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[quote user="beaulieu"][quote user="futuremodal"] What CTL does is to transfer the burden of CO2 management from easy-to-regulate point sources to not-so-easy-to-regulate non-point sources, e.g. from one smokestack to a multitude of tailpipes.  In a power plant, all the carbon is combusted and sent up the smokestack.  In a CTL plant, most of the carbon is converted to liquid form, thus not a major source of CO2 until it is combusted in the vehicles. One cannot sequester CO2 in vehicles.  You can only try to make your vehicle more efficient in it's use of fuel.[/quote]Aha a glimmer of light, you are correct it will drive more fuel efficiency. Let me ask you this how do you think that the Feds and States collect their Gas Tax? Not at the pumps for sure, that's too hard, they collect it at the refinery or pipeline terminal. It would be similar with a Carbon Tax, it doesn't matter whether the fuel came from Oil or Coal.[/quote]I worked in petroleum retail for a few years, and yes the feds and states collect the fuel tax at the retail level.  There are a few states that have started collecting fuel taxes from the distributors in reaction to some Indian tribes that decided (with the federal courts' blessing) they no longer need to collect the state tax at tribal gas stations.[quote][quote] And despite the pollyanna-ish outlook that a CO2 tax will cause a transfer of modal choice from trucks and autos to trains, the reality is that people will continue to drive their own cars despite the added costs, and it still takes trucks to get the goods from dock to dock.  Remember?  US railroads have all but stopped serving retail outlets.  Do you really concieve of a future where railroads go back to the days of mostly carload consists?  For that matter, do you really expect a capacity constrained industry to forgo the import intermodal in deference to more TOFC?[/quote]I don't expect much more passenger traffic on the rails in say the next 20 years. Some, but not large amounts. If you believe that coal will disappear from the rails then there will be additional capacity on the rails for other items, mostly containers, TOFC is Carbon inefficient too much tare.[/quote]Let us not put so-called "carbon efficiency" ahead of overall supply chain efficiency!  The buck literally stops at the latter.TOFC is more efficient than COFC or bi-modal, if it is the one way to get trucking outfits to ship their boxes by rail.  Sure, JB Hunt and a few other outfits are big into the domestic container, but most trucking outfits prefer the dry van.  If the railroads want their business, they need to cater it in a way the customer perfers, not how the railroad beancounters prefer.That is real efficiency![quote][quote] More than likely, a demand for greater trucking efficiency will lead to more liberal GVW allowances.[/quote]That doesn't help much, more tires on the ground add to friction, it improves the tons per driver ratio, but that won't be the biggest concern. Lowering speeds will help, whether that happens depends on exactly what the speed premium is in dollars. When the speed premium gets too high the shippers will mitigate by other means.[/quote]Again, if it improves ton/mile efficiency, it does help very much.  And per my comments on real efficiency, lowering speeds will end up hurting the economy.  We live in a time sensitive economy, "just in time" is the primary driving force in the consumer market.Again, try not to think in terms of throwing the economic baby out with the carbonated bath water.[quote][quote] And of course, the most spectorial outlook for railroads from CO2 regulation is a reduction in coal hauling as the Eco Gestapo forces coal fired power plants to shut down.  And what coal is produced for CTL will come from more readily available local sources currently out of vogue due to sulfer content.  Gasification eliminates sulfer concerns, so there'd be less PRB coal and more Illinois coal used for these plants.[/quote]Actually if Europe is an example the big power companies will close a few of the least efficient plants and then buy credits, passing the cost on to their customers. [/quote]You are aware that the average European electric bill is larger than that for the American equivalent?  Again, what is gained by all these cost increases?  How is that "greater efficiency"?  It cannot be quantified on the positive side, only on the negative side.  I think most average folks equate "greater efficiency" with lower costs, yet all the examples you've put forth so far go in the opposite direction.  Eventually the average joes are gonna figure it out......[quote][quote] Coal is currently the lifeblood of the rail industry, accouting for 40% of the business and much of the higher R/VC ratio's.  Thus there is an inherent contradiction for an investor to both desire greater CO2 regulation and put much of his egg collection in the railroad basket.  The two ends do not mesh.After all is said and done, Buffett's BNI involvement is more likely to mirror his Coca Cola experience than his insurance successes.[/quote]There you go again, here are the correct percentages to the nearest whole percent based on 2006 Revenues.BNSF    20%UP        20%NS        25%CSX      25%Interesting that the Eastern Roads are more dependant on coal the the Western Roads. I don't think the Ag or Chemical shippers or UPS, share your view that coal is the most profitable for the rails. [/quote]Coal represents 21% of revenues and 44% of ton miles.  On BNSF it represents 57% of ton miles.  Your claim that intermodal can replace coal misses out on a few important points, mainly that the coal lines are removed from the main intermodal corridors.  We also have seen BNSF's investor reports - coal and ag are the biggest money makers, import intermodal the least.  Keep in mind also that with all this shift of ag products from foodstuffs to fuel there will also be a shift in total carloads, since it takes roughly 4 hoppers of corn to equal one tanker of ethanol.  As I pointed out, the grain trade is long haul, the ethanol market is mostly regional haul with the exception of those California markets.And frankly, it's only a matter of time until the fuel folks realize that higher chain alcohols make a better fuel replacement than ethanol.  Higher chain alcohols have less tendency to attract water, so it may be HCA's can move in pipelines unlike ethanol.  Once that happens, what'll the railroads do next for that high margin stuff?
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