Natural gas as locomotive fuel. Within six months BNSF Railway will be testing six high-horsepower locomotives, three each from General Electric and Caterpillar’s Electro-Motive, using liquefied natural gas. A switch from diesel fuel would cost BNSF billions of dollars up front, but could pay for itself very quickly.
Lest you think the rest of the railroad world is standing idly by, I’m here to tell you: Not! The CEO of another major Class 1 told me the other day that while stopping short of testing LNG locomotives, his railroad is extremely interested. With natural gas at $3 to $3.50 per million British thermal units (Btu), he says, “conversion is compelling.” Today, thanks in part to an unusually cold and extended winter (it’s snowing in the Midwest as I write this, in late April), the wellhead price is above $4 per million Btu. “Right now the numbers work,” this executive says. “If gas goes to $5 they still works but not quite as well.”
In any event, the conversion costs to switch fuel sources are daunting. “To convert engines,” the CEO continues, “you’ve got to buy tenders, and they are expensive. I wouldn’t be surprised if they are $1 million a copy.” And a tender to carry the super-cold gas would only fuel two or at most three locomotives.
Meanwhile, the Association of American Railroads has established a “technical advisory group” to address interoperability and safety issues. The group will review existing equipment and devise design standards for tenders, hose, piping and other tender-locomotive interface connections. It will also address safety systems for tenders, locomotives, and fuel-delivery systems.
The chair of the advisory group is Mike Iden, Union Pacific’s top locomotive honcho. UP is hip deep in LNG development studies, and more about that soon, I hope. Canadian National has been testing two SD40-2 coupled to a fuel tender in Northern Alberta since 2012. It’s fair to say every Class 1 railroad and maybe a few regional railroads are running the numbers and calling their bankers.
Is Hunter Harrison losing his grip? Reports I am hearing out of Canada suggest that Canadian Pacific’s CEO doesn’t yet have his arms around the company. Uncertainty is rampart, I am told. No one is willing to make decisions because if they do they risk having their heads cut off. “Lots of looking in the rear view mirror and frankly wasting too much time doing it,” reports one of my correspondents. “Getting directives on operational issues is nearly impossible too.”
This is not the “precision railroading” that Harrison likes to foster. Several instances I’ve heard of lately suggest you’re damned if you do something and damned if you don’t. One supervisor tells me he was criticized one day for running an extra train to clear loads out a clogged terminal, then asked the next day what he was doing to clear the clogged terminal. Duh!
Another report is that a general manager and superintendent in Toronto were sacked. Why? My sources say a very senior official told them to "do whatever it takes" to get the dwell time down in Toronto, the dwell time being the average time cars spend in designated terminals. It is a number that securities analysts closely watch. So a supervisor strung together a big line of unclassified cars to make a train and parked it somewhere else. For doing "whatever it takes," they were fired. Agreed, it was a poor solution, maybe a dumb one, like applying a band-aid to a big cut. But tasked with doing something, anything, they did. What's so bad about that? Asked to confirm or deny this happened, CP spokesman Ed Greenberg replied, "At this time, there is no comment."
You can’t kill coal. One of the largest electrical utilities in the U.S., American Electric Power, said last week that with natural gas prices now above $4 per million Btu, it will noticeably increase its use of coal during 2013. Last year, AEP’s fuel source was 61 percent coal, 24 percent gas, 9 percent renewable, and 6 nuclear. At current gas prices, AEP can produce power for 3.1-3.2 cents per kilowatt hour, whereas coal does the job for 2.5 cents (for Power River Basin coal) to 3.5 cents (central Appalachian coal). As AEP explains it, if natural gas continues to exceed $4 in price, AEP will increase its coal burn 18 percent in 2013, the gain being mostly from Wyoming and Montana coal.
Meanwhile, I’m told by a railroad executive in the Midwest that Illinois Basin coal, found in that state and Indiana, remains competitive with natural gas when gas is above $3-$3.50 per million Btu level.
Today’s Wall Street Journal reports that investment funds that trade natural gas futures are being murdered by the unexpected rise in gas prices, attributed to winter weather. If these experts can’t predict the pricing of natural gas, I cannot, either. But it may be that predictions of coal’s demise (some of them coming from me) are a tad premature.
This is for Seaboarddawg. I’ve bragged in my blogs of being able to ride Amtrak’s Auto Train and all but guarantee that my car is one of the first ones unloaded. The trick to this, I explained recently, is simple: Wait to turn your car in for loading until just one five-car cut of automobile carriers remains. That insures your car is aboard one of the last five automobile carriers on the train, and the last cut of cars is automatically positioned to be first to be spotted in both Lorton, Va., and Sanford, Fla.
The other day, traveling on the Auto Train to Florida, I thought I had hit the jackpot. My car ended up at the very end of the last auto carrier, on the top level. And the folks at Sanford always unload the top level first. I texted my friends of my triumph.
The next morning, in Sanford, here come the auto carriers being backed to the ramps, and the first group of five rail cars to be spotted is not the one containing my auto. At Lorton or Sanford, a little switching took place before the railcars were spotted. Rather than being first off, my car was the 101st off.
Seaboarddawg, I got my comeuppance. Starting April 29, my system may fail totally. That when Amtrak begins to offer priority offboarding to its Auto Train customers. For $50, your car can be one of the first 20 to be unloaded. I’ll keep trying and let you know.
Hard times for locomotive makers. Back to the subject of fuel, these are not the best times for U.S. locomotive builders. Both GE and EMD are scrambling to cut costs. EMD, as you know, closed its unionized assembly plant in Canada a year ago in favor of a nonunion plant in Muncie, Ind. GE is shifting some of its locomotive production from Erie, Pa., to Fort Worth, and Texas is a right-to-work state. And some of EMD’s orders, for example, 100 SD70AC bruisers for BNSF, are being assembled at a Bombardier plant in Mexico. EMD has shifted its Australian locomotive production to India, and GE is moving its southeast Asian services to Indonesia.
It’s bad enough that falling coal production here at home partially accounts for 10 percent of the American locomotive fleet being in storage. Hovering over both companies are extremely stringent U.S. Tier 4 emission standards for new or substantially rebuilt locomotives that go into effect at the end of 2015.
Both builders have let it be known to customers that they can produce Tier 4-complaint locomotives on schedule. But doing so, they have hinted, will vastly increase the complexity of the beasts and due to that, the cost. And speaking of complexity, the least-costly solution to Tier 4 appears to be applying a treatment to the exhaust gases. A urea-based spray would combine with the gases to render harmless the undesired emissions. And that gets railroads into having to provide urea tanks at their refueling stations—yet another cost and bother of doing business.
This leads me to wonder whether the intense interest by railroads in switching to natural gas as a locomotive fuel is driven in part by the specter of Tier 4. Gas is far cleaner than diesel fuel. Perhaps natural gas would satisfy Tier 4 standards with little or no tinkering with existing locomotive engines. And if it does, will we ever see a Tier 4 diesel locomotive manufactured in this country in our lifetimes, post 2015? Worth thinking about. — Fred W. Frailey
Our community is FREE to join. To participate you must either login or register for an account.