• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 6 minutes UAE says four vessels subjected to 'sabotage' near Fujairah port
  • 9 minutes Why is Strait of Hormuz the World's Most Important Oil Artery
  • 13 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 24 mins California's Oil Industry Collapses Despite Shale Boom
  • 2 hours Knock-Knock: Aircraft Carrier Seen As Barometer Of Tensions With Iran
  • 6 hours The Consequences: Full-Blown Trade War Will Push World Towards Recession
  • 6 hours IMO2020 To scrub or not to scrub
  • 1 hour UK Needs New Wind Turbines
  • 19 mins Will Canada drop Liberals, vote in Conservatives?
  • 7 hours Did Saudi Arabia pull a "Jussie Smollett" and fake an attack on themselves to justify indiscriminate bombing on Yemen city population ?
  • 4 hours Shale to be profitable in 2019!!!
  • 3 hours Australian Voters Reject 'Climate Change' Politicians
  • 10 hours California Threatens Ban on ICE Cars
  • 2 hours methanol fuel cells
  • 10 hours Global Warming Making The Rich Richer
  • 3 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 3 hours Wonders of Shale- Gas,bringing investments and jobs to the US
  • 7 hours 6 Ways to Fight Climate Change
Alt Text

Russia Hints At OPEC+ Deal Exit

Russian policymakers have shown themselves…

Alt Text

Bearish EIA Report Keeps Oil Prices Down

Oil prices got a bearish…

Alt Text

The 2 Energy Giants Reshaping The Middle East

Typical crude oil producers such…

MINING.com

MINING.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

More Info

Trending Discussions

Summer Coal Demand Straining U.S. Railways

US coal producers face the paradox of experiencing an increased demand for their product at times when they lack the means to deliver it to their customers, reveals the latest study published Wednesday by UK-based consultancy Wood Mackenzie.

In its reports Can railroads meet summer US coal demand? the firm says on top of the issue of having stockpiles almost depleted during the past harsh winter in North America, coal companies are now dealing with a rail network unable to increase the rate of deliveries much beyond 2013 levels. This, add the experts, means there is a high probability coal-producing units relying on western coal will not be able to ramp up output despite higher demand.

Data from the US Energy Information Administration seem to confirm the analysts’ dire predictions. Coal inventories in February were down 32% compared to the previous year, while spot prices were up.

US Coal Production 

But rail congestion prevented producers from capitalizing on those conditions. The capacity crunch was the result of a perfect storm, in a literal sense and a figurative one. Winter weather delayed shipments from US producers, generating a backlog of orders. And demand for rail cars rose, prompted by a shorter grain harvest and rising domestic oil production.

Related Article: Latest Oil Train Derailment Adds Pressure For Stronger U.S. Action

US Total Monthly Coal Production, Jan 2012 - Apr 2014 

"Even if the railroad capacity problem is fixed, mine capacity may not be able to grow fast enough to meet demand," said in a statement Matt Preston, principal analyst, North America thermal coal markets for Wood Mackenzie.

The experts expect tighter gas markets to place upward pressure on gas prices, further increasing the appetite for coal this summer, even as western coal supplies remain limited.

Low stock piles, constrained rail deliveries, and lower production levels are having the strongest influence on coal demand from units relying on coal from the Powder River Basin (PRB), says the consultancy.

The problems were particularly acute for mines along the Burlington Northern Santa Fe's northern route out of the Powder River Basin. Additional shipments to and from the Bakken in North Dakota, where oil production is booming, contributed to traffic increase.

By Cecilia Jamasmie




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News