New data from the federal government shows the amount of coal transported by rail has declined sharply this year: its’s at the lowest level since 1994. That’s partly due to low natural gas prices, increased regulations and an unseasonably warm winter, but atypical export conditions kept the data from being much worse.
About 70 percent of coal produced in America is transported by rail. Most of the rest goes by truck—usually just short distances—or by barge. That’s still the case, but the new data about coal transport is a sign that domestic coal use has been on the decline this year.
That comes at a time when coal exports are on the rise. And coal is usually transported to ports via rail. Energy Information Administration analyst William Watson says the rise in exports may have helped staunch the decline in rail-transported coal.
“I guess the answer is yes,” he said. “If we didn’t have this, there would even be a more dramatic impact on railroads but there would also be a dramatic impact on coal mining companies.”
Most of the country’s coal is exported from ports like Norfolk, New Orleans, Mobile, and Vancouver, British Columbia. And talks are underway to build another west coast port in Oregon. But Watson says the coal industry can’t count on exports staying that strong forever.
“The United States is among the countries that provide coal to the export market,” he said. “It tends to be the supplier of last resort because our coal has a high cost compared to other countries.”
Unexpected weather conditions in countries like Australia and Colombia have meant that there’s a sudden demand for American coal. But Williams says when the coal industries abroad recover, U.S. coal exports—and by extension the U.S. coal industry—will suffer.