque mountain, city, and golf course views amidst a stunning desert landscape. The NCTA is no stranger to the La Paloma having been one of the first groups hosted when it opened in the spring of 1986. The Spring Conference was held here again in 1999 and the Operations and Maintenance Committee “warmed” up to the place in 2006. In may not look the same this time around though, as an investor group led by the majority owner of the Phoenix Suns took over and completely renovated the property last year. Tucson officially was founded on August 20, 1776 and though once part of Mexico, it officially became part of the United States in 1854. Arizona in the mid-19th century was a place to go through, not to, as prospectors headed to the California to find gold. Although their construction was delayed by the Civil War, railroads would ultimately change that all that as towns grew up around the Southern Pacific’s refueling stops. It was mining, not tourism, that had investors supporting a railroad to the Grand Canyon in the 1890s. Much has changed since then in Arizona as tourism proved more lucrative, but as we have seen time and time again, mining and railroads were fundamental to prosperity and economic growth.
28 | COAL TRANSPORTER
The conference will cover the state of the coal supply, electric utility, rail carrier, and barge industries as viewed by top management. At press time, not all the speakers on the agenda have been confirmed. In addition to the formal program, there will be ample time for networking. The opening Margarita reception on Sunday will be a great time to catch up and set up your meetings for the week. The golf event on Monday attracts nearly a hundred golfers for some long drives and tall tales. The annual NCTA dinner will be held on Monday night under the stars.
Registration is required for each attendee at the NCTA Spring Meeting. The fee is $525.00 for attendees representing a member company and $675.00 for all other attendees when registering prior to March 22, 2013. After this date, an additional $50 fee will apply for all late registrants. All registrations by a nonmember company for more than three individuals will be registered at the member rate. There is a fee of $85.00 for spouses and guests attending the dinner on Monday evening. The fee to participate in the 17th Annual NCTA Golf Tournament is $90.00 which includes green fees, cart, sleeve of NCTA golf balls and complimentary refreshment cart on the course.
Conference sponsorship opportunities are available at three levels of support - Platinum $2,500, Gold $1,500, and Silver $1,000. Please contact Tom Canter at 303-979-2798 or by email to firstname.lastname@example.org for additional details on sponsorships and company recognition.
This year’s hotel insider tip for the Westin La Paloma is “Bring your shorts and sandals”. Unless you’re Ken and Barbie flying in from Florida, you can look forward to enjoying weather that is much better than where you are coming from. Look for an average daily high in the 80s. The Westin offers all the exclusive privileges of the private La Paloma Country Club to its guests including the 27 Hole Jack Signature Golf Course with greens and bunkers newly redesigned by Nicklaus himself. Check out one of the five spectacular pools, featuring Tucson’s longest
resort water slide, the 177’ SlideWinder. The resort also features 10 championship tennis courts, including four clay courts, racquetball, a yoga & Pilate’s studio, weight lifting, and the Westin’s signature Red Door Spa. Hiking, biking, horseback riding and ballooning are all in the resort’s backyard. The Westin La Paloma is located at 3800 East Sunrise Drive, Tucson, AZ 85718. s
RESERVATIONS: Telephone: 1-520-742-6000
ROOM RATES PER DAY: $175.00/day Single/Double Room
Room rates do not include state and local taxes or the resort fee of $6/day (NCTA discounted rate). The resort fee includes guestroom internet services, local calls, in-room safe, self-parking facilities, use of the Fitness Center with regularly scheduled fitness classes, and complimentary shuttle service to La Encantada Shopping Center. The block cutoff date for guaranteed reservations is March 20th.
Sunday, April 14 5:30pm - 6:30pm
Welcome Reception for Early Arrivals
Monday, April 15 8:00am - 11:30am
NCTA Board of Directors Meeting
12:30pm - 5:00pm
Golf Tournament - La Paloma Country Club
4:00pm - 6:00pm
7:00pm - 9:30pm
NCTA Dinner and Entertainment
Tuesday, April 16 7:00am - 8:00am
8:00am - Noon
1:30pm - 4:00pm
Breakout Sessions/Working Groups
Wednesday, April 17 7:00am - 8:00am
8:00am - Noon
Scan the QR code with your smartphone to register!
COAL TRANSPORTER | 29
Considerations Regarding Rail and Mining Accident Investigation Inspections By Mark J. Viz, Ph.D., P.E. Exponent, Inc.,
ailroads and coal mining are two industries in the United States that historically could be considered to be the “birthplace” of worker and operational safety. Although improving or even maintaining a safe working environment involves a continuous effort, these industries have experienced some of their “safest” years recently, based on statistics published by the AAR (see Figure 1), FRA and MSHA.1,2 Sometimes accidents do occur, however, such as property damage or injury to a worker. Ultimately, some “benefits” may be realized as a result of a well-executed accident investigation if certain steps are taken during the investigation soon after the accident has occurred or even while the response is underway. Practical benefits might include new procedures, revised training or physical changes to involved equipment. An intangible benefit that is sometimes overlooked is having the knowledge that the root and contributing causes of the event have been determined with sufficient certainty such that corrective actions can be taken with confidence. An accident investigation might evolve differently depending on the industry and circumstances involved, but there are some basic elements to an accident investigation that could make attaining those “benefits” more likely. One of those basic elements is the site and equipment inspection. As with any accident, those involved in the investigative effort should be aware of the procedures and protocols that have been established by their employer and other authorities, such as state or federal regulators, who may have control over certain aspects of the investigation. Other professionals, such as legal, insurance and risk, might be consulted as well based on the particular circumstances of the event.
A number of industries have codified the elements of the scientific method as a means of investigation. For example, the National Fire Protection Association (NFPA) has established the scientific method as the recommended approach “for the organizational and analytical process desirable and necessary” to perform a “successful” fire cause and origin investigation.3 However, this method, or an adaptation of it as might be appropriate to the rail and coal mining industries, could be used for performing accident investigations in these industries. The following steps are identified by the NFPA as being essential to a proper execution of an investigation based on the scientific method: • Identify the problem • Define the problem • Collect data • Analyze the data • Develop a hypothesis (inductive reasoning) • Test the hypothesis (deductive reasoning) • Select final hypothesis
The scientific method as the basis for the technical investigation The fundamental structure of the technical investigation of an accident is based on the scientific method. Use of the scientific method as the basis for the technical investigation is important because it permits the investigation to be judged and the corresponding hypotheses to be tested according to an objective norm. In other words, the accident causation analysis and findings can be tested by others according to methods that are reliable, reproducible and acceptable to the technical community. 30 | COAL TRANSPORTER
Inspection of the accident site and involved equipment The conditions under which an inspection occurs may be established by the various stakeholders in the process. These stakeholders may include personnel at the facility where the accident occurred, the facility owner and/or operator, customers, legal and insurance professionals, and possibly representatives from local, state and/or federal agencies. Because different stakeholders may have different objectives for the inspection, creating a protocol that is circulated and approved by the participating parties before the inspection occurs might be helpful. Depending on the physical extent of the accident location and the pieces of equipment involved, the inspection may involve multiple objectives. These objectives might include detailed photography and measurements of the location and involved equipment, site surveys, possible laser scanning of the post-accident disposition of equipment and artifacts, and possible retrieval, inventory and storage of artifacts. A well-planned inspection typically involves the consideration of these and many other tasks. A few of these are addressed here in more detail.
Focus on information gathering
A variety of instrumentalities may be used to execute the scientific method. For example, calculations may be performed to determine if a certain load condition caused an equipment component to break. Metallurgical tests may be used to determine the material of construction of a key component involved in the accident or whether that component failed by a single load application (overload) or multiple, smaller load applications over time (fatigue). Anthropometric data may be used by biomechanics or human factors experts to evaluate how an individual involved in an accident was able to do what was claimed. Another means that is typically used is the site and equipment inspection. The site and equipment inspection is directed towards the â€œcollecting dataâ€? component of the scientific method. Typically an accident investigation that is being performed according to the scientific method will involve an inspection of the accident location and equipment that was involved. For a variety of reasons, such an inspection may need to be performed in a limited amount of time and occasionally under less than optimal conditions. As examples, a train derailment that shuts down a heavily traveled corridor or a conveyor failure that slows or even stops certain mining operations are situations that will likely need to be remediated quickly. A site and equipment inspection under these circumstances may need to be completed quickly.
Accidents typically disrupt normal operations. As a result, there is usually a desire to move or repair involved equipment and to return the site back to its normal condition as quickly as possible. In the process, however, important information can be lost. Given these constraints, participants in a site and equipment inspection might want to focus on information collection and not so much on synthesis or analysis during the time of the inspection, unless conditions permit. Sometimes it might be appropriate to prioritize the order in which certain information is sought. For example, if multiple pieces of equipment were involved in an accident at a surface or underground coal mine, it might be best to perform a site survey that establishes the relative position and orientation of the involved equipment to a fixed datum first before taking measurements of each individual piece of equipment.
Attempt to understand what information is available Gaining an appreciation for the different types of information available at a site and equipment inspection is important and can occasionally be non-intuitive. The physical location and condition of involved equipment are typically readily apprehended because they are visually present to the participants. However, other types of information might be available as well, but tracking down this information might require a more focused effort than a simple visual inspection. For example, a lot of machinery today is equipped with a number of sensors or other types of condition monitoring devices that are equipped with imbedded microprocessors. Somewhat analogous to locomotive event recorders, machinery with on-board microprocessors may record quantitative data
Because different stakeholders may have different objectives for the inspection, creating a protocol that is circulated and approved by the participating parties before the inspection occurs might be helpful. COAL TRANSPORTER | 31
that establish certain machine state or performance variables and Take measurements if possible error codes. Retrieval and proper evaluation of such information Frequently, information collected during an inspection may be valuable in helping to establish and then test hypotheses will later be used to perform some type of engineering analysis regarding accident causation. But care must be taken in attemptthat may involve calculations. Calculations involve quantitative ing to retrieve and save this type of information, especially if the inputs, and the better these inputs are known, the more accurate power to the equipment was lost or disrupted during the accident. the results of the calculations will be. Although the most comSituations where potentially relevant machine state and error code mon measurements are likely those that involve distance and information have been lost have occurred when a machine was dimensions, other relevant quantities should not be overlooked powered up after the machine was shut down during the accident if possible. For example, mass (or weight) measurements, though response. sometimes difficult to perform, could be The availability of other types of important if any sort of force, energy or electronic information may be more obmomentum calculations are anticipated. The environmental conditions vious. As an example, video cameras and Other types of measurements might also that were present at the time their related systems installed on large be important: How much torque can a haulage vehicles to monitor blind spots motor or other driven rotational piece of the accident occurred can might maintain a buffer of a certain equipment produce? How much power sometimes inform or otherwise does a driven component consume? number of recording minutes. For rail operations, depending on the location is the static or kinematic coefmodify how certain measurements What of the accident and the circumstances ficient of friction between two surfaces, involved, electronic information from such as between a railcar wheel and the are used or interpreted. the many different types of sensors and top of the rail? Technical literature can condition monitoring devices may prove sometimes provide ranges for some of useful in the accident investigation. These devices might include these quantities under specific circumstances, but if these or wayside detectors that use machine vision to inspect the condition other relevant quantities can be measured, attempts should be of safety appliances on railcars. Numerous other devices are used made if circumstances allow and the participating parties are in to varying extents by the railroads today as well: wheel profile agreement. monitors, acoustic bearing detectors, truck performance detectors, The environmental conditions that were present at the truck hunting detectors and more. Depending on the circumtime the accident occurred can sometimes inform or otherwise modify how certain measurements are used or interpreted. stances involved, especially if claims are made regarding a railcarâ€™s condition as a possible root or contributing cause, collecting these Two of the more common environmental conditions to types of information might be reasonable and appropriate. potentially consider are site luminosity and weather. Luminosity 32 | COAL TRANSPORTER
COAL PREP’S 30th ANNIVERSARY
the gathering place for the
international coal preparation community
conference: april 29 – may 2 exhibit hall: april 30 – may 2 lexington center lexington, KY USA www.coalprepshow.com ● Save time and money with the information, products and services you need, all under one roof!
W! E N Symposium at Coal Prep
USE CODE D44 FOR FREE EXHIBIT HALL ADMISSION & 25% DISCOUNT (valid until 4/28/13)
● Better your plant operation with innovative ideas and solutions ● Discover the latest industry trends and developments Produced By:
Conference Technical Program organized by:
Interested in Exhibiting?
Contact Sam Posa at 913-981-6145 or 800-525-9154 or email@example.com
lected, evaluated and preserved, including but not limited to: • ASTM E2332 – Standard Practice for Investigation and Analysis of Physical Component Failures • ASTM E1188 – Standard Practice for Collection and Preservation of Information and Physical Items by a Technical Investigator • ASTM E678 – Standard Practice for Evaluation of Scientific or Technical Data • ASTM E860 – Standard Practice for Examining and Preparing Items That Are or May Become Involved in Criminal or Civil Litigation For example, the parties may decide to remove and retain a component of a piece of equipment that actually broke. The disciplines of metallurgy and fracture mechanics can reveal a significant amount of information about the forces, both in terms of magnitude and duration, and environment that the component was subjected to prior to its failure. However, if improperly handled or stored, the wealth of information that is contained in a fracture surface can be lost. The author has been involved in a number of accident investigations where critical information from the fracture surface of a component was either lost or compromised because the artifact was not removed and preserved in a timely manner. Artifacts that are removed and preserved likely should be inventoried, and a proper and complete chain of custody should be established.
can play a large role in interpreting what certain measurements of length or distance mean with respect to things like human reaction time. What can be seen in daylight or under bright illumination might be more difficult to see at night or with poor illumination. These considerations typically are germane during inspections of underground coal mining accidents and accidents that occur at night at surface mines or elsewhere. Weather conditions can play a similar role. Mechanical performance of equipment, such as power consumption or output, and coefficient of friction measurements, as examples, might change as a result of ambient operating conditions, including temperature and precipitation.
Involve team members with relevant expertise
Preserve artifacts if possible
Participants in a site and equipment inspection may tend to focus heavily on the items that are most closely aligned with their expertise. Mechanical engineers look at the mechanical elements; electrical engineers look at the control systems; metallurgists or material scientists look at the materials of construction that may have been involved in the accident; human factors specialists look at the “human-machine-environment” interfaces. Given the magnitude of the accident and available resources, it might be wise to include personnel with a range of expertise in the site and equipment inspection. Not only would a technically diverse team be more likely to potentially observe and record more detailed information than what one individual would do, but “on the fly” decisions about the priorities of the inspection might be better addressed by discussing with the team as opposed to a unilateral decision. If the time allotted for the field
Equipment that has been involved in an accident and as a consequence is broken or otherwise not functional can be difficult to examine completely during a limited duration field inspection. If possible, the parties may decide to remove from service and retain certain components or even entire pieces of equipment for examination and analysis at a later time and in a controlled setting. A number of consensus standards exist that provide standard practices for the manner in which artifacts can be col-
34 | COAL TRANSPORTER
The disciplines of metallurgy and fracture mechanics can reveal a significant amount of information about the forces, both in terms of magnitude and duration, and environment that the component was subjected to prior to its failure.
Calendar of Events 2013 January 31, 2013 Payment Due for 2013 Annual Membership Fees
inspection becomes tight or otherwise limited, each technical specialist might likely be better equipped to decide which items should be inspected in detail and which other items are of lesser importance given the constraints of the inspection.
Accident investigations based on the scientific method, and more specifically, site and equipment inspections as an element of that method are ways that involved stakeholders can more systematically arrive at an understanding of the causes of an accident. The information presented in this article is meant to provide some general considerations directed towards how site and equipment inspections might be performed, but each situation must be evaluated and responded to based on its own particular circumstances. The investigation means and methods, and the inspections associated with specific circumstances and events need to be established, checked, verified and approved by the proper parties having jurisdiction and control over such matters. Exponent, Inc. is not responsible for any commercial, technical or other decisions made by readers of this article. s
1 According to the Association of American Railroads publication, “Railroads: Moving America Safely,” dated July 2012, “From 1980 to 2011, the train accident rate fell 76 percent, the rail employee injury rate fell 84 percent, and the grade crossing collision rate fell 81 percent. Since 2000, the declines have been 33 percent, 48 percent, and 43 percent, respectively.” These data are presented in Figure 1. 2 Grayson, L. and Kinilakodi, H., “Underground coal mine safety performance,” Coal Age, January 2012, pp. 50-51. The authors analyze an extensive data set of underground coal mine safety performance metrics published by MSHA. They conclude: “For mine safety, the decade 1991-2000 was outstanding for underground coal mining in many ways. Although the number of mines diminished from 1,484 to 716, a 51.8% reduction, the number of employees
February 4-6, 2013 NCTA Washington DC Visits L’Enfant Plaza Hotel, Washington, DC February 21, 2013 Western Logistics and Planning Committee Meeting The Platinum, Las Vegas, Nevada April 14-17, 2013 Spring General Conference Westin La Paloma, Tucson, Arizona June 10-12, 2013 Operations and Maintenance Conference Intercontinental at the Plaza, Kansas City, Missouri June 28, 2013 Advertising and Editorial Deadline for Issue 2 2013 of the Coal Transporter Magazine July 25, 2013 Western Logistics and Planning Committee Meeting Union Pacific Offices, Omaha, Nebraska Summer/Fall 2013 Presentation of NCTA Scholarship Awards: South Dakota School of Mines & Technology University of Arizona University of West Virginia University of Wyoming David L. Laffere Scholarship Three Member’s Children Scholarships September 16-18, 2013 Thirty-Ninth Annual Business Meeting and Conference The Brown Palace, Denver, Colorado December 20, 2013 Receipt at NCTA office of all re-certification forms for the UMLER Fee Waiver for Calendar Year 2014
fell from 62,427 to 34,131 (45.3% reduction), and coal production decreased from 403 million tons to 373 million (7.5% reduction), on the positive side, the productivity increased by 60.4% from 3.31 tons per employee hour to 5.31. The decade began with 39 fatalities and ended with a record low 16—amazing at the time. … Certainly, the decade 2001-2010 was a mixed bag of good and bad, with many challenges along the way.” 3 NFPA 921, “Guide for fire and explosion investigations,” 2011 edition, §4.2-4.3. COAL TRANSPORTER | 35
NCTA Committee work is at the heart of the Association. The committees provide valuable information and education to members, foster best practices, improve communications among the parties, and keep members up-to-date on new rulings and technologies. This is where members get payback many times over for their annual membership fees.
Western Logistics & Planning
The Western Logistics & Planning Committee met on February 21, 2013 at the Platinum Hotel in Las Vegas. The meeting was very interactive with the group engaged with the speakers and each other throughout the session. Railroad updates were provided by Andy Schroder of the Union Pacific and Will Cunningham of the BNSF. Both gave year end performance data and 2013 project updates. Todd Wynn of the American Legislative Exchange Council presented a summary on activities in Washington. It is a struggle to find anything positive for the industry there. Michael Gipson of AEP River Operations contrasted inland river commerce under the extreme high river conditions of 2011 and low water conditions of 2012. What a difference a year makes. Kelly Olenyik of Standard Labs well received presentation on coal quality analysis turnaround time compared testing results and analysis times from ASTM procedures to the quicker “Rapid and Reliable” methodologies. The networking lunch was co-hosted by AKJ Industries and Flagship Rail Services. The 2013 summer meeting is scheduled for July 24th at the Union Pacific’s headquarters in Omaha, Nebraska. s
Jerry Nelesen AKJ Industries
Jeff Griffin Flagship Rail
Operations and Maintenance
The Operations & Maintenance Committee led by Chairman John Casto (First Energy) is busy planning for its annual conference to be held this year in Kansas City, Missouri. Rich Kotan (OPPD) is again serving as the program committee chairman. The location was specifically selected to allow attendees to tour four manufacturing sites, all of which are between 10 to 15 miles from the hotel. The committee has also continues to offer members great value through its series of free webinars. In October, RB Wiley of TTCI provided an update on railcar alerts. If you would like to make a webinar presentation or have an ides for one, please contact Gayle TenBrink (TrinityRail) who is chairing this educational outreach. Dennis Wanless (Xcel) and Tom Sedarski (Ellcon National) are spearheading a technical review group within the O&M Committee. They have solicited additional member participation. This group has permission to disseminate information that the AAR provides and discusses at the various AAR meeting as long as it is not an official AAR publication. In addition to the activities above, the committee continues to contribute editorial content for the Coal Transporter. The articles in this issue on tread conditioning brake shoes and on rule 108 are a result of this effort. s 36 | COAL TRANSPORTER
RB Wiley at the O&M Conference at Jekyll Island
NCTA COMMITTEE UPDATES Eastern Logistics & Planning
The most recent Eastern Logistics & Planning Committee Meeting was held on October 25, 2012 at the CSX Railroad Education and Development Institute (REDI Center) in Atlanta, Georgia. Four class one railroads were on hand for this unique educational meeting. Performance updates were provided by Mark Hamilton of Norfolk Southern (NS), and Jack Burgess of CSX. Featured speakers were Hark Braren of BNSF Railroad who discussed Emerging Railcar Technologies and Jeff Johnson of the Union Pacific Railroad who presented on western coals moving to the eastern railroads. Mark Hamilton of the Norfolk Southern also presented a brief overview of the history of the modern NS Railroad. Following the meeting, attendees were invited to take a detailed tour of the CSX REDI Center that included a turn in the locomotive simulators. Each attendee was given one-on-one instruction on starting the train, monitoring the track signals and stopping the train at the right spot. Attendees were also given a live rail yard demonstration that showed not only the mechanics of running the yard but also the problem solving that occurs every day. The NCTA appreciates the CSX and the staff of the REDI Center for hosting this event. Planning for the Spring Eastern L&P meeting is just underway. Some of the topics up for consideration include but are not limited to: Mississippi River Conditions, Track Maintenance, Trucking Issues, Short Line Focus-Wheeling & Lake Erie, and NS NextGen E-Commerce. Contact Chairman Edwin Fisher (Arch Coal) or new Vice-Chairman Laurel Klingensmith (FirstEnergy) if you would like to host this meeting. s
Superior reliability. Flexible leasing. Dedicated support. Just a few of the reasons why you get more with a railcar and lease from Mitsui Rail Capital.
More than railcars. More than capital. More than fleet management. More than expected.
Call us today for solutions to your challenges in railcar supply and management.
COAL TRANSPORTER | 37
WESTERN FUELS ASSOCIATION ... to the Power of 24
Western Fuels welcomes Western Farmers Electric Cooperative as its 24th member
- Comprehensive Fuel Chain Management - Volume Driven Contracting - Collective Advocacy
Put Western Fuels to work for you!
WESTERN FUELS ASSOCIATION INC. The National Fuel Supply Cooperative
Maintenance Issues / Tread Conditioning Brake Shoes
By Jason A. Ball, Sales Manager, Anchor Brake Shoe Company, LLC
Tread Conditioning Brake Shoes in Today’s Freight Car Environment “Necessity is the mother of all invention.”
his simple, but poignant statement has surfaced in multiple forms and numerous literary works dating back thousands of years. It expresses our innate and undeniable ability as a species to apply all of our imagination and skill to solve the problems presented to us. This ability for “invention” might be no more evident in today’s rail environment than with the ongoing development of the tread conditioning brake shoe. As wheel replacement costs continue to remain at or near the top of Railroad’s and fleet owner’s list of expenses, the “necessity” of finding a way to reduce these expenditures is clear. Tread Conditioning brake shoes first became popular in North American AAR service late in the 1990’s for their ability to reduce wheel replacements caused by shelling and spalling, or at a
40 | COAL TRANSPORTER
minimum, to prolong the service life of the wheel after a shell or spall became evident. Fleet managers had found a product that was easy to install into existing equipment, relatively inexpensive to purchase and was proving to reduce wheel replacements and costs. However, as in all new product development stories, tread conditioning brake shoes have evolved and the performance expectations have increased since their inception. The drivers for this evolution can be found in increased certification requirements, new tools used to measure wheel conditions, and changes to the shoe’s service environment. At their introduction to the AAR market, tread conditioning brake shoes were required to meet the existing M-926 dynamometer testing program for standard high friction composition freight car shoes. This all changed in 2008 when the AAR adopted the M-997 performance specification. This new
specification increased the minimum retarding force required for a tread conditioning brake shoe from 400lbs to 600lbs during a 45 minute drag test. This “heavy drag test” added to the performance expectations of the tread conditioning products and elevated the safety of the product line. The increase also posed a challenge for manufacturers as higher sustained retarding forces place greater demands on composition based friction materials. In addition to the frictional requirements, a successful 18 month field test was added in which the product must prove an ability to reduce wheel tread related issues by at least 15% over a consist of 400 wheel sets in order to be M-997 compliant. Product performance requirements were not the only change taking place in the world of tread conditioning brake shoes. The primary method by which the industry evaluates wheel conditions has also evolved. The installation of trackside
Wheel Impact Load Detectors (WILD) has steadily increased across North America and in turn greatly changed the most prominent wheel removal causes. WILD equipment measure in units known as Kips which is a measurement of the force a wheel is impacting on the rail. No longer are wheels strictly evaluated by a visual inspection of tread defects, but instead are now categorized, or “flagged”, electronically prior to arriving at rail yards. While many wheel defects can contribute to high Kip readings, a tread conditioning shoe’s value is now often simplified to its ability to maintain and/or reduce Kip levels thus keeping wheels in service longer. The third factor driving the evolution of tread conditioning brake shoes is the ever changing service environment in which the shoes operate. The use of fuel management systems and train handling procedures intended to maximize the use of dynamic braking has minimized the number of brake applications and therefore minimized the amount of times a brake shoe comes in contact with a wheel. As a result, tread conditioning brake shoes now need to provide quantifiable wheel defect prevention or remediation with fewer opportunities than may have been available at their original inception. Further, certain new truck/car designs have been found to induce undesired brake shoe application environments such as excessive lateral brake beam movement. This phenomenon causes concentrated braking effort into the flange root and on the rim of a wheel respectively and can raise issues of increased heat input at these undesired wheel locations. Now that the history, service environment, and performance expectations of today’s tread conditioning brake shoe market have been established, it is important to understand the two currently AAR certified products in more detail. Anchor Brake Shoe Company’s (Anchor) semi-metallic product and Railroad Friction Products Corporation’s (RFPC) iron insert shoe are both fully certified and approved for AAR interchange service. Both shoes have proven to provide wheel tread conditioning benefits; however, they attempt to do so by employing very different materials and mechanisms. The semi-metallic product (Fig. 1) utilizes a combination of metallic
Figure 1 – Semi-Metallic
Figure 2 – Iron Insert
ingredients to create a singular, inorganic material that performs both the frictional and tread conditioning requirements of the M-997 specification. In contrast, the iron insert shoe (Fig.2) combines a composition material for its friction needs and cast iron bar to provide its wheel tread conditioning capabilities. These vastly different materials and designs produce unique performance behaviors specific to each product. As a result of increased industry interest in the heat input brake shoe applications put into wheels, it is im-
thermal management properties which help to pull heat from the wheel and pass it through the friction material at a more rapid rate. As a result of each material’s thermal management abilities, independent laboratory testing has shown semi-metallic products produces wheel temperatures 10% lower than the iron insert shoe at the midway point of a 45 minute drag test¹. Table 1 illustrates a third party’s evaluation of the thermal management properties for the semi-metallic friction material used in Anchor’s tread
Table 1 Thermal Management Properties of Tread Conditioning Friction Material Material Property Thermal Conductivity Thermal Diffusivity Specific Heat
Unit of Measure W/mK, 23°C m²/s, 23°C J/kgK, 23°C
portant to understand the basics of each product’s primary materials. The iron insert shoe employs a composition based friction material. Typically, composition friction material is manufactured using a variety of organic materials such as rubbers and resins. As a result of these organic materials, composition friction materials behave as an insulator of the heat created during brake applications. The semi-metallic shoe does not utilize organic materials and therefore possesses
Semi-Metallic 8.94 4.748 X 10^-6 512
Composition 1.25 6.180 X 10^-7 1002
conditioning shoe and a standard composition based friction material. These material property categories are different measurements of a material’s ability to manage thermal inputs. Note that Thermal Conductivity is the rate heat transfers through the material and therefore a higher value denotes a faster transfer of heat. Thermal Diffusivity and Specific Heat are properties by which a lower value represents a greater ability to disperse heat. All measurements illustrate COAL TRANSPORTER | 41
the semi-metallic friction material manages heat input significantly better than composition alternatives. For the same primary reasons explained above, organic composition material and inorganic semi-metallic material produce different frictional reactions to heat input. Most composition based friction materials will be affected by heat fade during long brake applications. Heat fade is simply a decrease in friction corresponding with an increase in heat. Figure 3 is an M-997 heavy drag test for the iron insert product as run on Anchor’s AAR certified dynamometer. The minimum retarding force at the end of the 45 minute application is above the 600lb requirement; however, in order to account for the unavoidable heat fade, the initial retarding force shows a spike greater than 1,000lbs in the first five minutes of the test. The semi-metallic shoe also maintains a retarding force above the M-997 minimum requirement of 600lbs (Fig. 4); however, since this product does not use organic materials, the degree of frictional fade driven by increased heat is minimal. A spike to approximately 800lbs of retarding force is recorded initially and by the 10 minute mark a steady and consistent level of friction is achieved for the remainder of the test. The semi-metallic material’s initial friction levels in this test sequence are 20% lower than iron insert’s composition materials. This lack of heat fade in the semi-metallic shoe allows for consistent and repeatable retarding forces regardless of material temperature. Even more important than the differences in each product’s primary friction materials is the differences in the mechanisms by which each shoe
Figure 5 Semi-Metallic
42 | COAL TRANSPORTER
attempts to condition, or repair wheels. The cast iron insert embedded in the iron insert shoe’s friction material works as a grinding mechanism which continuously and moderately wears away the wheel tread during brake applications in order to maintain a smooth tread surface. The semi-metallic product repairs wheel tread defects by depositing a thin coating of
Figure 6 Iron Insert
metallic friction material onto the tread surface in an additive process. Laboratory and field wheel profile wear data collected using a Mini-Prof measuring device confirms each product’s intended repair mechanism. Wheels utilizing the iron insert shoes typically exhibit greater wear across the wheel tread than wheels using the semi-metallic product as a result of the grinding process. Wheel tread appearances further highlight the grinding and additive processes taking place. Figure 5 is a dynamometer wheel which had been run with the semi-metallic tread conditioning brake shoe. The tread surface of this wheel has a dull, matte finish resulting from the semi-metallic material transferring from the brake shoe to the wheel. The moderate grinding of wheel material produced by the iron insert shoe produces a wheel with a highly polished finish and very small grooves where the brake shoe has removed small amounts of wheel tread material (Fig. 6).
ArounD the WorlD, ArounD the CloCk
Peabody Energy (NYSE: BTU) is the worldâ€™s largest private-sector coal company and a global leader in clean coal solutions. From mine to rail to port to plants, Peabody delivers value to customers in 25-plus nations on six continents. Our one-stop sales trading and transportation network operates around the world, around the clock. Peabodyâ€™s more than 7,000 employees daily give of their time, talent and resources to energize the world... one Btu at a time.
Figure 7 - Sept. 2, 2010
Regardless of which tread conditioning brake shoe style, the overriding goal of installing either product is to repair existing wheel tread defects and prevent new defects from forming. Field tests have highlighted the effectiveness of tread conditioning brake shoes in achieving this goal. In Figure 7, a large, existing surface defect was documented prior to the installation of a semi-metallic tread conditioning shoe. Figures 8 and 9 illustrate the ability of the semi-metallic shoe to repair the defect over a nine month period. At the time the semi-metallic brake shoe was installed, the wheel in Figures 7-9 had been flagged for Kips in excess of 65. As the surface defect was repaired, Kip levels decreased and the wheel was
Figure 8 - Feb. 15, 2011
able to remain in service much longer than had no tread conditioning product been installed. Type of service and frequency of braking applications will determine how quickly a surface defect can be reduced in size and neither supplier can commit to a set timeframe for wheel repair. What this example does clearly show is tread conditioning brake shoes can and do repair wheels when provided the opportunity to do so. While the primary factor which created the original need for tread conditioning brake shoes has not changed, a new AAR performance specification, increased use of wheel data acquisition systems, and changes to the service environment of these shoes have all contributed to the continued evolution of this
Figure 9 - June 2, 2011
product line. Continued investigation into how these shoes interact with their current service environment and, more importantly, the railroad environment of the future will undoubtedly lead to further advancements within this technology. While the two current products may use different material and mechanisms of repair, there is no longer any debate that tread conditioning brake shoes can be beneficial in both preventing and repairing wheel tread defects. Since their introduction to the market, fleet managers utilizing tread conditioning brake shoes have documented significant reductions in overall wheel expenditures illustrating that tread conditioning brake shoes provide a significant value advantage over standard freight car brake shoes. If you haven’t done so already, tread conditioning brake shoes are a technology worth investigating to determine the potential economic benefits for your operations. s
Works Cited: 1. Cummings, Scott M. McCabe, Tom. Gosselin, Dan. “Brake Shoes and Thermal Mechanical Shelling.” Proceedings of the 2008 Fall Conference of the ASME Rail Transportation Division. Sept. 24-25, 2008. 2. Guelde, Glenn. “Tread Conditioning Brake Shoes in Today’s Freight Car Environment.” Proceeding of the 103rd Annual Convention and Technical Conference of The Air Brake Association. Sept. 19-20, 2011.
44 | COAL TRANSPORTER
STATS AT A GLANCE
NCTA Monthly Forecast - We can do better.
he NCTA Forecasting Process, developed by the Western Logistics and Planning Committee in conjunction with both the BNSF and UP railroads, has been highly successful. The process puts utilities, producers, and the railroads all on the same page with respect to deliveries. While there is 100% participation for the active month, forecast participation percentages 90 days out are well below 50%. We can do better. Our goal is to get the 90 day forecast to an 85% participation level. The rail carriers are working to make the process easier by requiring less detail in the outer months and working on compatible upload/download capabilities. The benefit to you will be rail carriers better prepared to handle your business efficiently. We will be tracking the 90 day statistics in future issues of the Coal Transporter.s
55% 43% 35%
february MARCH 2013 2013
Coal Forecast Calendar - 2013 Forecast Month:
February 27, 2013
February 28, 2013
March 1, 2013
March 27, 2013
March 28, 2013
April 2, 2013
April 26, 2013
April 30, 2013
May 1, 2013
May 30, 2013
May 31, 2013
June 1, 2013
COAL TRANSPORTER | 45
NCTA 2013 O&M Conference / Preview
Operations & Maintenance Conference Intercontinental at the Plaza, Kansas City, Missouri June 10-12, 2013
CTA Operations & Maintenance Committee will hold its annual conference June 10-12, 2013 at the Intercontinental at the Plaza in Kansas City, Missouri. While this is not out typical “off the beaten path” location for an Operations and Maintenance Conference, it comes with a great opportunity to visit four manufacturing sites all located within fifteen miles of the hotel. Transportation for the tours will be provided. This central location should also provide convenient and economical travel arrangements for attendees hoping to stretch those budget dollars. The area’s City of Fountains Foundation has registered 200 fountains in metropolitan Kansas City, including the Diana Waterfall Fountain at the base of the towering Intercontinental. Just steps from the hotel is the historic Country Club Plaza, where Spanish inspired architecture houses more than 150 shops and dozens of fine restaurants in a 15-block area. You may find a favorite eatery but otherwise there will be no need to dine at the same place twice. The conference will include plenary sessions dedicated to covering the technology, design, maintenance, operations, and repair of railcars in unit train service. We will continue our longstanding tradition of hosting a private car owner roundtable discussion. The roundtable consist of a two part session on Monday morning with the first two hours opened to NCTA voting members and rest of the morning open to all members. The conference will feature all the usual events including an opening night reception, continental breakfast, dinner for attendees and guests on Tuesday evening, and will conclude with the annual golf tournament. 46 | COAL TRANSPORTER
Monday, June 10 8:00 a.m. - 10:00 a.m. Private Car Owners Roundtable – Voting Members 10:00 a.m. - Noon Private Car Owners Roundtable – All Members 12:00 a.m. - 1:15 p.m. Lunch by Individual Arrangement 1:15 p.m. - 4:45 p.m. Tours: Griffin Wheel and Timken 6:00 p.m. - 7:00 p.m. Welcoming Reception – Rooftop Bar
Tuesday, June 11 7:30 p.m. - 8:00 a.m. Continental Breakfast – Salon 1 A 8:00 a.m. - 12:00 p.m. General Conference – Salon 1 B 12:00 p.m. - 1:30 p.m. Lunch by Individual Arrangement 1:30 p.m. - 5:00 p.m. Tours: NYAB and Wabtec 6:00 p.m. - 9:30 p.m. Dinner – Rooftop Ballroom
Wednesday, June 12 7:30 a.m. - 8:00 a.m. Continental Breakfast – Salon 1 A 8:00 a.m. - 11:30 p.m. General Conference – Salon 1 B 1:30 p.m. - 6:00 p.m. Optional Golf Tournament at Deer Creek
Registration is required for each attendee at the O&M conference. The conference is open to all NCTA members regardless of whether you have participated actively in the ongoing work of the O&M committee. The conference fee is $375 for members and $525 for nonmembers. After May 17th, an additional fee of $50 will be added for late registrants. The registration fee covers the registration packet of information, admission to all meeting proceedings, the welcoming reception on Monday evening, continental breakfast on Tuesday and Wednesday, dinner on Tuesday night, and all refreshment breaks. There is a charge for each guest of a registrant that participates in the Tuesday dinner and for golf.
Conference sponsorship opportunities are available at three levels of support - Platinum $2,500, Gold $1,500, and Silver $1,000. Please contact Tom Canter at 303-979-2798 or by email to firstname.lastname@example.org for additional details on sponsorships and company recognition.
With 366 guest rooms and 20 suites, the Intercontinental will provide attendees with all the amenities that they have come to expect. For those of you that ended up in Hershey Lodge’s Cocoa and 5th Avenue wings last year, rest assured that this property is built “up and down” and most of your traveling will be on the elevator. The hotel features a fitness room, resort style pool, and complementary internet access in guestrooms.
ROOM RATES PER DAY: $195.00 Single/Double
The cutoff date for the NCTA room block is May 20, 2013. The guaranteed check-in time is 3:00 PM and check-out time is Noon. The Intercontinental is located at 401 Ward Parkway, Kansas City, MO 64112. There is plenty to do in Kansas City including sampling a variety of its famous barbeque. Couple that with a trip to Kauffman Stadium to see the Royals take on the Astros (weekend) or the Tigers (weekdays) and you have an all American outing in this all American City. s COAL TRANSPORTER | 47
AAR Office Rules / Rule 108
Office Manual of the AAR Interchange Rules Rule 108 Overview
By Jerry Charaska, Manager of Railcar Inspection Services, Alltranstek
48 | COAL TRANSPORTER
recently received a call from a client about a damaged car that the railroad inspected and found “owners responsibility” under AAR Rule 108. The car owner dispatched us to inspect the car prior to movement to home shop to determine the extent of damage, possible cause, and responsibility under the AAR rules. The American Association Railroads (A.A.R.) introduced Rule 108 back in 1970 in an effort to handle cars requiring extensive repairs which is based on 36 labor hours including trucks and 24 labor hours excluding trucks. It is important to note that the heading includes the words; OWNERS REPONSIBILITY. The railroad inspects the car and determines if the repairs are owner’s responsibility. If the car is damaged to the extent less than Rule 95.B, the handling line can and does push these repairs to the car owner. Damage could be the result of railroad miss-handling, or load/unload damage. If the extent of repair is beyond the hour or capabilities of the handling line, it’s considered owners responsibility. Car owners do have responsibilities and rights detailed in the rule.
Handling Line Responsibilities
Once the railroad determines that your railcar repairs exceed the repair hour limits, they are required to notify you using the incident report in DDCT (Damaged and Defective Car Tracking) per Rule 115 to include: Defective items, estimated cost of repair, if the car must be loaded on other equipment, or return on it’s own wheels, and if the railroad can make complete or temporary repairs. Furthermore the railroad will advise the point at which car is held if owner wishes to make inspection. (Important as you have only 15 days to notify handling line if you want to inspect) If damaged to the extent of Rule 95, Section B.6.(b) and B.6(c) the handling line must state whether car was subjected to unfair usage conditions outlined in Rule 95, Section A. The railroad must wait and comply with the owner’s decision, and furthermore if items identified are listed in sections 2.a through 2.c must be input through DDCT per rule 115 to car owner or their authorized representative.
Once the car owner receives notification under Rule 108 you have to decide within 15 days if you want to inspect the car, or the handling line complete the repairs, contingent on the handling line’s ability to perform such repairs. Repairs must conform to the original
construction of the car. Temporary repairs are allowed to make the car safe to move on its own wheels to your home shop. Temporary repairs must not exceed hour limits in this rule. When the temporary repairs are completed, bad order tags will be attached to the car and stencils should be applied in at least 2 inch letters as follows: HOME SHOP FOR REPAIRS DO NOT LOAD. If the damage is extensive and the car must be loaded on other equipment, the car owner will be responsible for loading, unloading, transportation, charges over intermediate railroad lines, and of course repairs. If it is determined that the car is more costly to load, transport and repair the car owner has the option to scrap the car as detailed in Rule 108 Section 4. Scrap prices are based on the current AAR Office Manual job codes 4244 (Steel), 4236 (Aluminum) and 4246 (Stainless Steel). The total credit will be determined by deducting cost of dismantling (Rule 107.B) plus applicable allowances for preparation of car for movement to dismantling point. The prices used are the date the car was authorized for dismantling.
Dispute of Responsibility
Where car owner and handling line are unable to agree on responsibility, the car owner shall furnish disposition of the car within the time limit of 15 days, pending definite conclusions on the issue. If disposition is not furnished within 15 days, the handling line can use its own judgment regarding disposition of car under this rule. When the car is loaded on other equipment for movement home, a defect card for “material only” is issued for all the parts associated with, or causing failure of the car and not returned to car owner.
• The Handling Line should use DDCT to report the problems and estimate the cost. • The Handling Line must advise the car owner where the asset is located for inspection and hold the car for inspection when notified by the car owner in the 15 day time limit • Car Owners have only 15 days to respond once you receive the notice from the handling line.
• I recommend that the car(s) are not moved until inspected by a qualified person. • If the railroad does make permanent repairs have these repairs inspected to insure they meet manufacture original construction prior to next loading. • Do not assume the railroad damaged your car. The car may have been damaged during the loading and unloading process. • Consider the cost or loading, unloading, freight, and the estimated cost of repair v. the depreciated value of the car itself. • After the car is inspected and you dispute the railroads claim of owners responsibility, request speed tapes, and send the inspection report to the railroad’s CMO or manager for defect card consideration before authorizing movement. If no defect card is issued, move car in protest of the rules. s
COAL TRANSPORTER | 49
Surface Transportation Board / Update
Surface Transportation Board Update By Thomas W. Wilcox, Principal, GKG Law, P.C.
he Surface Transportation Board 2012 started slow in 2012 but ended with a flurry of activity that will carry over into 2013. This year will also mark a change in the make-up of the Board, as the term of Board Member Frances P. Mulvey expired at the end of 2012. Under the applicable law, Mr. Mulvey may stay on as long as one additional year while his replacement is designated and confirmed, and he has indicated his interest in staying on until then. In the meantime, Board Member Ann D. Begeman was named Vice Chairman of the STB on January 4, 2013. Several key STB proceedings affecting the coal industry and the rail transportation of coal are summarized below:
BNSF Tariff Coal Dust Emission Standards Most of 2012 was taken to develop the administrative record in Docket FD No. 35557, where the Board is considering the reasonableness of BNSF Railway’s
50 | COAL TRANSPORTER
revised coal dust emission control standard included in Item 100 of BNSF’s “Price List 6041-B” and appendices thereto. In March, 2011, the Board ruled that BNSF’s first iteration of this standard was an unreasonable practice under 49 USC 10702. BNSF unilaterally adopted a revised version of the prior standard on July 20, 2011, which eventually resulted in the Board instituting a proceeding on its own motion on November 22, 2011 to take comments and evidence from the public on the reasonableness of a “safe harbor” provision added to the new version. However, the Board also said it would consider other topics it did not address in the prior proceeding, such as the absence of penalties for non-compliance, how the costs associated with meeting the standard should be allocated, and liability and indemnification issues. The last of several rounds of submittals on the revised tariff and related issues was on December 17, 2012. The Board has given no indication that it intends to hold a public hearing before issuing a decision.
Coal Transportation Reasonable Rate Rules On July 25, 2012, the Board issued a Notice of Proposed Rulemaking in EP 715, Rate Regulation Reforms, containing six potential modifications to its rate reasonableness rules. Of particular relevance to captive coal shippers, the Board proposed to change the rules concerning the use of “cross-over traffic” in its StandAlone Cost rate rules. The use of “crossover traffic” in such cases has been a valuable simplifying mechanism utilized by coal shipper complainants for decades. The Board also proposed to modify its Simplified Stand Alone Cost and Three Benchmark Methodology rules – primarily by eliminating and raising, respectively, the current relief limits associated with those rules – but the “cross-over traffic” issue has by far received the most attention in the proceeding from railroad and shipper interests. The final round of comments on the NOPR were submitted to the Board on January 7, 2013, and although the Board could issue a final
rule without holding a public hearing, it would be consistent with past practices for it to do so. Several coal rate cases continue to work their way through the STB and the courts. These include Docket NOR 42136, Intermountain Power Agency v. Union Pacific Railroad Company, where IPA has challenged the rates UP charges for its part of the transportation of coal to IPA’s electric generating facilities at Lynndyl, Utah. In a December 14, 2012 decision, the STB declined a request by UP to hold the case in abeyance pending the Board’s completion of EP 715. In Docket NOR 42133, Arizona Electric Power Cooperative, Inc. v. BNSF Railway Company and Union Pacific Railroad Company – a case where the coal shipper was awarded rate relief and reparations in late 2011 – the STB allowed the two defendant railroads to change the form of the prescribed rates from the challenged joint rates to new proportional rates. The Board allowed this after concluding that the change would have no impact on the relief granted, and that the railroads’ rationale for the switch – “disentangling” UP from the issues
surrounding the acquisition of BNSF by Berkshire Hathaway – was reasonable. Finally, on November 19, 2012, the AAR filed a petition asking the Board to institute a rulemaking proceeding to reintroduce “indirect competition” (i.e., competition from alternative fuels and other non-railroad sources) into the determination of market dominance in coal rate reasonableness cases. Replies in opposition to the petition were filed on January 14, 2013.
Coal transportation stakeholders are also awaiting the Board’s decision in Docket NOR 42120, Cargill v. BNSF Railway Company. In that case, Cargill challenged the reasonableness of BNSF’s mileage-based fuel surcharge program under 49 USC 10702, claiming that it is unlawful because the surcharge program is designed to over recover BNSF’s actual fuel costs. The evidentiary record in the case closed in April, 2012, and the Board will either issue a decision or schedule oral argument prior to issuing its final decision.
On October 9, 2012, the North America Freight Car Association filed a complaint with the STB alleging that the Association of American Railroads’ processes for adopting and modifying the AAR Interchange Rules, and in particular a 2011 change to a rule addressing “truck hunting” of rail cars, both constitute unlawful practices under 49 USC 10702 and other statutory provisions. That proceeding, Docket NOR 42137, North America Freight Car Association v. BNSF Railway, et al, alleges that the AAR’s processes for modifying the Interchange Rules unlawfully produce rules that require private car owners to pay 100% of the costs of compliance while the operating railroads reap the vast majority of the benefits. s Thomas W. Wilcox is a principal in the law firm of GKG Law, P.C., located in Washington, D.C. Tom has represented rail shippers of coal and other entities on rail transportation legal issues for 22 years. Questions about any of the topics discussed above can be directed to Tom at email@example.com.
ALPHA PRODUCTS INC (708) 594-3883 RAILCAR PARTS
A new member of the NCTA, Alpha Products brings decades of engineering and fabrication expertise to the rail industry. Now offering certiﬁed, high quality aluminum extrusions and fabricated parts to the aftermarket, Alpha’s convenient location in Chicago ensures quick turnaround and delivery anywhere in the US. With an ever growing product line displayed in our 3D parts catalog, Alpha can reduce your out of service time and grow your bottom line. Contact one of our experienced sales representatives today! John Marks (847) 877-1492
Dan Hart (847) 404-5150
Check out our 3D parts calalog online:
ISO 9001:2008 Certiﬁed - AAR M-1003 Quality Standard Certiﬁed - AAR M-1002 Speciﬁcation for Tank Cars – Class F Registered - AWS D15.1/D15.1M:2007 Railroad Welding Speciﬁcation COAL TRANSPORTER | 51
ina h C , a c eri m A e r u t u F s ’ oal C and turer, McCombs By John N. Doggett, JD, MBA, Senior Lec Texas at Austin School of Business of the University of
e are in the midst of a massive sea change in the history of American coal. At the beginning of this century, coal generated 50% of America’s electricity. Today coal generates only 32% of our electricity. In July 2012, the United States Energy Information Agency reported that for the first time in recorded history, monthly coal and natural gas-fired generation were equal.1 At the beginning of this century, China did not import any coal. Today, it is the largest coal importer in the world. At the beginning of this century, many American electric utilities were planning the build scores of new coal plants. Now, it is highly unlikely than we will build any new coal plants in America in this decade.
Coal used to be King in America, but today the King is dead. American coal is facing a formidable one-two punch. One is primarily political and one is primarily economic. The Obama Administration has pledged to make it impossible for new coal-fired generating plants to get permitted. In the past, we could address this political threat to coal’s future in America through lobbying and the sheer impossibility of other energy sources being able to quickly make up for coal’s role as a base-load energy source. The second punch, however, has been far more potent than politics. Coal’s role as a base-load energy source is being supplanted by a new cleaner energy competitor that has come out of left field. That punch has been the explosion of shale gas and oil production. In less than a decade, America has gone from
being a natural gas importer to becoming a natural gas exporter. Some experts say that by the end of this decade, America could become the largest producer of gas and oil in the world. Today, hydraulic fracking has created an unprecedented and massive new energy source; shale gas and oil. Shale gas is transforming America’s and the world’s energy resource picture. We are now producing so much shale gas that we have almost exceeded our capacity to store it. We are producing so much shale gas that they are retrofitting American LNG import terminals so that we can start exporting shale gas. This shale gas revolution has been devastating for the domestic consumption of coal. All over America, electric utilities and large energy users are running the numbers. They are running the
1 http://www.eia.gov/todayinenergy/detail.cfm?id=6990 2 The World’s Greatest Coal Arbitrage: China’s Coal Import Behavior and Implications for the Global Coal Market by Richard K. Morse and Gang He, Working Paper #94, August, 2010, Program on Energy and Sustainable Development, Stanford University. 52 | COAL TRANSPORTER
Figure 1: US was the largest user of energy in 2000...
Figure 2: ...China is now the global leader in energy use
Breakdown of global energy consumption in 2000
Breakdown of global energy consumption in 2011
Total use in 2000: 9,355.3 million tons of oil equivalent
Total use in 2011: 12,274.6 million tons of oil equivalent
Source: BP Statistical Review of World Energy 2012
Source: BP Statistical Review of World Energy 2012
Figure 3: Energy is a critical part of China’s development
Figure 4: China’s primary energy consumption by fuel type
Energy consumption has increased dramatically, in particular over the past decade
Coal is the domminant source
Source: BP Statistical Review of World Energy 2012
Source: BP Statistical Review of World Energy 2012
economic numbers, the environmental numbers and the political numbers. All of them are coming to the same conclusion: dump coal; buy gas. If this had happened ten years ago, the shale gas revolution would have destroyed the coal industry in America. However, just when shale gas was changing America’s energy mix, the Chinese started buying coal. So while coal’s future in America is dimming, the global demand for coal over the next two decades will be stronger than it has ever been.
Leading this charge is America’s banker, The People’s Republic of China. In 2000, America was the largest consumer of energy in the world. We used 24.7% of the world’s energy and China used only 10.8%. By 2011, the numbers had flipped with China using 21.3% of the world’s energy and America only 18.5%. This is in a world where total energy consumption had increased by almost three million t.o.e.s. (Figures 1 and 2) in 2009; China suddenly entered the coal import market and in just one
year consumed 15% of all globally traded coal. What made this move puzzling was that at that time, China was the largest producer of coal and had the second largest reserves of coal in the world.2 When one looks at the growth of China’s economy, however, it is clear that the demand for coal is exceeding the delivery capability of China’s coal industry. China’s energy use has risen by more than 150% in the past decade. (Figure 3) More than 70% of China’s energy comes from coal. (Figure 4) COAL TRANSPORTER | 53
Figure 5: Coal production is China has grown rapidly
Figure 6: Breakdown of global coal production
Coal production in China reached 3.5 billion tons in 2011
China is the largest coal-producing country in the world
Source: BP Statistical Review of World Energy 2012
Source: BP Statistical Review of World Energy 2012
Figure 7: Per capita energy consumption in China is relatively low
Figure 8: Comparing countries with similar economic structure...
Per capita energy consumption levels of selected nations (2009 data)
GDP composition of selected countries
Source: US Department of Energy, Energy Information Administration (EIA)
Paradoxically, while China is now the largest importer of coal, she also is the largest producer of coal. (Figures 5 and 6) China’s coal consumption grew 9.7 percent between 2010 and 2011 and India’s coal consumption increased 9.2 percent. China consumed 49 percent of the world’s coal supply in 2011. While demand for coal in China decreased in 2012, China cannot continue to grow its 54 | COAL TRANSPORTER
Note: Industry includes mining, manufacturing, energy production and constuction. Source: Central Intelligence Agency The World Factbook
economy without importing more coal. When you look at China’s per capita consumption of energy, however, the growth potential of China’s energy market is obvious. (Figure 7) One reason is that China is a relatively inefficient consumer of energy today. (Figures 8 and 9) In 1990, China was totally self-sufficient in oil. Today, it imports 50% of its crude. (Figure 10)
China is making deals around the world to insure that it has an ample supply of energy resources for its future. Whether in Canada, Africa, or Iraq, China is using its wealth to buy an energy insurance policy for its future. (Figure 11) Officials in America’s Embassy in Beijing believe that it is possible that China’s economy can grow by 7% a
year for the next two decades. If that happens, China’s economy will be four times larger in 2033 than it is today. The mother’s milk that is a precondition of this continued growth is clean and reliable energy. The only energy source that can support this level of growth in China (and India) is coal. Because the data is very clear; China has not yet hit its stride when you compare her per capita consumption of steel with those of advanced economies. (Figure 12) According to Time Magazine, if the future of coal is looking dim in the U.S. with cheap natural gas and a Democrat in the White House, it’s as bright as a steel furnace in much of the rest of the world. In 2010 the global coal trade rose by 13.4%, reaching 1.08 billion metric tons. In a new report World Resources Institute (WRI) estimates that nearly 1,200 new coal plants are at least in the planning stages worldwide. Though the projects are spread across the globe, more than three quarters of the new plants are set to be built in India and China. If every one of those plants were to be built and activated, it would add 1.4 million MW of coal fired electricity capacity to the global grid.3 What do we do? Simple, we export and we innovate. America is a capitalist country that was built on trade and innovation. The Chinese and Indians and others in emerging markets will need stupendous
Figure 9: Illustrates that economic activity in China tends to be energy inefficient Energy intensity level of selected countries
Source: US Department of Energy, Energy Information Administration (EIA)
100,000,000 TONS That’s right, one hundred million tons. That’s the milestone St. James Stevedoring passed in 2012.
With the changing markets – it’s time you discovered the SJS advantage that the shippers of those 100,000,000 tons have been utilizing since 1985 and claim the benefits for yourself: • High Speed Loading –Advanced Loading Guarantees • Handling Cape Size Vessels on the Lower Mississippi River • The First and Only Mid Stream Mechanical Auger Sampling System • Handling Six Vessels at One Time • Immediately Available Capacity • Flexibility
St. James Stevedoring
Mechanical Marine Auger Sampling System
www.sjstevedore.com | firstname.lastname@example.org | 1-225-562-3919
IBJ Award Winner 2012
See your vessel loading with LIVE streaming video!
Shipping through the US Gulf is your economical gateway to the world.
COAL TRANSPORTER | 55
Figure 10: China’s crude oil imports by source The Middle East and some African countires are significant suppliers of crude oil in China (2010 data)
Source: US Department of Energy, Energy Information Administration (EIA)
We must invest in the development of technology to reduce emissions when people burn coal. ...When we come up with new technologies to make coal a cleaner energy source, there is no limit to the growth of coal consumption on this planet. 56 | COAL TRANSPORTER
amounts of energy to continue growing their economies. They simply can’t do that with burning significant amounts of additional coal. They like the fact that some of our coal is the cleanest coal on the planet. We must expand our coal shipment facilities on the West Coast of North America to be able to export as much as the market will bear. If it becomes politically impossible to do that in America, we must build these facilities in Canada or Mexico. The market is there and if we don’t sell them coal, they will get it from Australia, Africa, Indonesia, Latin America and elsewhere. However, we have to do more than just produce and ship more coal. We must invest in the development of technology to reduce emissions when people burn coal. As we saw recently in Beijing, without new technology to reduce emissions, a massive increase in the use of coal in China could have catastrophic health consequences. When we come up with new technologies to make coal a cleaner energy source, there is no limit to the growth of coal consumption on this planet. America, today we are behind in innovation curve. We are not leaders in the production of coal gasification technology. The Chinese and Indians lead in that area. We are not leaders in innovation when it comes to super critical and ultra-super critical coal plants technology. That has to change, because the future of our entire economy, not just coal and energy, is completely dependent upon our ability to innovate and create new, cleaner energy producing technologies. By 2050, half the people on this planet will be Indian and Chinese. By 2050, China will be, by far, the largest economy in the world and India will be neck and neck with America for the number two slot. The economies of China and India will be six to twelve times larger than they are today. Their middle class will have grown from 350 million to more than two billion. The energy implications of this massive growth are obvious. The environmental implications of this massive growth are clear. The country that comes up with innovative new technology to make it possible to burn coal and other fossil fuels at the lowest possible level of harmful emissions will have products that everyone in the world must have. Some estimate that China will have to spend more than four trillion dollars to grow its energy sector in the next two decades. We must invent the technology that they have to buy. It is that simple. s John N. Doggett is an award winning Senior Lecturer at the McCombs School of Business at The University of Texas at Austin (UT). John is also the Mc‑ Combs Faculty International Alumni Liaison, a Senior Research Fellow at UT’s IC2 Institute and co‑founder of UT’s International Idea to Product CompetitionJ. John’s research and teaching focus is on global
competition, entrepreneurship and sustain‑ able energy. Since 2003 John has led MBA business observation tours to China, India and now Israel. John has taught seminars on global competition and entrepreneur‑ ship at universities in Hong Kong, Japan, Singapore, Taiwan, Mexico, Thailand, and Austria. John has extensive consulting experi‑ ence working with start‑ups to Fortune 500 firms in Asia, Europe and the US. John has helped the senior leadership of several energy companies review their corporate strategies. John is a board member of a soft‑ ware company, a health services technology startup and an advisory board member of a green building supply company. John received his BA degree from Claremont Men’s College in Claremont, California, his Juris Doctor degree from Yale Law School and his MBA degree from Harvard Business School.
Source: Wall Street Journal, July 16, 2012
The country that comes up with innovative new technology to make it possible to burn coal and other fossil fuels at the lowest possible level of harmful emissions will have products that everyone in the world must have. 1_2pgWrkStTraining_Layout 1 7/2/12 12:02 PM Page 1
My Employees don’t have time for training. Flexible Scheduling. Anytime. Anywhere. CORRESPONDENCE TRAINING • WORK SITE TRAINING • CONSULTING
The Railway Educational Bureau
The Railway Educational Bureau, a sister company to Railway Age, offers timetested courses that bring knowledge training direct to you and your employees. Our training services can support your OJT programs and refresher training. Choose among our correspondence programs, instructor-led worksite training, or a blended approach of both types. www.RailwayEducationalBureau.com
The Railway Educational Bureau, 1809 Capitol Ave., Omaha NE, 68102 Toll Free (800) 228-9670 • (402) 346-4300 • www.RailwayEducationalBureau.com COAL TRANSPORTER | 57
NCTA Scholarship Announcements
2012 Scholarship Recipients The NCTA awarded four scholarships to children of the employees of NCTA member companies at its annual fall conference in Denver. This year it was just so close that we added a fifth scholarship! These are the talented and hard-working recipients By Emily Regis, Arizona Electric Power Cooperative NCTA Treasurer and former Chairman of the Education Committee
Michelle Hummel - David Laffere Scholarship Winner Case Western Reserve University | Civil Engineering Michelle Hummel is a junior at Case Western Reserve University. She plans to complete her bachelor’s degree in civil engineering with a focus in environmental engineering in May of 2014. After graduation, Michelle plans to attend graduate school to earn a master’s degree in environmental or water resources engineering. Michelle then hopes to work as a water resources engineer. She is interested in designing water and wastewater systems or working to rehabilitate streams and other waterways. She became interested in water resources engineering after she joined the Engineers Without Borders (EWB) chapter at her university in her first semester of college. Through this organization, she has been able to use engineering methods that she learned in the classroom and apply them to real world situations. During her first year as a member of EWB, she helped design the supply line of a water system for a rural community in the Dominican Republic and then later traveled there to take charge of the installation of one line of the system. This challenging experience has helped to shape her career goals. Michelle is extremely grateful for the NCTA scholarship that will help her continue to pursue her passion for water system design. Michelle is the daughter of David Hummel, an employee of American Electric Power in Canton, Ohio.
Laura Blunk Truman State University | Chemistry Laura Blunk is a senior attending Truman State University. After completing her bachelor’s degree in chemistry in the spring 2013, Laura will be looking for an opportunity to do research with materials that can improve the efficiency and environmental impact of using the nation’s natural resources, such as coal, for energy. Laura has already begun to work towards her goals and research interests. She recently was involved in a professor’s research project on synthesizing an effective and reusable carbon dioxide scrubber for power plant smoke stacks. She has also participated in two summer internships that have given her many effective lab skills. She was a Summer Scholar at the Stowers Institute for Medical Research in Kansas City, MO in 2010. During the summer of 2012, she was part of a Stevens’ Fellowship Program at the University of Missouri-Columbia. Laura is already on her way toward a career in researching answers to today’s energy-related challenges. Laura is the daughter of Ed Blunk, an employee of Kansas City Power and Light, Kansas City, Missouri. 58 | COAL TRANSPORTER
Jacob Leigh University of Wisconsin | Biology and Environmental Science Jacob Leigh is a senior at University of Wisconsin, Green Bay working towards a double major in Biology and Environmental Science. Jacob would like to work for a utility company in an environmental related field after graduation, and also become involved in promoting public awareness of environmental issues such as clean water initiatives and waste disposal efforts. As a student worker in the Environmental Department at Integrys, Jacob’s responsibilities included a variety of field studies, lab work and analytical data entry. The field work included sampling wells, monitoring invasive species and stream quality and leading stranded organism surveys during draw-downs at reservoirs. Another aspect of this job was the research and compilation of information on threatened bats, larger birds and invasive plants at substation and transformer sites owned by the utility. Jacob is strongly committed to serving his community and volunteers his time as an assistant Boy Scout Master. Jacob has also trained as a lifeguard where he has gained valuable emergency lifesaving and instructional skills, and has also worked as a student ambassador for the University of Wisconsin—Green Bay. Jacob is also involved with Cru, a Christian organization for college students, and is a member of Phi Eta Sigma. After graduation from University of Wisconsin—Green Bay, Jacob eventually plans on obtaining a graduate degree in Environmental Science. Jacob is the son of Robert Leigh, an employee of Integrys Business Support, LLC – Wisconsin Public Service, Green Bay, Wisconsin.
Meghan Mullins University of Virginia’s College at Wise Biology with a minor in Psychology Scholarship winner Meghan Mullins is pursing both a major in Biology and a minor in Psychology at University of Virginia’s College at Wise, VA. These education goals will help Meghan to pursue a career as a Physician’s Assistant after enrolling in a graduate degree program in medical science. After obtaining these degrees, Meghan would like to return to her home town in Dickenson County, VA to practice medicine. Growing up in rural Virginia, Meghan observed that the region lacked a large number of health care providers. This region of Virginia is a designated medically under-served area where community members must often travel long distances to obtain emergent treatment or to see a specialist. Meghan was drawn towards a career as a Physician’s Assistant after speaking with a local PA in her community. In June 2012, she began to shadow a local physician and his Nurse Practitioner in order to expand the scope of her medical experience. In March 2012, Meghan was selected as a summer student fellow for the Healthy Appalachia Institute. Meghan focused her research in this program on the effects of tobacco use on the pulmonary function of coal miners diagnosed with Coal Worker’s Pneumoconiosis. Being chosen for one of the NCTA scholarships has allowed Meghan to focus on her educational and professional goals of returning to her hometown and helping the members of her community with a trustworthy option for healthcare close to home. Meghan is the daughter of Carroll Wayne McCoy, an employee of Alpha Natural Resources, Paramount Coal Company Deep Mine # 41, McClure, Virginia.
COAL TRANSPORTER | 59
NCTA Scholarship Announcements Continued
Hannah Varel University of Missouri Accounting Hannah Varel is on track to graduate from the University of Missouri with a Master’s in Accounting. Hannah is currently a junior and has very challenging, yet reachable career aspirations. Hannah loves sports and hopes to be hired full-time out of college by a Big 4 Accounting firm and establish herself as an accountant in the professional sports industry. At “Mizzou”, Hannah is a member of the Association of Certified Fraud Examiners and is also on the women’s basketball team and hopes to be accepted into the Beta Alpha Si Accounting Fraternity. Along with Hannah’s challenging academic and extra-curricular schedule, Hannah is also an intern at Ameren in the strategic sourcing department. At Ameren, Hannah finds that she is required to think outside of the box and analyze data for both financial and risk analysis. Teamwork has also been a necessity in this position as she must communicate on multiple projects; specifically while in assisting with an internal process development project. Hannah is a diligent worker and strives for perfection at school and in the workplace. Hannah comes from a large family and is very grateful to the NCTA for awarding her with this scholarship that has enabled her to continue to pursue her degree at University of Missouri. Hannah is the daughter of Ken Varel, an employee of Ameren, St. Louis, Missouri.
24/7/365 monitoring & management of railcars Coordination of railcars w/shippers needs, mines and railroads Immediate notification of problems and delays Customized reports of activities Assistance with contract development and administration Leasing services Railcar storage monitoring to eliminate lost cars
In good times or tough situations, our experts work hard to assure the optimal utilization of your critical railcar assets. Give us a call and we will customize a program to meet your specific needs.
21 Carriage Hill Lane • Fredericksburg, VA 22407 phone (540) 604-6094 • fax (540) 301-0703 • www.maxeefish.com 60 | COAL TRANSPORTER
CROWN IS CHANGING THE “PROFILE” OF THE INDUSTRY!
Crown Products & Services, Inc. 12821 E. New Market Street, Suite 310 Carmel, IN 46032 Phone: 317-564-4799 FOR MORE INFORMATION CONTACT:
Philip Poletti Phone: 317-710-8073 Email: email@example.com
Washington Another Marathon Event Pat Scherzinger, NCTA Communications Director
he NCTA Board of Directors and members of the Operations and Maintenance Committee made their annual visit to Washington in early February. The visits were delayed from their usual November time slot due to the presidential election. Meetings with lawmakers, regulators, government, associations, industry groups and members were educational for all parties. An early meeting Monday took a group to the National Rural Electric Cooperative Association to meet with NRECA CEO Glenn English. This would be the last meeting with Glenn, since he has announced his retirement and will be replaced by former US Congresswoman Joanne Emerson. Representatives from fellow associations, industry groups, law firms and others working on behalf of coal and utility industries in Washington gathered at noon Monday for what is affectionately known as the “Big Cheese” luncheon. The National Mining Association, GKG Law, Slover and Loftus, L. E. Peabody, Maxeefish, Hellerworx, National Rural Electric Cooperative, American Chemistry Council, Thompson Hine, American Waterways Council, American Legislative Exchange Council, and the Institute for Energy Research were all represented. Each gave a short briefing on the current issues within their area of expertise. Following 62 | COAL TRANSPORTER
lunch, the NCTA group split up to cover more ground with one group heading to the US Capitol to join other shippers at the CURE Rail Dependent Shippers Meeting while a second group headed to the Senate Russell Office building to meet with a member of Senator James Inhofe’s (R-OK) staff. Monday evening was taken up with an official Board of Directors meeting with all eleven Board members present. At the meeting, three new NCTA members were approved, the 2013 budget was finalized, and work on the other business of the association took the group past 11 pm. Tuesday began at the Surface Transportation Board where the NCTA met successively with all three commissioners. Universally discussed was the “Sunshine” Rule that prevents any two or all three Commissioners from talking to each other on issues before the Board outside of an official public meeting. As a result, much of the communication between the commissioners on active cases must be done using staff as intermediaries. While the staff is highly qualified and diligent, we have all played that party game “telephone” and know how a message can get mangled even with the best of intentions. Chairman Dan Elliott was the first to meet with the group. Chairman Elliott genuinely promotes openness at the STB as exemplified by his efforts to lower filing fees, hold oral hearings, and promote
Inside the US Capitol Building
In the Cannon House Office Building
the customer assistance program. One of the topics discussed with the Chairman was the legal discovery and interrogatory process in STB cases. Tagging every document as highly confidential as some parties do is overly burdensome since only the attorneys can review these documents. The group also discussed the effort to update the Uniform Railroad Costing System (URCS). The replacement process for Commissioner Frank Mulvey, scheduled to leave the Board sometime in 2013, was discussed. The current Board members have no input in the decision. The NCTA was happy to be able to meet with Commissioner Mulvey one last time and to thank him for his many years of service. The final meeting was with ViceChairman Ann Begeman, the newest member of the Board. Ms. Begeman has served on the STB Board only since May 2011, but has twenty-one years of experience in transportation policy. As we have not yet had the pleasure of welcoming Ms. Begeman to the NCTA podium, she has been invited to speak at the Spring Conference in Tucson. Next up was the annual meeting with the Energy Information Administration (EIA) within the Department of Energy. EIA staff presented its projections for coal and for natural gas supply and demand as modeled in the Annual Energy Outlook 2013 Early Release. Presentations were shorter this year so there was time for delving into the assumptions and modeling methodology.
Meeting with Congressman Gardner It was an interesting and productive discussion. After a quick lunch at the mainly self serve Smithsonian Café located just across the street from the DOE, the group headed off to the Cannon House Office Building to meet with Representative Cory Gardner. Congressman Gardner was set to speak to our attendees at the Fall Conference via Skype, but the Westin had internet issues at just the wrong time and it didn’t happen. A second term congressman representing northern Colorado, he is both supportive of fossil fuels and of subsidies for renewable generation. His district contains most of the wind turbine generators in Colorado. The final meeting on Tuesday was with the Association of American Railroads. The meeting began by viewing the latest misleading Greenpeace video regarding coal for export. This is one area where the NCTA and AAR have common
interests on issues affecting our industry. In other areas we might not always see eye to eye but are always ready to work constructively on these issues. The AAR provided an update on where the carriers are on Positive Train Control including the overall cost and the timeline for implementation. Private car owner issues were not discussed due to some ongoing proceedings with the North American Freight Car Association. The NCTA will likely be back on its November schedule that will mean a second trip to Washington in 2013. The truth of the matter is that Washington needs to be reminded everyday of four key things coal provides to the economy low cost electricity, energy independence, fuel diversity, and system reliability. s
NCTA “Big Cheese” Luncheon
Library of Congress
COAL TRANSPORTER | 63
NCTA / Member Sound-Off
The Coal Transporter asked members and associates to offer their opinions on a current topic in the coal industry.
new year always brings a new perspective, renewed hope, and a refreshed sense of determination that all things are possible. Members and associates were asked to share their hopes, dreams, and predictions for the coal industry for 2013. Here is a sampling of what they had to say:
No relief in sight from EPA rulings without judicial assistance, the use of Presidential Executive Order is very troubling, the new EPA Administrator will be even more secretive than Ms. Jackson, environmentalists will persuade the EPA (via junk science) to rule that fly-ask is a hazardous material, and ultimately we’ll do the best we can with what we’ve got or in other words the beatings will continue until morale improves!!!
New Year’s Resolutions 20% 13%
Don’t make resolutions Make one resolution Make multiple resolutions
- Chris Cornett, GRDA
That the coal users will keeping working with the American public on the true value of the U S coal reserves and the importance of its use in today’s and tomorrow use to keep the American standards of fife on the same pace as the rest of the world in today’s markets. - Willie Yager, Consultant
Another tough year as the war against coal continues especially with the interest to export coal and the US continues to fight export terminals.
On a personal note, members and associates were asked if they made New Year’s resolutions. A full 2/3 of respondents do not. Here were some common themes on why not: •
Changes should not wait until January 1.
I set personal goals throughout the year for myself, I don’t believe in waiting for the beginning of the year to goal set.
Not necessary if you have long term goals and stick to them. The concept of New Years resolutions is a media attraction embraced by advertisers and people without long term goals.
I tend to break them.
- Bob Taylor, AEP / PRB Coal Users’ Group
Coal industry will continue contraction phase. Fewer producers, fewer assets deployed in coal business. Right sizing organizations for new and future realities. - Jim Forrester, Norfolk Southern Corp.
Continued improvement to economic health of U.S. More business opportunities in mining, utility and industrial engineering services work. Bigger and better projects.
For those that make resolutions, 78% put a positive spin on things like trying something new or achieving a goal rather than try to fix a flaw or change a behavior. Here is to a healthy 2013 in both body and spirit. Cheers! Be the Best I can Be!
- Jerry Solt, WHEELWORX, LLC
I am going to improve my eating habits and exercise more regularly.
Hoping that coal is not regulated out of business. Our power prices would skyrocket and reliability plummet.
- Richard Kotan, Omaha Public Power District
Hopes are that gas prices climb to where coal is dispatched more prediction is that it is over a year away. - Bette Whalen, Lower Colorado River Authority
- Jonathan Barr, Westmoreland Coal Sales Company
Stop eating food after 7pm!
- Trevor Pettus, Ameren Energy Fuels and Services Company
Resolved to read my Bible through in 2013 to remember there’s more going on than just what meets the eye. - Dan Gray, Entergy
Here are their predictions on the likelihood of the possible outcomes: Coal use will grow Worldwide
ou Only 38% of y icted correctly pred ore that the Baltim win Ravens would l! the Super Bow
Coal use will grow in North America CO2 regulations will be made by fiat/executive order Unemployment rate will drop Disagree Agree
A US west coast port will be approved 64 | COAL TRANSPORTER
Need one less thing to worry about?
Put a lid on it! TM
• No dust blow-off • No ballast contamination • Payload protection (wind, rain, snow, ice) • Payload anonymity • Improved aerodynamics • Potential fuel savings • Protects environment
Scan QR code for more information Or contact Dana Wallace, Sales and Marketing, United Railcar Covers, 1-260-894-4072 or danaw@RailcarCovers.com
Copyright © 2012 United Railcar Covers, afﬁliate of Structural Composites of Indiana.
Reflections / Larry Siler
“The one thing my uncle taught me was ‘that any job worth doing was worth doing well’ because if I didn’t, I had to do it over until I did it right.” - Larry Siler
arry Siler’s uncle, Ray Martin, owned a drive-in grocery store in Temple the small central Texas town where Larry was born. He hired Larry to scrub shelves clean with Ajax where the tin cans would leave grey rings. When he wasn’t playing baseball and basketball, Larry worked there before and after school and on weekends, restocking, mopping floors, and doing other jobs around the store. This continued through most of Larry’s first year of college. “The one 66 | COAL TRANSPORTER
thing my uncle taught me was ‘that any job worth doing was worth doing well’ because if I didn’t, I had to do it over until I did it right.” This lesson was taken to heart as Larry took on the major roles and challenges of his life. A fifth generation Texan, with roots dating back to the 1820’s, Larry grew up on a blackland farm. At an early age, he learned that farming is hard work. In fact, when he was 9 years old he picked 100 lbs of cotton the same day he had his appen-
Any Job Worth Doing is Worth Doing Well
Siler dix removed. The farm also produced corn and grain sorghum and was home to a small head of cattle. Larry and his younger brother Stan raised calves and sold them at auction. Like many farm kids, Larry was driving a tractor at the age of 11 and had a driverâ€™s license by the age of 14. For a small town, Temple was blessed with a fair amount of manufacturing (school desks, farm implements, plastics, etc.). With a desire to learn something technical, Larry eventually
went to work for a small foundry. He worked at the foundry for 2 years before graduating from Temple Junior College where he was a member of the Phi Theta Kappa Honor Society. At the foundry, he performed chemical and physical testing in the lab, prepared heat sheets for ductile irons and stainless steels, and poured specialty castings and hi-chrome centrifugal cast cylinder resleeves for mud pumps used in the oil industry. His enjoyment of the work led him to selecting the Materials Block for COAL TRANSPORTER | 67
his study specialty area when he went on to attend the University of Texas at Austin (UT).
The Job of an Athlete
At UT, Larry majored in Mechanical Engineering. He continued to work to pay his way through school. He washed a lot of pots and pans in the dorms and at his fraternity; worked at a bakery baking bread; and did a summer internship for Shell Pipeline Corporation. He received the first T. U. Taylor Scholarship in Engineering, a grant earmarked for an engineering student working to pay much of his own college expenses. While he worked hard at UT, he played hard as well. A member of the 1986 Astros. T - Steve is 2nd player from the left. M -Wesley is 2nd social fraternity Phi Kappa Tau, he served from the right (hands crossed). as its Vice President. He represented the fraternity in a large number of intramural sports including eleven different sports1 one year. He distinctly remembers it was eleven since he was technically limited to only playing ten. As a child he loved baseball and yearned like many boys to play in college or professionally. “I could hit any fast ball thrown at me, but I had trouble with the curve”, Larry admits. Larry was named to the all-star softball team by the UT Intramural Department. His memories of his wrestling career are not quite as fond. “I wrestled even though I had never wrestled competitively before in my life. I was a decent overall athlete, but not knowing any wrestling moves I won my 1st match by points but had to go all 3 rounds straining to the end. The next morning every muscle in my body hurt including my eye lids and I couldn’t get out of bed. Needless to say, Terry McCreery, Sarah Kamm, Larry Siler and Margaret Ruane the next guy knew what he was doing and I was pinned pretty quickly.” In addition to approaching sports The Job of a Family Man with his “any job worth doing is worth doing well” philosophy Larry was playing on three ball teams when he met his (ok, maybe we’ll give him a pass on wrestling), sports taught future wife. Nancy was from Houston and had graduated with Larry that success is achieved when everyone does their job. a degree in dietetics from the University of Houston. She had While individual effort is important, it does not define success completed an internship in Minnesota and had just moved to as a team. Temple for a job opening at the Scott & White Hospital. It was Larry played softball until he was 36, playing on teams that lunchtime and Larry wanted to eat at the Sirloin Stockade but went to numerous state qualifiers and four national tournahis friend Joe wanted to go to the diner across the street. Luckily ments. His team typically played about 120 games a year. In his Larry prevailed because that is where he met Nancy. Their first last year, he was selected to the All World Men’s Church Tournadate was to a softball game of course. ment Softball Team. He served as president to the Austin SoftLarry and Nancy were married in 1973 will be celebratball Association and was able to secure Austin its first national th ing their 40 Anniversary in March. They have two children, softball tournament that year.
Football, Softball, Basketball, Tennis, Golf, Wrestling, Volleyball, Table Tennis, Track, Bowling, and Badminton
68 | COAL TRANSPORTER
Large inventory of ready to ship materials in-stock at our Colorado Springs CO warehouse Servicing repair shops in the PRB area and throughout the United States and Canada Helpful and responsive customer service Competitive pricing We offer a number of other freight car parts, car rebody kits, work platforms and related fabrications From our new website, view our product catalogue and request a quote online
4949 Geiger Blvd. Colorado Springs, Colorado 80915
Please contact Duane LaPar at 877-791-7112 or Peter Sutcliffe at 303-494-1214 to discuss how we can help you today.
COAL TRANSPORTER | 69
Stacy and Steve who Larry claims “probably ate way too much when choosing to live in Westmont just outside Chicago. At age red baseball field dirt while playing over the years.” The kids 11 she was competing against 14 year olds and breaking their reultimately found they were way more at home in the water than cords. At age 12 she was a Illinois state freestyle champion. Busy on land. with a variety of other things, she hung up her goggles after her As his own softball career wound down, Larry turned to junior year in high school. Like his older sister, Steve also turned coaching his son’s little league team. Nineteen eighty-eight, the out to excel in the backstroke. By the age of 16, Steve was a Julast year he coached before moving the family to Chicago, was nior National Champion. At 17, he was ranked the #6 backstroa special one. “That year I had a lot of time on my hands. I had ker in the United States. He went on to swim for the University four kids that could hit and catch pretty good and that was of Pittsburgh. In November of 2000 he set the school record for about it. At best, I felt there were four teams with talent better the 200 yard backstroke, a record that still stands today. With than ours. One of my players only wanted to play golf and that kids this talented, you know how many hours Larry and Nancy was how he swung the bat and could must have spent at the pool. care less whether he played ball or not. Anyway, I took what my uncle The Job of a Fuel Manager taught me that any job worth was After UT and working two more worth doing well. So every afteryears at the foundry, Larry did a noon of the week, I held practice. brief stint as a banker at the City It wasn’t mandatory, but the kids National Bank in Austin before showed up and we would practice.” joining the Lower Colorado River His best player was a boy named Authority (LCRA) and launching Wesley who Larry strategically put at what would be a lifelong career in 2nd base since 9/10 year olds tend to the utility industry. hit to right field. After losing three After six months of construcof the first four games including “an tion inspection at LCRA for a new utter whipping like a barnyard mule gas plant, Larry was asked to lead an by the Yankees”, the extra work exploration to determine whether started to pay off. there was sufficient Texas lignite Larry describes himself as an to fuel a new coal fired plant to be observational engineer. He studied built in La Grange, Texas. He told each one of his players’ strengths his superiors, “Hey, I’m a mechanical engineer not a geologist, but I’m and weaknesses as well as each willing to do my best.” But this was team they came up against. He was not to be “wrestling, the sequel”. determined to do his best to give Using extensive study, hard work, them the tools to be successful and and preparation and by using and feel good about themselves. One of Larry and Steve: You can do it! helping others to learn (because you the things he observed here, as well can’t do it all yourself ) the project got off the ground. as when his kids swam competitively, was the kids’ energy levels Larry was there as the plant construction began, and when throughout the competition. Consulting with Nancy about the railcars were needed, he took over that effort from the person nuances of blood sugar levels, Larry began giving the kids half that kicked it off. This was just the beginning. Over his career an apple before the game and a half during the third inning to he ultimately managed the construction of over 7,000 railcars make sure that they had the energy to play. This was long before that were used to deliver over 389 million tons of coal in almost it was vogue for soccer moms to routinely tote containers full of orange wedges in their SUVs. Well, to make a long story short, 24,000 trains that generated an estimated 628 million megawatt the team won the rest of its games including a playoff with those hours of electricity. darn Yankees and won the league championship. The player He was asked to explore, to develop, acquire leases and with the golf swing learned how to swing properly and hit an purchase mining equipment for second lignite reserve.. By inside-the-park home run in the playoff game. “It was truly 1986, increased competition in the PRB spurred by the access rewarding to me to see the love and excitement for the game of to the joint line by the C&NW, led to the decision to purchase baseball that each one of the kids had by the end of the season.” sub-bituminous coal in place of mining the lignite. The mining On a sad note, four years ago Larry learned that Wesley equipment was sold with the bucket wheel excavator going to who made the final unassisted double play to beat the Yankees Caballo and the dragline ending up at Caballo Rojo. had been killed by an IED bomb blast during his third tour of It was during his time at LCRA that Larry became involved duty in Afghanistan. Larry’s passion for the kids he bonded with with the Western Coal Transportation Association (WCTA), the over baseball is never more evident than when he recalls this successor organization to the NCTA. The WCTA was then in little guy rarely seen without a bat and ball who reminded him its infancy. Utilities were building railcar fleets but some were so much of himself. a bit lost on how to keep them properly maintained. Larry and Larry was similarly deeply involved in his son and daughlike minded utility fleet managers began getting together to ter’s swimming careers. Stacy began swimming in Texas and discuss common issues. LCRA ultimately built its own railcar the quality of the local swim club was one of the considerations maintenance facility at Smithville. It is still operating today and 70 | COAL TRANSPORTER
Chicago Cubs night game was is now managed by Mike Kahanek, played. Coal supplies came from an active NCTA member and one Illinois, the Power River Basin and of Larry’s hirees during his time at the Green River Basin. Initially LCRA. his responsibilities covered coal Larry has been active in the procurement, rail transportation, NCTA over the years, attendand contract administration as Fuel ing conferences, participating in Agent and Senior Buyer. ComEd’s committee work (most recently as electric base load was supplied Spraying Effectiveness Chairman from its nuclear generation with during the ballast fouling investigaintermediate and peaking load tion), and was always a coup for provided by coal generation and any foursome in the annual Spring other sources. Much like today golf event. Larry brought his son Steve, who was then working on Larry and Nancy Siler with Reid, Siler and Winnie where coal competes with gas and renewable generation and capihis MBA, to the Spring event in circa 2010 tal expenditures to comply with Williamsburg in 2007. Following increased environmental regulatory requirements, in the late his father’s footsteps in rail transportation, Steve now serves as 1980’s ComEd’s coal generation was suppressed by high fuel a Process Development Specialist at NCTA member company, costs that drove a unit’s variable dispatch cost. As a result, units Flagship Rail Services. Larry has seen a lot of changes in the infrequently ran at minimum loads and cycled off over weekends. dustry over four decades and thinks it may have seen its heyday. By working with coal suppliers and the railroads to resource coal He believes the industry should have stayed engaged with the schools and educators concerning the benefits of low cost coal supplies to the PRB, a lower variable dispatch cost was achieved. By working with power plant operations, challenges related to generation. the different coal quality specifications required between pulverAfter LCRA, Larry spent over 24 years at Commonwealth ized and cyclone units were analyzed and addressed. The impact Edison (ComEd) and Midwest Generation working exclusively was immediate. Coal units became competitive resulting in in the fuel department to manage the coal supply for eight increased coal consumption. generating stations in northern Illinois and Indiana. His first By 1994, ComEd’s fuel staff grew and his responsibilities day at ComEd was 8/8/88. That was the same day the first ever
A PROVEN LEADER Kiewit Mining Group Inc. (KMG) is recognized as one of the top 10 coal producers in the U.S. Specializing in mine management, production, maintenance and contract mining ventures, KMG remains a technological leader in mine design and production. Currently, KMG owns and/or manages four surface coal mines nationwide and manages a phosphate operation in Southeast Idaho. KMG has also expanded mining ventures into Australia as well as into the Oil Sands region of Alberta, Canada. Kiewit Mining Group Inc. (Coal Marketing) 3555 Farnam Street | Omaha, NE 68131 | (402) 536-3645
KIEWIT.COM COAL TRANSPORTER | 71
Inset: Larry and Nancy’s two grandsons Reid and Blake (2012)
Larry with daughter Stacy and granddaughters Siler, Winnie & Zoe changed to focus on rail and barging transportation challenges. In the early 1970’s, ComEd was instrumental in helping to develop the rotary coupler used in coal unit trains, but over time ComEd had divested of its rail equipment with trains supplied by the railroads. With the change to PRB coal, ComEd became responsible for supplying trains. An initial 1453 new aluminum railcar fleet in 1993 grew to about 4500 cars by ‘98-99 (about 7 MMT in 1992 to nearly 20 mmtons of coal annually). Obviously to meet this demand, there were significant challenges related to car management, leasing, maintenance and related logistics. More system transitions and productivity improvements were made to increase use of short haul river barging and provide rail delivery capability with car dumpers at Kincaid and Will County stations in the mid 1990’s. ComEd began selling its coal generating assets initially with the sale of State Line and Kincaid generating stations in 1998. ComEd’s remaining coal assets were sold to Edison Mission Energy in late 1999 and operated as Midwest Generation. As change and adaptability in the electric industry is a “constant”, over time some older smaller units were retired and productivity enhancements were added. As Director - Fuel Transportation, Midwest became an early adopter in increasing train size from 115 to 126 to 135 cars which required plant track modifications and more operational changes. In 2003, track additions and a direct connection to UP for Joliet station were built. In 2009, Powerton station added an award winning loop track and made other rail unloading improvements. Responsibilities for management of combustion by-products reuse and disposal were also added tasks. Larry has been blessed with the opportunity to work with 72 | COAL TRANSPORTER
and mentor to many talented people over his 39 year career in the power, coal and rail industries. However, there are none more hardworking and capable and that he was proud to work with before his retirement from Midwest Generation than his most recent staff of Terry McCreery (Manager, Fuels), Margaret Ruane (Senior Fuel Specialist), Sarah Kamm (Fuel Specialist) and Sally Judycki (Logistics Coordinator).
The Job of a Retiree
Now retired, Larry is golfing more. He is also able to spend more time with his two grandsons in Illinois and his three granddaughters in Texas. Although only two and a half, his oldest grandson already owns a set of golf clubs and a train set! Larry and Nancy recently bought a second home in Round Rock, Texas so they could spend more time with Stacy’s growing family. Although they have loved their life in Chicago, you have to know that when a couple names their son Steven Austin (Siler), that Texas is in their blood. Chicago is still home though, as Nancy continues working as the Vice President of Consumer Affairs and Public Relations for Wilton Industries. Her job includes a TV show, “Bake Decorate Celebrate!”, which has been seen in 47 countries and has won several Telly Awards. Episodes of Nancy’s show are available to watch online. With a busy wife and winter too cold for much golf in Chicago, Larry has some time to take on some consulting work. He approaches that task as he did throughout his life. His uncle Ray visited the family while on a business trip in 1989 a few months before he passed away. Larry feels fortunate that he was able to tell his uncle then how much what he taught him impacted his life. His uncle was very proud. s
Energy to Power the Country®
Low sulfur, high quality, subbituminous coal... Call us. We deliver on quality, with a vision for the future.
Sales and Marketing Group Director, Sales and Marketing: Mike Kelley (720) 566-2906 Mary Lou Risley (307) 685-6130 Leslie Thorn (720) 566-2915 Bill Wallace (720) 566-2909 Mindy Watson-Ward (720) 566-2914 505 S. Gillette Ave. (82716) • PO Box 3009 • Gillette, WY 82717 • 307-687-6000 Colorado Office: 385 Interlocken Crescent, Suite 400 • Broomfield, CO 80021
The View from the Caboose
THE VIEW FROM THE CABOOSE
The humo sometime rous s serio , sometim us ra es mbl of be st frie ings nd Pete and A s nn.
By Pete Moss & Ann Thrawsite
Pete: Top of the morning to you, Ann. Thanks for this expensive coffee.
Ann: Yes, it is not good, nor constitutional, to have government by fiat.
Ann: Always glad to help out the younger generation.
Pete: Yes, I owned a Fiat many years ago.
Pete: Hey, I am not that young.
Ann: You are regressing. I give up, let’s talk about the upcoming Spring Conference.
Ann: Well, you are a bit wet behind the ears. Let’s talk about the subject for today. Do you think we are dealing with an inflection point? Pete: Aye, I do love those new gel point pens. They write so smoothly, and …….. Ann: You amaze me! You need to stop watching all those videos on trash TV and observe what is really happening in the world. Pete: Did I say something wrong? Ann: Don’t take offense, but you are just like the general populace. As long as you have your creature comforts from the government, you can ignore your loss of future opportunity. I doubt that you will ever become sub-bituminous. Pete: I give up, what is an inflection point? Ann: If we have a curve of coal production or consumption versus time on the horizontal axis and the curve changes from positive to negative - that point in time when the curve changes direction is an inflection point. It always should be noticed in economics or science. Pete: Keep going. Ann: So, when coal consumption dropped in 2010 and 2011, was that an inflection point or a mere undulation wherein we will see a return to former levels of consumption? Pete: I am catching up. The answer requires a prediction of the future, and current government policy seems to be against providing affordable, reliable energy for our citizens.
Pete: Oh yeah, I just can’t wait. The NCTA is such a great educational organization to put on a meeting centered on risk management. Ann: I didn’t know the program was going to be focused on risk management. When was that announced? I must not have gotten the memo. Pete: Not the program, lassie. We duffers have been clamoring to get back to Arizona because it really lowers the risk that we’ll get snowed on during the annual golf tournament. Ann: I walked right into that one. (major eye roll) Pete: And I love the Westin La Paloma. It has such a relaxing gracious feel to it. Once I get there, I never want to leave. The blue skies, the blue pool, the blue agave … Ann: But you should go check out the ArizonaSonora Desert Museum while you’re there and say hi to your relatives. Pete: I don’t have relatives in Tucson. It really didn’t lend itself to growing potatoes so we never settled there. Besides they have snakes and you know we Irish don’t do snakes. Yikes! Ann: Oh sorry, I thought all those things with their arms in the air were somehow related. They do have your “prickly” personality. Pete: I guess I deserved that.
Have something to say to Pete? Send comments or questions to firstname.lastname@example.org 74 | COAL TRANSPORTER
The right equipment. The right lease. The right people. Taking your coal to market efficiently and reliably requires the right equipment. First Union Rail has just what you need: superior railcars and experienced professionals who can offer leasing terms and structures that make sense for your company. Let us help move your business forward with: • Railcar operating/capital leases • High-quality, diverse fleet • Fleet management services Ready to learn more? Call today at 847-318-7575. Firstunionrail.com © 2012 Wells Fargo & Company. All rights reserved. First Union Rail Corp. is associated with Wells Fargo & Company, a company that is not regulated as a financial institution, a bank holding company or an insurance holding company in Canada. MC-4383
Decades of experience representing coal
in regulatory, contracting & legislative matters.
1054 31st St. N.W., Suite 200 • Washington, DC 20007 • (202) 342-5248
www.gkglaw.com COAL TRANSPORTER | 75
NCTA Membership List A. Stucki Company AKJ Industries Alliance Coal, LLC Alliant Energy Corporate Services Alltranstek LLC Alpha Coal Sales Co., LLC Alpha Products, Inc. Ambre Energy North America, Inc. Ameren Energy Fuels and Services American Electric Power American Railcar Industries, Inc Amsted Rail Appalachian Railcar Services, Inc. Arch Coal Sales, Inc. Arizona Electric Power Coop.,Inc. Arizona Public Service Arkansas Electric Cooperative Associated Electric Power Cooperative Associated Terminals LLC Basin Electric Power Cooperative Bosch Rexroth Corp., Pneumatics CANAC, Inc. CDG Engineers, Architects, Planners CIT Rail City Utilities of Springfield Cleco Cloud Peak Energy Colorado Springs Utilities CONSOL Energy Inc. Constellation Consumers Energy Company Cooper T. Smith CPS Energy CRMS Rail Crown Products Dairyland Power Cooperative David J. Joseph Co.
Detroit Edison Duke Energy Dynegy, Inc. Ecofab Australasia Ellcon-National, Inc. The Empire District Electric Company Energy Publishing, LLC Enserco Energy Entergy Services, Inc. Exponent, Inc. First Union Rail FirstEnergy Flagship Rail Services, LLC Florida Power & Light Company FreightCar America GATX GE Rail Global Coal Sales Global One Transport, Inc. Grand River Dam Authority Great River Energy The Greenbrier Companies Hall St. Coal Terminal Helm Financial Corp. Hendricks River Logistics Heyl & Patterson Idaho Power Company iIRX Jim Walter Resources, Inc. Kansas City Power & Light KCBX Terminals Co. Kiewit Mining Group Inc. Kinder Morgan Terminals Lexair, Inc. Locomotive Service, Inc. Lower Colorado River Authority Luminant Energy Macquarie Rail Inc.
Martin Engineering Maxeefish LLC MEAG Power Metro East Industries, Inc. MidAmerican Energy Company Midland Railway Supply Midwest Generation Midwest Industrial Supply, Inc Miner Enterprises Inc. Minnesota Power MinTech Enterprises Mitsui Rail Capital, LLC Muscatine Power and Water Nalco Company Nebraska Public Power District New York Air Brake Newmont Mining Corp Northern Indiana Public Svc Norwest Corporation NRG Energy, Inc. NV Energy OG&E Electric Services Oglethorpe Power Corp. Omaha Public Power District Otter Tail Power Company PacifiCorp Patriot Coal Corporation Peabody CoalSales Pincock Allen & Holt Platte River Power Authority Portland General Electric PPL EnergyPlus, LLC Precision Roller Bearing Co. Progress Rail Services, Corp Rail Link Railroad Financial Corporation RAS Data Services RESIDCO
Rhino Energy LLC Salt River Project Sandy Creek Energy Station Seminole Electric Cooperative, Inc. Southern Company Generation St. James Stevedoring Partners, LLC Standard Steel Strategic Rail Systems Strato, Inc. T Parker Host Taggart Global, LLC Tampa Electric Company Teck Coal Limited Tennessee Valley Authority Texas Municipal Power Agency Three Rivers Marine & Rail Terminals The Timken Company Transportation Services Inc TrinityRail Triple Point Technology Tri-State G&T Association TUCO/NexGen Coal Services Tucson Electric Power Company United Railcar Covers, LLC UtahAmerican Energy, Inc Wabtec Corporation We Energies Westar Energy Western Farmers Electric Western Fuels Association, Inc. Westmoreland Coal Sales Company WestRail Wisconsin Public Service Corporation Wood Mackenzie Xcel Energy Xcoal Energy & Resources Zinkan Enterprises, Inc.
Index to Advertisers AEP/Cook Coal Terminal. . . . . . . . . . . . . . . . . . 10 Alpha Products Inc.. . . . . . . . . . . . . . . . . . . . . 51 Ambre Energy. . . . . . . . . . . . . . . . . . . . . . 26-27 Appalachian Railcar Services, Inc.. . . . . . . . . . . 23 CANAC Railway Services Inc.. . . . . . . . . . . . . . 44 Cloud Peak Energy. . . . . . . . . . . . . . . . . . . . . . 73 CN Rail. . . . . . . . . . . . . . . . . . . . . . . . . . . 16-17 Coal Prep . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Cooper/ T. Smith . . . . . . . . . . . . . . . . . . . . . . . 13 Crown Products & Services, LLC. . . . . . . . . . . . 61 Donohue Rail. . . . . . . . . . . . . . . . . . . . . . . . . . 69 Electric Power/PRB Coal Userâ€™s Group. . . . . . . . . 5 First Union Rail. . . . . . . . . . . . . . . . . . . . . . . . 75 76 | COAL TRANSPORTER
FreightCar America . . . . . . . . . . . . . . . . . . . . IBC GKG Law, P.C.. . . . . . . . . . . . . . . . . . . . . . . . . 75 The Greenbrier Companies. . . . . . . . . . . . . . . . 25 Helm Financial Corporation. . . . . . . . . . . . . . . . 12 Kiewit Mining Group. . . . . . . . . . . . . . . . . . . . . 71 Lexair, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . IFC Macquarie Rail, Inc.. . . . . . . . . . . . . . . . . . . . . 23 Maxeefish LLC. . . . . . . . . . . . . . . . . . . . . . . . . 60 MCRL, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 MinTech Enterprises. . . . . . . . . . . . . . . . . . . OBC Mitsui Rail Capital, LLC. . . . . . . . . . . . . . . . . . . 37 NexGen Coal Services, Ltd.. . . . . . . . . . . . . . . . 49 Peabody Energy. . . . . . . . . . . . . . . . . . . . . . . . 43
Rail Link Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . 19 The Railway Educational Bureau. . . . . . . . . . . . 57 Slover & Loftus LLP. . . . . . . . . . . . . . . . . . . . . 18 St. James Stevedoring. . . . . . . . . . . . . . . . . . . 55 Strato. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Suckerpunch Creative Inc. . . . . . . . . . . . . . . . . 25 Three Rivers Marine & Rail Terminals, LP. . . . . . 12 United Rail Car Covers, LLC . . . . . . . . . . . . . . . 65 Walter Energy, Inc.. . . . . . . . . . . . . . . . . . . . . . 25 Western Fuels Association Inc.. . . . . . . . . . 38-39 Westrail, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . 69 Xcoal Energy & Resources . . . . . . . . . . . . . . . . . 7
FREIGHTCAR AMERICA: A LEADER IN RAILCAR MANUFACTURING AND SERVICES
• Railcar Manufacturing and Rebuilding • Leasing and Financing • Program Repair and Preventive Maintenance • Fleet and Maintenance Management • Replacement and Repair Parts
On the off chance you missed Appendix B of the BNSF Coal Rules and Regulations Freight Tariff document 6041-B, revision 20.
MinTopper S+0150 received BNSF approval at the lowest application rate. MinTechâ€™s MinTopper S + 0150 topper-applied dust control, soil stabilizer and erosion preventative is proud to receive BNSF recognition as an approved topper agent. Whatâ€™s more, our approval received the lowest application rate of 1.1 gallons of MinTopper S + 0150 per railcar. To learn more about putting MinTech Enterprises to work for you, call 513-582-1085, email email@example.com or visit mintechenterprises.com.