Originally posted by chad thomas [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Thursday, April 7, 2005 10:08 AM Thanks spbed. Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Thursday, April 7, 2005 10:17 AM Your welcome [:p][:o)][:D] Originally posted by chad thomas [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Thursday, April 7, 2005 3:21 PM What about carloads ? Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Thursday, April 7, 2005 3:57 PM Carload pricing is all very much on a per carload, per commodity by route basis except in areas such as agricultural commodities that remain subject to tariff. Much of the freight moving moves under contracts which are periodically renegotiated so prices can vary significantly depending upon route and number of carloads. Also, fuel surcharges of 15%+ are in place and there are incentives for certain commodities (coal and grain primarily) moving in unit trains. Contract prices are generally confidential so the average person can't look them up. Many of the larger RRs are moving to public pricing which is more like a public tariff that is available on their websites. BNSF is perhaps the most advanced in this area. You might want to check their website for price information that will at least give you an idea of typical pricing. www.bnsf.com/prices.html is a place to start. LC Reply Edit kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Thursday, April 7, 2005 4:50 PM right now - >20$/ton for coal from the PRB to our plant - we are captive Kevin Arceneaux Mining Engineer, Penn State 1979 Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Thursday, April 7, 2005 7:05 PM LC, Thanks I'll check it out when I get a chance. kevarc, OK, so a carload is what 100 tons. That comes to $2000. And that's traveling PRB to La., Thats what 1300 miles ? So a 100 car unit train would cost $200,000 to move. That's a lot of money. I never really thought about it. I would have figured 40-50 thousand for a 2000 mile move tops. Interesting. Thanks guys. Reply Hugh Jampton Member sinceSeptember 2003 From: Southern Region now, UK 820 posts Posted by Hugh Jampton on Thursday, April 7, 2005 7:38 PM but somewhere along the line you have to cover the cost of getting the empties back to the mine. Generally a lurker by natureBe AlertThe world needs more lerts.It's the 3rd rail that makes the difference. Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Thursday, April 7, 2005 7:51 PM QUOTE: Originally posted by kevarc right now - >20$/ton for coal from the PRB to our plant - we are captive kevarc, What is the delivered price for your PRB coal $/mmBtu? Do you guys get the higher grade stuff (9800 btu/lb) from Wyoming, or the lower grade stuff from Montana? Are you only captive at the receiving end, or also at the mine? Are there any other power plants in your region who have competitive rail access, and if so what is their comparitive delivery price? Reply Edit bobwilcox Member sinceDecember 2001 From: Crozet, VA 1,049 posts Posted by bobwilcox on Friday, April 8, 2005 5:53 AM QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. Bob Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 6:23 AM How many miles is that from the PRB? [:o)][8D][:D] QUOTE: Originally posted by kevarc right now - >20$/ton for coal from the PRB to our plant - we are captive Living nearby to MP 186 of the UPRR Austin TX Sub Reply Hugh Jampton Member sinceSeptember 2003 From: Southern Region now, UK 820 posts Posted by Hugh Jampton on Friday, April 8, 2005 6:29 AM QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. exactly,, which means the rate is higher than what it would be if backloads were possible. Generally a lurker by natureBe AlertThe world needs more lerts.It's the 3rd rail that makes the difference. Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 6:29 AM According to Mapquest it is 1.158 miles Bill WY to LAX Actually per ton that is rather cheap transport per ton Take the intermodal rate from NYC to LAX presume there is 20 Ts inside the trailer that equates to $110.00 per ton! [:o)][8D][:D] Originally posted by chad thomas Living nearby to MP 186 of the UPRR Austin TX Sub Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 6:31 AM Yes see the scrap iron thread for a example. [:o)][:D][:p] Originally posted by Hugh Jampton Originally posted by bobwilcox Originally posted by Hugh Jampton [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 8:33 AM Bob Wilcox: Was that you referenced in Mark Hemphills excellent article on Southern Pacific? I always have enjoyed your economic views on the industry. Thanks for all your help. ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 8:58 AM Wyoming coal. And I cannot give you the price - Confidential, etc, but the coal price is less than the transportation cost. The going rate for coal is 15-18 mils/ton-mile A couple of notes - we own our own cars so while we do not have to pay the extra money if we used leased or RR cars, we still have all teh expenses of owning the cars. ONe way it is about 1400 miles. We are captive at the plant end, it is 15 miles from an interchange point but the RR will not quote us a rate from there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:09 AM OK if I understand correct you are saying that the cost for the transport of coal in what I will term shipper owned cars is 15/18 per ton per mile. That is rather very interesting since if you compare that with very high valued freight moving in intermodal service also costs $15/20 per ton per mile. I presume by the way you wrote your post that if you use RR oowned cars that your cost go up making the ton per mile cost go up. Is that correct? In the shipper owned cars who maintains them to RR standards you or the RRs & do the RRs then charge you for maintance? [:o)][8D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 9:21 AM We have our own maintenence shop at the plant. It is certified by the FRA and must meet the standards for interchange. But if the car gets bad ordered on the road, it has to be repaired there. This is covered under the contract and under ARR standards. Yes, using leased or RR owned cars, you pay a higher price. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:31 AM Thanks sounds like sought of a bad deal. What really suprised me is that coal & widgets pay more/less the same ton per mile rate. [:o)][:D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply bobwilcox Member sinceDecember 2001 From: Crozet, VA 1,049 posts Posted by bobwilcox on Friday, April 8, 2005 9:39 AM QUOTE: Originally posted by Hugh Jampton QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. exactly,, which means the rate is higher than what it would be if backloads were possible. Hugh-The rate is based on the demand for the service. The cost only comes into play in that the rr will not be willing to provide the service if it is below the cost of providing the service. The markup over cost on products with a significant move by rail vary between 1% and about 150%. Ed-It is I. Bob Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 9:53 AM Thanks for the info guys. What is the car hire rate ? And Kevarc, What is the cycle time of your train (Cars) ? Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 10:17 AM Off hand I don't know the cycle time. And note - there are 5 trainsets - we own 3 trainsets with one of our partners and the 3rd own 2 of their own. I'll try to find out - but on the average we get 5-6 trains a week at the plant. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 10:50 AM Kevin: I see you are an engineer...perhaps you can answer this. It might have been addressed before, but here goes. You are paying about $225,000 per trainload of coal. That is about $1,125,000 per week (five loads). Is it feasible to produce the electricity at the mine (Wyoming) and transport the electricity to final use? My guess is that it can be done. But can it be done economically? Is there a loss of electricity during transit? Or would the cost of building and maintaining a grid be cost prohibitive? thjanks ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 11:24 AM Not really, the cost of building the transmission would be unreal. And you have the loses. So this is really a non-starter as far as we are concerned. Plus with the new RTO rules coming from the FERC would make this a riskier proposition than normal. Off hand I can't recall the costs, but they are really high for the addition of a new link from the Pac Northwest to SoCal to relieve pressure on the exiting transmission. The LADWP just upgraded the Sylmar Converter Station for a $180 million. This is just to upgrade a station, figure in what it would cost to build all this from scratch. You would get a very scary number. Not only would you be trying to get a plant permitted, but you would be fighting every NIMBY between here and there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 8:36 PM Kevarc, How many watt hours does a coal train produce. (Megawatt,Gigawatt whatever) Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:08 AM That depends on the plant and the type of coal. It is really all over the place, it just depends on the plants heat rate. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, April 9, 2005 12:32 PM kevarc, Confidentiality granted, I think you've answered most of the question regarding price. You affirm that the cost of transporting the coal is higher than the mine price of the coal ($/ton). My own previous research on Northern PRB coals had mine prices in the $5 - $10 per ton range back in the late 1990's. For 8800 btu/lb coal at $10/ton, that comes out to about $0.57/mmBtu. If you're paying $20/ton for the haul, the delivered price of your coal on a $/mmBtu basis is about $1.70/mmBtu, of which $1.14/mmBtu is for transportation. Depending on your plant type and the assuming your process costs are about $1.25/mmBtu for an older pulverized coal plant, that means the transportation costs are about equal to the process costs. In transportation economics, there is a theory of cost wherein if your transportation costs are more than the cost of the commodity at the point of origin, the tendency wil be for moving process costs closer to the point of origin so that you have an increasing value added price component of your commodity to justify the increase in transporation costs. Since in your case the cost of transportation may be double the commodity price at the point of origin, and nearly equal to the process costs, the theory would suggest that your rent collectors would be looking toward locating future processing plants closer to the point of origin of the commodity. As you have stated, it depends on the capacity of the transmission system to determine the viability of essentially replacing rail transportation with "coal by wire". I do know that the major utility in the inland PNW is moving forward with transmission line upgrades to allow greater access to power generated mineside in Montana and Wyoming rather than constructing it's own coal generation plant here in the inland PNW, so in their minds the cost of upgrading transmission is less than the costs of building a coal plant here and transporting it in by rail. Apparently, their board of directors were more convinced by the prevailing negatives regarding the ever increasing costs of rail transportation (most of which is predicated on the stories in the energy press of the laments of captive coal plant operators), rather than taking a more sophisticated study of locating such a plant in an area with competitive rail access (on both ends) and using that for the cost comparison. Of course, for electricity, only the primary intermediate commodity can be moved by rail, while the final output product can only move by wire, so the point may be moot for you guys. But if you consider the technology for converting coal into a liquid fuel, the theory is more applicable that such plants would be located mineside or within major coal producing districts, and the output product would more likely move via pipeline rather than rail. Combine that with the new acceptance of using nuclear power rather than coal, and it would seem the railroads have not done themselves any favors with this abuse of differential pricing. Future energy plant construction managers will put a heavy emphasis on the current practices of the rail industry in deciding where and what form these plants will take. If the railroads are successful in pricing the cost of captive coal-based energy beyond the costs for the alternatives, they will have themselves to blame for a future energy industry that tended away from the scenario that would benefit them in the long run, and instead toward a scenario in which rail is more irrelevant and/or less impactful on the final cost of that energy. Reply Edit kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:17 PM No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Sunday, April 10, 2005 1:30 PM QUOTE: Originally posted by kevarc No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. That's true, and it reflects on the poor job the media has done of covering energy issues. The PNW is pretty much condemned to having our non-hydorpower energy needs being filled by either natural gas fired plants, or importing electricity at market rates. Either way, the energy planners from the PNW have almost eliminated the one main advantage of locating a manufacturing plant here, namely cheap electric rates. Of course, the hydro system is played out as far as future expansion, but if our energy planners had any sense, they would have pushed for new coal fired plants built within the region as the adjunct to the hydro system, since coal is the next lowest cost form of electricity generation. Thus, they could have continued having the lowest cost energy to market to manufacturers, instead of losing that advantage to the South and MIdwest. With natural gas now costing $6.00/mmBtu or more, even new power plants fueled by the more expensive clean coal technologies would have been preferable to natural gas plants, market priced imported energy, or having to deal with the recessionary pressures of mandated conservation measures. Even most enviro types will publicly acknowledge that such technologies are not all that objectionable, and probably such clean coal projects could have passed muster for approval here in the PNW. But as I mentioned previously, the railroads have a bad reputation in the energy press for gouging coal customers, and that perception played a significant part in the opting for coal alternatives. Reply Edit 12 Join our Community! Our community is FREE to join. To participate you must either login or register for an account. 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Living nearby to MP 186 of the UPRR Austin TX Sub
Originally posted by chad thomas [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Thursday, April 7, 2005 3:21 PM What about carloads ? Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Thursday, April 7, 2005 3:57 PM Carload pricing is all very much on a per carload, per commodity by route basis except in areas such as agricultural commodities that remain subject to tariff. Much of the freight moving moves under contracts which are periodically renegotiated so prices can vary significantly depending upon route and number of carloads. Also, fuel surcharges of 15%+ are in place and there are incentives for certain commodities (coal and grain primarily) moving in unit trains. Contract prices are generally confidential so the average person can't look them up. Many of the larger RRs are moving to public pricing which is more like a public tariff that is available on their websites. BNSF is perhaps the most advanced in this area. You might want to check their website for price information that will at least give you an idea of typical pricing. www.bnsf.com/prices.html is a place to start. LC Reply Edit kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Thursday, April 7, 2005 4:50 PM right now - >20$/ton for coal from the PRB to our plant - we are captive Kevin Arceneaux Mining Engineer, Penn State 1979 Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Thursday, April 7, 2005 7:05 PM LC, Thanks I'll check it out when I get a chance. kevarc, OK, so a carload is what 100 tons. That comes to $2000. And that's traveling PRB to La., Thats what 1300 miles ? So a 100 car unit train would cost $200,000 to move. That's a lot of money. I never really thought about it. I would have figured 40-50 thousand for a 2000 mile move tops. Interesting. Thanks guys. Reply Hugh Jampton Member sinceSeptember 2003 From: Southern Region now, UK 820 posts Posted by Hugh Jampton on Thursday, April 7, 2005 7:38 PM but somewhere along the line you have to cover the cost of getting the empties back to the mine. Generally a lurker by natureBe AlertThe world needs more lerts.It's the 3rd rail that makes the difference. Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Thursday, April 7, 2005 7:51 PM QUOTE: Originally posted by kevarc right now - >20$/ton for coal from the PRB to our plant - we are captive kevarc, What is the delivered price for your PRB coal $/mmBtu? Do you guys get the higher grade stuff (9800 btu/lb) from Wyoming, or the lower grade stuff from Montana? Are you only captive at the receiving end, or also at the mine? Are there any other power plants in your region who have competitive rail access, and if so what is their comparitive delivery price? Reply Edit bobwilcox Member sinceDecember 2001 From: Crozet, VA 1,049 posts Posted by bobwilcox on Friday, April 8, 2005 5:53 AM QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. Bob Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 6:23 AM How many miles is that from the PRB? [:o)][8D][:D] QUOTE: Originally posted by kevarc right now - >20$/ton for coal from the PRB to our plant - we are captive Living nearby to MP 186 of the UPRR Austin TX Sub Reply Hugh Jampton Member sinceSeptember 2003 From: Southern Region now, UK 820 posts Posted by Hugh Jampton on Friday, April 8, 2005 6:29 AM QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. exactly,, which means the rate is higher than what it would be if backloads were possible. Generally a lurker by natureBe AlertThe world needs more lerts.It's the 3rd rail that makes the difference. Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 6:29 AM According to Mapquest it is 1.158 miles Bill WY to LAX Actually per ton that is rather cheap transport per ton Take the intermodal rate from NYC to LAX presume there is 20 Ts inside the trailer that equates to $110.00 per ton! [:o)][8D][:D] Originally posted by chad thomas Living nearby to MP 186 of the UPRR Austin TX Sub Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 6:31 AM Yes see the scrap iron thread for a example. [:o)][:D][:p] Originally posted by Hugh Jampton Originally posted by bobwilcox Originally posted by Hugh Jampton [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 8:33 AM Bob Wilcox: Was that you referenced in Mark Hemphills excellent article on Southern Pacific? I always have enjoyed your economic views on the industry. Thanks for all your help. ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 8:58 AM Wyoming coal. And I cannot give you the price - Confidential, etc, but the coal price is less than the transportation cost. The going rate for coal is 15-18 mils/ton-mile A couple of notes - we own our own cars so while we do not have to pay the extra money if we used leased or RR cars, we still have all teh expenses of owning the cars. ONe way it is about 1400 miles. We are captive at the plant end, it is 15 miles from an interchange point but the RR will not quote us a rate from there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:09 AM OK if I understand correct you are saying that the cost for the transport of coal in what I will term shipper owned cars is 15/18 per ton per mile. That is rather very interesting since if you compare that with very high valued freight moving in intermodal service also costs $15/20 per ton per mile. I presume by the way you wrote your post that if you use RR oowned cars that your cost go up making the ton per mile cost go up. Is that correct? In the shipper owned cars who maintains them to RR standards you or the RRs & do the RRs then charge you for maintance? [:o)][8D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 9:21 AM We have our own maintenence shop at the plant. It is certified by the FRA and must meet the standards for interchange. But if the car gets bad ordered on the road, it has to be repaired there. This is covered under the contract and under ARR standards. Yes, using leased or RR owned cars, you pay a higher price. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:31 AM Thanks sounds like sought of a bad deal. What really suprised me is that coal & widgets pay more/less the same ton per mile rate. [:o)][:D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply bobwilcox Member sinceDecember 2001 From: Crozet, VA 1,049 posts Posted by bobwilcox on Friday, April 8, 2005 9:39 AM QUOTE: Originally posted by Hugh Jampton QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. exactly,, which means the rate is higher than what it would be if backloads were possible. Hugh-The rate is based on the demand for the service. The cost only comes into play in that the rr will not be willing to provide the service if it is below the cost of providing the service. The markup over cost on products with a significant move by rail vary between 1% and about 150%. Ed-It is I. Bob Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 9:53 AM Thanks for the info guys. What is the car hire rate ? And Kevarc, What is the cycle time of your train (Cars) ? Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 10:17 AM Off hand I don't know the cycle time. And note - there are 5 trainsets - we own 3 trainsets with one of our partners and the 3rd own 2 of their own. I'll try to find out - but on the average we get 5-6 trains a week at the plant. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 10:50 AM Kevin: I see you are an engineer...perhaps you can answer this. It might have been addressed before, but here goes. You are paying about $225,000 per trainload of coal. That is about $1,125,000 per week (five loads). Is it feasible to produce the electricity at the mine (Wyoming) and transport the electricity to final use? My guess is that it can be done. But can it be done economically? Is there a loss of electricity during transit? Or would the cost of building and maintaining a grid be cost prohibitive? thjanks ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 11:24 AM Not really, the cost of building the transmission would be unreal. And you have the loses. So this is really a non-starter as far as we are concerned. Plus with the new RTO rules coming from the FERC would make this a riskier proposition than normal. Off hand I can't recall the costs, but they are really high for the addition of a new link from the Pac Northwest to SoCal to relieve pressure on the exiting transmission. The LADWP just upgraded the Sylmar Converter Station for a $180 million. This is just to upgrade a station, figure in what it would cost to build all this from scratch. You would get a very scary number. Not only would you be trying to get a plant permitted, but you would be fighting every NIMBY between here and there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 8:36 PM Kevarc, How many watt hours does a coal train produce. (Megawatt,Gigawatt whatever) Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:08 AM That depends on the plant and the type of coal. It is really all over the place, it just depends on the plants heat rate. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, April 9, 2005 12:32 PM kevarc, Confidentiality granted, I think you've answered most of the question regarding price. You affirm that the cost of transporting the coal is higher than the mine price of the coal ($/ton). My own previous research on Northern PRB coals had mine prices in the $5 - $10 per ton range back in the late 1990's. For 8800 btu/lb coal at $10/ton, that comes out to about $0.57/mmBtu. If you're paying $20/ton for the haul, the delivered price of your coal on a $/mmBtu basis is about $1.70/mmBtu, of which $1.14/mmBtu is for transportation. Depending on your plant type and the assuming your process costs are about $1.25/mmBtu for an older pulverized coal plant, that means the transportation costs are about equal to the process costs. In transportation economics, there is a theory of cost wherein if your transportation costs are more than the cost of the commodity at the point of origin, the tendency wil be for moving process costs closer to the point of origin so that you have an increasing value added price component of your commodity to justify the increase in transporation costs. Since in your case the cost of transportation may be double the commodity price at the point of origin, and nearly equal to the process costs, the theory would suggest that your rent collectors would be looking toward locating future processing plants closer to the point of origin of the commodity. As you have stated, it depends on the capacity of the transmission system to determine the viability of essentially replacing rail transportation with "coal by wire". I do know that the major utility in the inland PNW is moving forward with transmission line upgrades to allow greater access to power generated mineside in Montana and Wyoming rather than constructing it's own coal generation plant here in the inland PNW, so in their minds the cost of upgrading transmission is less than the costs of building a coal plant here and transporting it in by rail. Apparently, their board of directors were more convinced by the prevailing negatives regarding the ever increasing costs of rail transportation (most of which is predicated on the stories in the energy press of the laments of captive coal plant operators), rather than taking a more sophisticated study of locating such a plant in an area with competitive rail access (on both ends) and using that for the cost comparison. Of course, for electricity, only the primary intermediate commodity can be moved by rail, while the final output product can only move by wire, so the point may be moot for you guys. But if you consider the technology for converting coal into a liquid fuel, the theory is more applicable that such plants would be located mineside or within major coal producing districts, and the output product would more likely move via pipeline rather than rail. Combine that with the new acceptance of using nuclear power rather than coal, and it would seem the railroads have not done themselves any favors with this abuse of differential pricing. Future energy plant construction managers will put a heavy emphasis on the current practices of the rail industry in deciding where and what form these plants will take. If the railroads are successful in pricing the cost of captive coal-based energy beyond the costs for the alternatives, they will have themselves to blame for a future energy industry that tended away from the scenario that would benefit them in the long run, and instead toward a scenario in which rail is more irrelevant and/or less impactful on the final cost of that energy. Reply Edit kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:17 PM No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Sunday, April 10, 2005 1:30 PM QUOTE: Originally posted by kevarc No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. That's true, and it reflects on the poor job the media has done of covering energy issues. The PNW is pretty much condemned to having our non-hydorpower energy needs being filled by either natural gas fired plants, or importing electricity at market rates. Either way, the energy planners from the PNW have almost eliminated the one main advantage of locating a manufacturing plant here, namely cheap electric rates. Of course, the hydro system is played out as far as future expansion, but if our energy planners had any sense, they would have pushed for new coal fired plants built within the region as the adjunct to the hydro system, since coal is the next lowest cost form of electricity generation. Thus, they could have continued having the lowest cost energy to market to manufacturers, instead of losing that advantage to the South and MIdwest. With natural gas now costing $6.00/mmBtu or more, even new power plants fueled by the more expensive clean coal technologies would have been preferable to natural gas plants, market priced imported energy, or having to deal with the recessionary pressures of mandated conservation measures. Even most enviro types will publicly acknowledge that such technologies are not all that objectionable, and probably such clean coal projects could have passed muster for approval here in the PNW. But as I mentioned previously, the railroads have a bad reputation in the energy press for gouging coal customers, and that perception played a significant part in the opting for coal alternatives. Reply Edit 12 Join our Community! Our community is FREE to join. To participate you must either login or register for an account. Login » Register » Search the Community Newsletter Sign-Up By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our privacy policy More great sites from Kalmbach Media Terms Of Use | Privacy Policy | Copyright Policy
QUOTE: Originally posted by kevarc right now - >20$/ton for coal from the PRB to our plant - we are captive
QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine.
QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate.
Originally posted by chad thomas Living nearby to MP 186 of the UPRR Austin TX Sub Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 6:31 AM Yes see the scrap iron thread for a example. [:o)][:D][:p] Originally posted by Hugh Jampton Originally posted by bobwilcox Originally posted by Hugh Jampton [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 8:33 AM Bob Wilcox: Was that you referenced in Mark Hemphills excellent article on Southern Pacific? I always have enjoyed your economic views on the industry. Thanks for all your help. ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 8:58 AM Wyoming coal. And I cannot give you the price - Confidential, etc, but the coal price is less than the transportation cost. The going rate for coal is 15-18 mils/ton-mile A couple of notes - we own our own cars so while we do not have to pay the extra money if we used leased or RR cars, we still have all teh expenses of owning the cars. ONe way it is about 1400 miles. We are captive at the plant end, it is 15 miles from an interchange point but the RR will not quote us a rate from there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:09 AM OK if I understand correct you are saying that the cost for the transport of coal in what I will term shipper owned cars is 15/18 per ton per mile. That is rather very interesting since if you compare that with very high valued freight moving in intermodal service also costs $15/20 per ton per mile. I presume by the way you wrote your post that if you use RR oowned cars that your cost go up making the ton per mile cost go up. Is that correct? In the shipper owned cars who maintains them to RR standards you or the RRs & do the RRs then charge you for maintance? [:o)][8D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 9:21 AM We have our own maintenence shop at the plant. It is certified by the FRA and must meet the standards for interchange. But if the car gets bad ordered on the road, it has to be repaired there. This is covered under the contract and under ARR standards. Yes, using leased or RR owned cars, you pay a higher price. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:31 AM Thanks sounds like sought of a bad deal. What really suprised me is that coal & widgets pay more/less the same ton per mile rate. [:o)][:D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply bobwilcox Member sinceDecember 2001 From: Crozet, VA 1,049 posts Posted by bobwilcox on Friday, April 8, 2005 9:39 AM QUOTE: Originally posted by Hugh Jampton QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. exactly,, which means the rate is higher than what it would be if backloads were possible. Hugh-The rate is based on the demand for the service. The cost only comes into play in that the rr will not be willing to provide the service if it is below the cost of providing the service. The markup over cost on products with a significant move by rail vary between 1% and about 150%. Ed-It is I. Bob Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 9:53 AM Thanks for the info guys. What is the car hire rate ? And Kevarc, What is the cycle time of your train (Cars) ? Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 10:17 AM Off hand I don't know the cycle time. And note - there are 5 trainsets - we own 3 trainsets with one of our partners and the 3rd own 2 of their own. I'll try to find out - but on the average we get 5-6 trains a week at the plant. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 10:50 AM Kevin: I see you are an engineer...perhaps you can answer this. It might have been addressed before, but here goes. You are paying about $225,000 per trainload of coal. That is about $1,125,000 per week (five loads). Is it feasible to produce the electricity at the mine (Wyoming) and transport the electricity to final use? My guess is that it can be done. But can it be done economically? Is there a loss of electricity during transit? Or would the cost of building and maintaining a grid be cost prohibitive? thjanks ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 11:24 AM Not really, the cost of building the transmission would be unreal. And you have the loses. So this is really a non-starter as far as we are concerned. Plus with the new RTO rules coming from the FERC would make this a riskier proposition than normal. Off hand I can't recall the costs, but they are really high for the addition of a new link from the Pac Northwest to SoCal to relieve pressure on the exiting transmission. The LADWP just upgraded the Sylmar Converter Station for a $180 million. This is just to upgrade a station, figure in what it would cost to build all this from scratch. You would get a very scary number. Not only would you be trying to get a plant permitted, but you would be fighting every NIMBY between here and there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 8:36 PM Kevarc, How many watt hours does a coal train produce. (Megawatt,Gigawatt whatever) Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:08 AM That depends on the plant and the type of coal. It is really all over the place, it just depends on the plants heat rate. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, April 9, 2005 12:32 PM kevarc, Confidentiality granted, I think you've answered most of the question regarding price. You affirm that the cost of transporting the coal is higher than the mine price of the coal ($/ton). My own previous research on Northern PRB coals had mine prices in the $5 - $10 per ton range back in the late 1990's. For 8800 btu/lb coal at $10/ton, that comes out to about $0.57/mmBtu. If you're paying $20/ton for the haul, the delivered price of your coal on a $/mmBtu basis is about $1.70/mmBtu, of which $1.14/mmBtu is for transportation. Depending on your plant type and the assuming your process costs are about $1.25/mmBtu for an older pulverized coal plant, that means the transportation costs are about equal to the process costs. In transportation economics, there is a theory of cost wherein if your transportation costs are more than the cost of the commodity at the point of origin, the tendency wil be for moving process costs closer to the point of origin so that you have an increasing value added price component of your commodity to justify the increase in transporation costs. Since in your case the cost of transportation may be double the commodity price at the point of origin, and nearly equal to the process costs, the theory would suggest that your rent collectors would be looking toward locating future processing plants closer to the point of origin of the commodity. As you have stated, it depends on the capacity of the transmission system to determine the viability of essentially replacing rail transportation with "coal by wire". I do know that the major utility in the inland PNW is moving forward with transmission line upgrades to allow greater access to power generated mineside in Montana and Wyoming rather than constructing it's own coal generation plant here in the inland PNW, so in their minds the cost of upgrading transmission is less than the costs of building a coal plant here and transporting it in by rail. Apparently, their board of directors were more convinced by the prevailing negatives regarding the ever increasing costs of rail transportation (most of which is predicated on the stories in the energy press of the laments of captive coal plant operators), rather than taking a more sophisticated study of locating such a plant in an area with competitive rail access (on both ends) and using that for the cost comparison. Of course, for electricity, only the primary intermediate commodity can be moved by rail, while the final output product can only move by wire, so the point may be moot for you guys. But if you consider the technology for converting coal into a liquid fuel, the theory is more applicable that such plants would be located mineside or within major coal producing districts, and the output product would more likely move via pipeline rather than rail. Combine that with the new acceptance of using nuclear power rather than coal, and it would seem the railroads have not done themselves any favors with this abuse of differential pricing. Future energy plant construction managers will put a heavy emphasis on the current practices of the rail industry in deciding where and what form these plants will take. If the railroads are successful in pricing the cost of captive coal-based energy beyond the costs for the alternatives, they will have themselves to blame for a future energy industry that tended away from the scenario that would benefit them in the long run, and instead toward a scenario in which rail is more irrelevant and/or less impactful on the final cost of that energy. Reply Edit kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:17 PM No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Sunday, April 10, 2005 1:30 PM QUOTE: Originally posted by kevarc No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. That's true, and it reflects on the poor job the media has done of covering energy issues. The PNW is pretty much condemned to having our non-hydorpower energy needs being filled by either natural gas fired plants, or importing electricity at market rates. Either way, the energy planners from the PNW have almost eliminated the one main advantage of locating a manufacturing plant here, namely cheap electric rates. Of course, the hydro system is played out as far as future expansion, but if our energy planners had any sense, they would have pushed for new coal fired plants built within the region as the adjunct to the hydro system, since coal is the next lowest cost form of electricity generation. Thus, they could have continued having the lowest cost energy to market to manufacturers, instead of losing that advantage to the South and MIdwest. With natural gas now costing $6.00/mmBtu or more, even new power plants fueled by the more expensive clean coal technologies would have been preferable to natural gas plants, market priced imported energy, or having to deal with the recessionary pressures of mandated conservation measures. Even most enviro types will publicly acknowledge that such technologies are not all that objectionable, and probably such clean coal projects could have passed muster for approval here in the PNW. But as I mentioned previously, the railroads have a bad reputation in the energy press for gouging coal customers, and that perception played a significant part in the opting for coal alternatives. Reply Edit 12 Join our Community! Our community is FREE to join. To participate you must either login or register for an account. Login » Register » Search the Community Newsletter Sign-Up By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our privacy policy More great sites from Kalmbach Media Terms Of Use | Privacy Policy | Copyright Policy
Originally posted by Hugh Jampton Originally posted by bobwilcox Originally posted by Hugh Jampton [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 8:33 AM Bob Wilcox: Was that you referenced in Mark Hemphills excellent article on Southern Pacific? I always have enjoyed your economic views on the industry. Thanks for all your help. ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 8:58 AM Wyoming coal. And I cannot give you the price - Confidential, etc, but the coal price is less than the transportation cost. The going rate for coal is 15-18 mils/ton-mile A couple of notes - we own our own cars so while we do not have to pay the extra money if we used leased or RR cars, we still have all teh expenses of owning the cars. ONe way it is about 1400 miles. We are captive at the plant end, it is 15 miles from an interchange point but the RR will not quote us a rate from there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:09 AM OK if I understand correct you are saying that the cost for the transport of coal in what I will term shipper owned cars is 15/18 per ton per mile. That is rather very interesting since if you compare that with very high valued freight moving in intermodal service also costs $15/20 per ton per mile. I presume by the way you wrote your post that if you use RR oowned cars that your cost go up making the ton per mile cost go up. Is that correct? In the shipper owned cars who maintains them to RR standards you or the RRs & do the RRs then charge you for maintance? [:o)][8D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 9:21 AM We have our own maintenence shop at the plant. It is certified by the FRA and must meet the standards for interchange. But if the car gets bad ordered on the road, it has to be repaired there. This is covered under the contract and under ARR standards. Yes, using leased or RR owned cars, you pay a higher price. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:31 AM Thanks sounds like sought of a bad deal. What really suprised me is that coal & widgets pay more/less the same ton per mile rate. [:o)][:D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply bobwilcox Member sinceDecember 2001 From: Crozet, VA 1,049 posts Posted by bobwilcox on Friday, April 8, 2005 9:39 AM QUOTE: Originally posted by Hugh Jampton QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. exactly,, which means the rate is higher than what it would be if backloads were possible. Hugh-The rate is based on the demand for the service. The cost only comes into play in that the rr will not be willing to provide the service if it is below the cost of providing the service. The markup over cost on products with a significant move by rail vary between 1% and about 150%. Ed-It is I. Bob Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 9:53 AM Thanks for the info guys. What is the car hire rate ? And Kevarc, What is the cycle time of your train (Cars) ? Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 10:17 AM Off hand I don't know the cycle time. And note - there are 5 trainsets - we own 3 trainsets with one of our partners and the 3rd own 2 of their own. I'll try to find out - but on the average we get 5-6 trains a week at the plant. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 10:50 AM Kevin: I see you are an engineer...perhaps you can answer this. It might have been addressed before, but here goes. You are paying about $225,000 per trainload of coal. That is about $1,125,000 per week (five loads). Is it feasible to produce the electricity at the mine (Wyoming) and transport the electricity to final use? My guess is that it can be done. But can it be done economically? Is there a loss of electricity during transit? Or would the cost of building and maintaining a grid be cost prohibitive? thjanks ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 11:24 AM Not really, the cost of building the transmission would be unreal. And you have the loses. So this is really a non-starter as far as we are concerned. Plus with the new RTO rules coming from the FERC would make this a riskier proposition than normal. Off hand I can't recall the costs, but they are really high for the addition of a new link from the Pac Northwest to SoCal to relieve pressure on the exiting transmission. The LADWP just upgraded the Sylmar Converter Station for a $180 million. This is just to upgrade a station, figure in what it would cost to build all this from scratch. You would get a very scary number. Not only would you be trying to get a plant permitted, but you would be fighting every NIMBY between here and there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 8:36 PM Kevarc, How many watt hours does a coal train produce. (Megawatt,Gigawatt whatever) Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:08 AM That depends on the plant and the type of coal. It is really all over the place, it just depends on the plants heat rate. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, April 9, 2005 12:32 PM kevarc, Confidentiality granted, I think you've answered most of the question regarding price. You affirm that the cost of transporting the coal is higher than the mine price of the coal ($/ton). My own previous research on Northern PRB coals had mine prices in the $5 - $10 per ton range back in the late 1990's. For 8800 btu/lb coal at $10/ton, that comes out to about $0.57/mmBtu. If you're paying $20/ton for the haul, the delivered price of your coal on a $/mmBtu basis is about $1.70/mmBtu, of which $1.14/mmBtu is for transportation. Depending on your plant type and the assuming your process costs are about $1.25/mmBtu for an older pulverized coal plant, that means the transportation costs are about equal to the process costs. In transportation economics, there is a theory of cost wherein if your transportation costs are more than the cost of the commodity at the point of origin, the tendency wil be for moving process costs closer to the point of origin so that you have an increasing value added price component of your commodity to justify the increase in transporation costs. Since in your case the cost of transportation may be double the commodity price at the point of origin, and nearly equal to the process costs, the theory would suggest that your rent collectors would be looking toward locating future processing plants closer to the point of origin of the commodity. As you have stated, it depends on the capacity of the transmission system to determine the viability of essentially replacing rail transportation with "coal by wire". I do know that the major utility in the inland PNW is moving forward with transmission line upgrades to allow greater access to power generated mineside in Montana and Wyoming rather than constructing it's own coal generation plant here in the inland PNW, so in their minds the cost of upgrading transmission is less than the costs of building a coal plant here and transporting it in by rail. Apparently, their board of directors were more convinced by the prevailing negatives regarding the ever increasing costs of rail transportation (most of which is predicated on the stories in the energy press of the laments of captive coal plant operators), rather than taking a more sophisticated study of locating such a plant in an area with competitive rail access (on both ends) and using that for the cost comparison. Of course, for electricity, only the primary intermediate commodity can be moved by rail, while the final output product can only move by wire, so the point may be moot for you guys. But if you consider the technology for converting coal into a liquid fuel, the theory is more applicable that such plants would be located mineside or within major coal producing districts, and the output product would more likely move via pipeline rather than rail. Combine that with the new acceptance of using nuclear power rather than coal, and it would seem the railroads have not done themselves any favors with this abuse of differential pricing. Future energy plant construction managers will put a heavy emphasis on the current practices of the rail industry in deciding where and what form these plants will take. If the railroads are successful in pricing the cost of captive coal-based energy beyond the costs for the alternatives, they will have themselves to blame for a future energy industry that tended away from the scenario that would benefit them in the long run, and instead toward a scenario in which rail is more irrelevant and/or less impactful on the final cost of that energy. Reply Edit kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:17 PM No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Sunday, April 10, 2005 1:30 PM QUOTE: Originally posted by kevarc No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. That's true, and it reflects on the poor job the media has done of covering energy issues. The PNW is pretty much condemned to having our non-hydorpower energy needs being filled by either natural gas fired plants, or importing electricity at market rates. Either way, the energy planners from the PNW have almost eliminated the one main advantage of locating a manufacturing plant here, namely cheap electric rates. Of course, the hydro system is played out as far as future expansion, but if our energy planners had any sense, they would have pushed for new coal fired plants built within the region as the adjunct to the hydro system, since coal is the next lowest cost form of electricity generation. Thus, they could have continued having the lowest cost energy to market to manufacturers, instead of losing that advantage to the South and MIdwest. With natural gas now costing $6.00/mmBtu or more, even new power plants fueled by the more expensive clean coal technologies would have been preferable to natural gas plants, market priced imported energy, or having to deal with the recessionary pressures of mandated conservation measures. Even most enviro types will publicly acknowledge that such technologies are not all that objectionable, and probably such clean coal projects could have passed muster for approval here in the PNW. But as I mentioned previously, the railroads have a bad reputation in the energy press for gouging coal customers, and that perception played a significant part in the opting for coal alternatives. Reply Edit 12 Join our Community! Our community is FREE to join. To participate you must either login or register for an account. Login » Register » Search the Community Newsletter Sign-Up By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our privacy policy More great sites from Kalmbach Media Terms Of Use | Privacy Policy | Copyright Policy
Originally posted by bobwilcox Originally posted by Hugh Jampton [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 8:33 AM Bob Wilcox: Was that you referenced in Mark Hemphills excellent article on Southern Pacific? I always have enjoyed your economic views on the industry. Thanks for all your help. ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 8:58 AM Wyoming coal. And I cannot give you the price - Confidential, etc, but the coal price is less than the transportation cost. The going rate for coal is 15-18 mils/ton-mile A couple of notes - we own our own cars so while we do not have to pay the extra money if we used leased or RR cars, we still have all teh expenses of owning the cars. ONe way it is about 1400 miles. We are captive at the plant end, it is 15 miles from an interchange point but the RR will not quote us a rate from there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:09 AM OK if I understand correct you are saying that the cost for the transport of coal in what I will term shipper owned cars is 15/18 per ton per mile. That is rather very interesting since if you compare that with very high valued freight moving in intermodal service also costs $15/20 per ton per mile. I presume by the way you wrote your post that if you use RR oowned cars that your cost go up making the ton per mile cost go up. Is that correct? In the shipper owned cars who maintains them to RR standards you or the RRs & do the RRs then charge you for maintance? [:o)][8D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 9:21 AM We have our own maintenence shop at the plant. It is certified by the FRA and must meet the standards for interchange. But if the car gets bad ordered on the road, it has to be repaired there. This is covered under the contract and under ARR standards. Yes, using leased or RR owned cars, you pay a higher price. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:31 AM Thanks sounds like sought of a bad deal. What really suprised me is that coal & widgets pay more/less the same ton per mile rate. [:o)][:D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply bobwilcox Member sinceDecember 2001 From: Crozet, VA 1,049 posts Posted by bobwilcox on Friday, April 8, 2005 9:39 AM QUOTE: Originally posted by Hugh Jampton QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. exactly,, which means the rate is higher than what it would be if backloads were possible. Hugh-The rate is based on the demand for the service. The cost only comes into play in that the rr will not be willing to provide the service if it is below the cost of providing the service. The markup over cost on products with a significant move by rail vary between 1% and about 150%. Ed-It is I. Bob Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 9:53 AM Thanks for the info guys. What is the car hire rate ? And Kevarc, What is the cycle time of your train (Cars) ? Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 10:17 AM Off hand I don't know the cycle time. And note - there are 5 trainsets - we own 3 trainsets with one of our partners and the 3rd own 2 of their own. I'll try to find out - but on the average we get 5-6 trains a week at the plant. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 10:50 AM Kevin: I see you are an engineer...perhaps you can answer this. It might have been addressed before, but here goes. You are paying about $225,000 per trainload of coal. That is about $1,125,000 per week (five loads). Is it feasible to produce the electricity at the mine (Wyoming) and transport the electricity to final use? My guess is that it can be done. But can it be done economically? Is there a loss of electricity during transit? Or would the cost of building and maintaining a grid be cost prohibitive? thjanks ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 11:24 AM Not really, the cost of building the transmission would be unreal. And you have the loses. So this is really a non-starter as far as we are concerned. Plus with the new RTO rules coming from the FERC would make this a riskier proposition than normal. Off hand I can't recall the costs, but they are really high for the addition of a new link from the Pac Northwest to SoCal to relieve pressure on the exiting transmission. The LADWP just upgraded the Sylmar Converter Station for a $180 million. This is just to upgrade a station, figure in what it would cost to build all this from scratch. You would get a very scary number. Not only would you be trying to get a plant permitted, but you would be fighting every NIMBY between here and there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 8:36 PM Kevarc, How many watt hours does a coal train produce. (Megawatt,Gigawatt whatever) Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:08 AM That depends on the plant and the type of coal. It is really all over the place, it just depends on the plants heat rate. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, April 9, 2005 12:32 PM kevarc, Confidentiality granted, I think you've answered most of the question regarding price. You affirm that the cost of transporting the coal is higher than the mine price of the coal ($/ton). My own previous research on Northern PRB coals had mine prices in the $5 - $10 per ton range back in the late 1990's. For 8800 btu/lb coal at $10/ton, that comes out to about $0.57/mmBtu. If you're paying $20/ton for the haul, the delivered price of your coal on a $/mmBtu basis is about $1.70/mmBtu, of which $1.14/mmBtu is for transportation. Depending on your plant type and the assuming your process costs are about $1.25/mmBtu for an older pulverized coal plant, that means the transportation costs are about equal to the process costs. In transportation economics, there is a theory of cost wherein if your transportation costs are more than the cost of the commodity at the point of origin, the tendency wil be for moving process costs closer to the point of origin so that you have an increasing value added price component of your commodity to justify the increase in transporation costs. Since in your case the cost of transportation may be double the commodity price at the point of origin, and nearly equal to the process costs, the theory would suggest that your rent collectors would be looking toward locating future processing plants closer to the point of origin of the commodity. As you have stated, it depends on the capacity of the transmission system to determine the viability of essentially replacing rail transportation with "coal by wire". I do know that the major utility in the inland PNW is moving forward with transmission line upgrades to allow greater access to power generated mineside in Montana and Wyoming rather than constructing it's own coal generation plant here in the inland PNW, so in their minds the cost of upgrading transmission is less than the costs of building a coal plant here and transporting it in by rail. Apparently, their board of directors were more convinced by the prevailing negatives regarding the ever increasing costs of rail transportation (most of which is predicated on the stories in the energy press of the laments of captive coal plant operators), rather than taking a more sophisticated study of locating such a plant in an area with competitive rail access (on both ends) and using that for the cost comparison. Of course, for electricity, only the primary intermediate commodity can be moved by rail, while the final output product can only move by wire, so the point may be moot for you guys. But if you consider the technology for converting coal into a liquid fuel, the theory is more applicable that such plants would be located mineside or within major coal producing districts, and the output product would more likely move via pipeline rather than rail. Combine that with the new acceptance of using nuclear power rather than coal, and it would seem the railroads have not done themselves any favors with this abuse of differential pricing. Future energy plant construction managers will put a heavy emphasis on the current practices of the rail industry in deciding where and what form these plants will take. If the railroads are successful in pricing the cost of captive coal-based energy beyond the costs for the alternatives, they will have themselves to blame for a future energy industry that tended away from the scenario that would benefit them in the long run, and instead toward a scenario in which rail is more irrelevant and/or less impactful on the final cost of that energy. Reply Edit kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:17 PM No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Sunday, April 10, 2005 1:30 PM QUOTE: Originally posted by kevarc No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. That's true, and it reflects on the poor job the media has done of covering energy issues. The PNW is pretty much condemned to having our non-hydorpower energy needs being filled by either natural gas fired plants, or importing electricity at market rates. Either way, the energy planners from the PNW have almost eliminated the one main advantage of locating a manufacturing plant here, namely cheap electric rates. Of course, the hydro system is played out as far as future expansion, but if our energy planners had any sense, they would have pushed for new coal fired plants built within the region as the adjunct to the hydro system, since coal is the next lowest cost form of electricity generation. Thus, they could have continued having the lowest cost energy to market to manufacturers, instead of losing that advantage to the South and MIdwest. With natural gas now costing $6.00/mmBtu or more, even new power plants fueled by the more expensive clean coal technologies would have been preferable to natural gas plants, market priced imported energy, or having to deal with the recessionary pressures of mandated conservation measures. Even most enviro types will publicly acknowledge that such technologies are not all that objectionable, and probably such clean coal projects could have passed muster for approval here in the PNW. But as I mentioned previously, the railroads have a bad reputation in the energy press for gouging coal customers, and that perception played a significant part in the opting for coal alternatives. Reply Edit 12 Join our Community! Our community is FREE to join. To participate you must either login or register for an account. Login » Register » Search the Community Newsletter Sign-Up By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our privacy policy More great sites from Kalmbach Media Terms Of Use | Privacy Policy | Copyright Policy
Originally posted by Hugh Jampton [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 8:33 AM Bob Wilcox: Was that you referenced in Mark Hemphills excellent article on Southern Pacific? I always have enjoyed your economic views on the industry. Thanks for all your help. ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 8:58 AM Wyoming coal. And I cannot give you the price - Confidential, etc, but the coal price is less than the transportation cost. The going rate for coal is 15-18 mils/ton-mile A couple of notes - we own our own cars so while we do not have to pay the extra money if we used leased or RR cars, we still have all teh expenses of owning the cars. ONe way it is about 1400 miles. We are captive at the plant end, it is 15 miles from an interchange point but the RR will not quote us a rate from there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:09 AM OK if I understand correct you are saying that the cost for the transport of coal in what I will term shipper owned cars is 15/18 per ton per mile. That is rather very interesting since if you compare that with very high valued freight moving in intermodal service also costs $15/20 per ton per mile. I presume by the way you wrote your post that if you use RR oowned cars that your cost go up making the ton per mile cost go up. Is that correct? In the shipper owned cars who maintains them to RR standards you or the RRs & do the RRs then charge you for maintance? [:o)][8D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 9:21 AM We have our own maintenence shop at the plant. It is certified by the FRA and must meet the standards for interchange. But if the car gets bad ordered on the road, it has to be repaired there. This is covered under the contract and under ARR standards. Yes, using leased or RR owned cars, you pay a higher price. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:31 AM Thanks sounds like sought of a bad deal. What really suprised me is that coal & widgets pay more/less the same ton per mile rate. [:o)][:D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply bobwilcox Member sinceDecember 2001 From: Crozet, VA 1,049 posts Posted by bobwilcox on Friday, April 8, 2005 9:39 AM QUOTE: Originally posted by Hugh Jampton QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. exactly,, which means the rate is higher than what it would be if backloads were possible. Hugh-The rate is based on the demand for the service. The cost only comes into play in that the rr will not be willing to provide the service if it is below the cost of providing the service. The markup over cost on products with a significant move by rail vary between 1% and about 150%. Ed-It is I. Bob Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 9:53 AM Thanks for the info guys. What is the car hire rate ? And Kevarc, What is the cycle time of your train (Cars) ? Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 10:17 AM Off hand I don't know the cycle time. And note - there are 5 trainsets - we own 3 trainsets with one of our partners and the 3rd own 2 of their own. I'll try to find out - but on the average we get 5-6 trains a week at the plant. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 10:50 AM Kevin: I see you are an engineer...perhaps you can answer this. It might have been addressed before, but here goes. You are paying about $225,000 per trainload of coal. That is about $1,125,000 per week (five loads). Is it feasible to produce the electricity at the mine (Wyoming) and transport the electricity to final use? My guess is that it can be done. But can it be done economically? Is there a loss of electricity during transit? Or would the cost of building and maintaining a grid be cost prohibitive? thjanks ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 11:24 AM Not really, the cost of building the transmission would be unreal. And you have the loses. So this is really a non-starter as far as we are concerned. Plus with the new RTO rules coming from the FERC would make this a riskier proposition than normal. Off hand I can't recall the costs, but they are really high for the addition of a new link from the Pac Northwest to SoCal to relieve pressure on the exiting transmission. The LADWP just upgraded the Sylmar Converter Station for a $180 million. This is just to upgrade a station, figure in what it would cost to build all this from scratch. You would get a very scary number. Not only would you be trying to get a plant permitted, but you would be fighting every NIMBY between here and there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 8:36 PM Kevarc, How many watt hours does a coal train produce. (Megawatt,Gigawatt whatever) Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:08 AM That depends on the plant and the type of coal. It is really all over the place, it just depends on the plants heat rate. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, April 9, 2005 12:32 PM kevarc, Confidentiality granted, I think you've answered most of the question regarding price. You affirm that the cost of transporting the coal is higher than the mine price of the coal ($/ton). My own previous research on Northern PRB coals had mine prices in the $5 - $10 per ton range back in the late 1990's. For 8800 btu/lb coal at $10/ton, that comes out to about $0.57/mmBtu. If you're paying $20/ton for the haul, the delivered price of your coal on a $/mmBtu basis is about $1.70/mmBtu, of which $1.14/mmBtu is for transportation. Depending on your plant type and the assuming your process costs are about $1.25/mmBtu for an older pulverized coal plant, that means the transportation costs are about equal to the process costs. In transportation economics, there is a theory of cost wherein if your transportation costs are more than the cost of the commodity at the point of origin, the tendency wil be for moving process costs closer to the point of origin so that you have an increasing value added price component of your commodity to justify the increase in transporation costs. Since in your case the cost of transportation may be double the commodity price at the point of origin, and nearly equal to the process costs, the theory would suggest that your rent collectors would be looking toward locating future processing plants closer to the point of origin of the commodity. As you have stated, it depends on the capacity of the transmission system to determine the viability of essentially replacing rail transportation with "coal by wire". I do know that the major utility in the inland PNW is moving forward with transmission line upgrades to allow greater access to power generated mineside in Montana and Wyoming rather than constructing it's own coal generation plant here in the inland PNW, so in their minds the cost of upgrading transmission is less than the costs of building a coal plant here and transporting it in by rail. Apparently, their board of directors were more convinced by the prevailing negatives regarding the ever increasing costs of rail transportation (most of which is predicated on the stories in the energy press of the laments of captive coal plant operators), rather than taking a more sophisticated study of locating such a plant in an area with competitive rail access (on both ends) and using that for the cost comparison. Of course, for electricity, only the primary intermediate commodity can be moved by rail, while the final output product can only move by wire, so the point may be moot for you guys. But if you consider the technology for converting coal into a liquid fuel, the theory is more applicable that such plants would be located mineside or within major coal producing districts, and the output product would more likely move via pipeline rather than rail. Combine that with the new acceptance of using nuclear power rather than coal, and it would seem the railroads have not done themselves any favors with this abuse of differential pricing. Future energy plant construction managers will put a heavy emphasis on the current practices of the rail industry in deciding where and what form these plants will take. If the railroads are successful in pricing the cost of captive coal-based energy beyond the costs for the alternatives, they will have themselves to blame for a future energy industry that tended away from the scenario that would benefit them in the long run, and instead toward a scenario in which rail is more irrelevant and/or less impactful on the final cost of that energy. Reply Edit kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:17 PM No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Sunday, April 10, 2005 1:30 PM QUOTE: Originally posted by kevarc No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. That's true, and it reflects on the poor job the media has done of covering energy issues. The PNW is pretty much condemned to having our non-hydorpower energy needs being filled by either natural gas fired plants, or importing electricity at market rates. Either way, the energy planners from the PNW have almost eliminated the one main advantage of locating a manufacturing plant here, namely cheap electric rates. Of course, the hydro system is played out as far as future expansion, but if our energy planners had any sense, they would have pushed for new coal fired plants built within the region as the adjunct to the hydro system, since coal is the next lowest cost form of electricity generation. Thus, they could have continued having the lowest cost energy to market to manufacturers, instead of losing that advantage to the South and MIdwest. With natural gas now costing $6.00/mmBtu or more, even new power plants fueled by the more expensive clean coal technologies would have been preferable to natural gas plants, market priced imported energy, or having to deal with the recessionary pressures of mandated conservation measures. Even most enviro types will publicly acknowledge that such technologies are not all that objectionable, and probably such clean coal projects could have passed muster for approval here in the PNW. But as I mentioned previously, the railroads have a bad reputation in the energy press for gouging coal customers, and that perception played a significant part in the opting for coal alternatives. Reply Edit 12 Join our Community! Our community is FREE to join. To participate you must either login or register for an account. Login » Register » Search the Community Newsletter Sign-Up By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our privacy policy More great sites from Kalmbach Media Terms Of Use | Privacy Policy | Copyright Policy
Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 9:21 AM We have our own maintenence shop at the plant. It is certified by the FRA and must meet the standards for interchange. But if the car gets bad ordered on the road, it has to be repaired there. This is covered under the contract and under ARR standards. Yes, using leased or RR owned cars, you pay a higher price. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply spbed Member sinceDecember 2001 From: Austin TX 4,941 posts Posted by spbed on Friday, April 8, 2005 9:31 AM Thanks sounds like sought of a bad deal. What really suprised me is that coal & widgets pay more/less the same ton per mile rate. [:o)][:D] Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply bobwilcox Member sinceDecember 2001 From: Crozet, VA 1,049 posts Posted by bobwilcox on Friday, April 8, 2005 9:39 AM QUOTE: Originally posted by Hugh Jampton QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. exactly,, which means the rate is higher than what it would be if backloads were possible. Hugh-The rate is based on the demand for the service. The cost only comes into play in that the rr will not be willing to provide the service if it is below the cost of providing the service. The markup over cost on products with a significant move by rail vary between 1% and about 150%. Ed-It is I. Bob Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 9:53 AM Thanks for the info guys. What is the car hire rate ? And Kevarc, What is the cycle time of your train (Cars) ? Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 10:17 AM Off hand I don't know the cycle time. And note - there are 5 trainsets - we own 3 trainsets with one of our partners and the 3rd own 2 of their own. I'll try to find out - but on the average we get 5-6 trains a week at the plant. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 10:50 AM Kevin: I see you are an engineer...perhaps you can answer this. It might have been addressed before, but here goes. You are paying about $225,000 per trainload of coal. That is about $1,125,000 per week (five loads). Is it feasible to produce the electricity at the mine (Wyoming) and transport the electricity to final use? My guess is that it can be done. But can it be done economically? Is there a loss of electricity during transit? Or would the cost of building and maintaining a grid be cost prohibitive? thjanks ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 11:24 AM Not really, the cost of building the transmission would be unreal. And you have the loses. So this is really a non-starter as far as we are concerned. Plus with the new RTO rules coming from the FERC would make this a riskier proposition than normal. Off hand I can't recall the costs, but they are really high for the addition of a new link from the Pac Northwest to SoCal to relieve pressure on the exiting transmission. The LADWP just upgraded the Sylmar Converter Station for a $180 million. This is just to upgrade a station, figure in what it would cost to build all this from scratch. You would get a very scary number. Not only would you be trying to get a plant permitted, but you would be fighting every NIMBY between here and there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 8:36 PM Kevarc, How many watt hours does a coal train produce. (Megawatt,Gigawatt whatever) Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:08 AM That depends on the plant and the type of coal. It is really all over the place, it just depends on the plants heat rate. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, April 9, 2005 12:32 PM kevarc, Confidentiality granted, I think you've answered most of the question regarding price. You affirm that the cost of transporting the coal is higher than the mine price of the coal ($/ton). My own previous research on Northern PRB coals had mine prices in the $5 - $10 per ton range back in the late 1990's. For 8800 btu/lb coal at $10/ton, that comes out to about $0.57/mmBtu. If you're paying $20/ton for the haul, the delivered price of your coal on a $/mmBtu basis is about $1.70/mmBtu, of which $1.14/mmBtu is for transportation. Depending on your plant type and the assuming your process costs are about $1.25/mmBtu for an older pulverized coal plant, that means the transportation costs are about equal to the process costs. In transportation economics, there is a theory of cost wherein if your transportation costs are more than the cost of the commodity at the point of origin, the tendency wil be for moving process costs closer to the point of origin so that you have an increasing value added price component of your commodity to justify the increase in transporation costs. Since in your case the cost of transportation may be double the commodity price at the point of origin, and nearly equal to the process costs, the theory would suggest that your rent collectors would be looking toward locating future processing plants closer to the point of origin of the commodity. As you have stated, it depends on the capacity of the transmission system to determine the viability of essentially replacing rail transportation with "coal by wire". I do know that the major utility in the inland PNW is moving forward with transmission line upgrades to allow greater access to power generated mineside in Montana and Wyoming rather than constructing it's own coal generation plant here in the inland PNW, so in their minds the cost of upgrading transmission is less than the costs of building a coal plant here and transporting it in by rail. Apparently, their board of directors were more convinced by the prevailing negatives regarding the ever increasing costs of rail transportation (most of which is predicated on the stories in the energy press of the laments of captive coal plant operators), rather than taking a more sophisticated study of locating such a plant in an area with competitive rail access (on both ends) and using that for the cost comparison. Of course, for electricity, only the primary intermediate commodity can be moved by rail, while the final output product can only move by wire, so the point may be moot for you guys. But if you consider the technology for converting coal into a liquid fuel, the theory is more applicable that such plants would be located mineside or within major coal producing districts, and the output product would more likely move via pipeline rather than rail. Combine that with the new acceptance of using nuclear power rather than coal, and it would seem the railroads have not done themselves any favors with this abuse of differential pricing. Future energy plant construction managers will put a heavy emphasis on the current practices of the rail industry in deciding where and what form these plants will take. If the railroads are successful in pricing the cost of captive coal-based energy beyond the costs for the alternatives, they will have themselves to blame for a future energy industry that tended away from the scenario that would benefit them in the long run, and instead toward a scenario in which rail is more irrelevant and/or less impactful on the final cost of that energy. Reply Edit kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:17 PM No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Sunday, April 10, 2005 1:30 PM QUOTE: Originally posted by kevarc No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. That's true, and it reflects on the poor job the media has done of covering energy issues. The PNW is pretty much condemned to having our non-hydorpower energy needs being filled by either natural gas fired plants, or importing electricity at market rates. Either way, the energy planners from the PNW have almost eliminated the one main advantage of locating a manufacturing plant here, namely cheap electric rates. Of course, the hydro system is played out as far as future expansion, but if our energy planners had any sense, they would have pushed for new coal fired plants built within the region as the adjunct to the hydro system, since coal is the next lowest cost form of electricity generation. Thus, they could have continued having the lowest cost energy to market to manufacturers, instead of losing that advantage to the South and MIdwest. With natural gas now costing $6.00/mmBtu or more, even new power plants fueled by the more expensive clean coal technologies would have been preferable to natural gas plants, market priced imported energy, or having to deal with the recessionary pressures of mandated conservation measures. Even most enviro types will publicly acknowledge that such technologies are not all that objectionable, and probably such clean coal projects could have passed muster for approval here in the PNW. But as I mentioned previously, the railroads have a bad reputation in the energy press for gouging coal customers, and that perception played a significant part in the opting for coal alternatives. Reply Edit 12 Join our Community! Our community is FREE to join. To participate you must either login or register for an account. Login » Register » Search the Community Newsletter Sign-Up By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our privacy policy More great sites from Kalmbach Media Terms Of Use | Privacy Policy | Copyright Policy
Originally posted by kevarc [ Living nearby to MP 186 of the UPRR Austin TX Sub Reply bobwilcox Member sinceDecember 2001 From: Crozet, VA 1,049 posts Posted by bobwilcox on Friday, April 8, 2005 9:39 AM QUOTE: Originally posted by Hugh Jampton QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. exactly,, which means the rate is higher than what it would be if backloads were possible. Hugh-The rate is based on the demand for the service. The cost only comes into play in that the rr will not be willing to provide the service if it is below the cost of providing the service. The markup over cost on products with a significant move by rail vary between 1% and about 150%. Ed-It is I. Bob Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 9:53 AM Thanks for the info guys. What is the car hire rate ? And Kevarc, What is the cycle time of your train (Cars) ? Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 10:17 AM Off hand I don't know the cycle time. And note - there are 5 trainsets - we own 3 trainsets with one of our partners and the 3rd own 2 of their own. I'll try to find out - but on the average we get 5-6 trains a week at the plant. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply MP173 Member sinceMay 2004 From: Valparaiso, In 5,921 posts Posted by MP173 on Friday, April 8, 2005 10:50 AM Kevin: I see you are an engineer...perhaps you can answer this. It might have been addressed before, but here goes. You are paying about $225,000 per trainload of coal. That is about $1,125,000 per week (five loads). Is it feasible to produce the electricity at the mine (Wyoming) and transport the electricity to final use? My guess is that it can be done. But can it be done economically? Is there a loss of electricity during transit? Or would the cost of building and maintaining a grid be cost prohibitive? thjanks ed Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Friday, April 8, 2005 11:24 AM Not really, the cost of building the transmission would be unreal. And you have the loses. So this is really a non-starter as far as we are concerned. Plus with the new RTO rules coming from the FERC would make this a riskier proposition than normal. Off hand I can't recall the costs, but they are really high for the addition of a new link from the Pac Northwest to SoCal to relieve pressure on the exiting transmission. The LADWP just upgraded the Sylmar Converter Station for a $180 million. This is just to upgrade a station, figure in what it would cost to build all this from scratch. You would get a very scary number. Not only would you be trying to get a plant permitted, but you would be fighting every NIMBY between here and there. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply chad thomas Member sinceJanuary 2005 From: Ely, Nv. 6,312 posts Posted by chad thomas on Friday, April 8, 2005 8:36 PM Kevarc, How many watt hours does a coal train produce. (Megawatt,Gigawatt whatever) Reply kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:08 AM That depends on the plant and the type of coal. It is really all over the place, it just depends on the plants heat rate. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Saturday, April 9, 2005 12:32 PM kevarc, Confidentiality granted, I think you've answered most of the question regarding price. You affirm that the cost of transporting the coal is higher than the mine price of the coal ($/ton). My own previous research on Northern PRB coals had mine prices in the $5 - $10 per ton range back in the late 1990's. For 8800 btu/lb coal at $10/ton, that comes out to about $0.57/mmBtu. If you're paying $20/ton for the haul, the delivered price of your coal on a $/mmBtu basis is about $1.70/mmBtu, of which $1.14/mmBtu is for transportation. Depending on your plant type and the assuming your process costs are about $1.25/mmBtu for an older pulverized coal plant, that means the transportation costs are about equal to the process costs. In transportation economics, there is a theory of cost wherein if your transportation costs are more than the cost of the commodity at the point of origin, the tendency wil be for moving process costs closer to the point of origin so that you have an increasing value added price component of your commodity to justify the increase in transporation costs. Since in your case the cost of transportation may be double the commodity price at the point of origin, and nearly equal to the process costs, the theory would suggest that your rent collectors would be looking toward locating future processing plants closer to the point of origin of the commodity. As you have stated, it depends on the capacity of the transmission system to determine the viability of essentially replacing rail transportation with "coal by wire". I do know that the major utility in the inland PNW is moving forward with transmission line upgrades to allow greater access to power generated mineside in Montana and Wyoming rather than constructing it's own coal generation plant here in the inland PNW, so in their minds the cost of upgrading transmission is less than the costs of building a coal plant here and transporting it in by rail. Apparently, their board of directors were more convinced by the prevailing negatives regarding the ever increasing costs of rail transportation (most of which is predicated on the stories in the energy press of the laments of captive coal plant operators), rather than taking a more sophisticated study of locating such a plant in an area with competitive rail access (on both ends) and using that for the cost comparison. Of course, for electricity, only the primary intermediate commodity can be moved by rail, while the final output product can only move by wire, so the point may be moot for you guys. But if you consider the technology for converting coal into a liquid fuel, the theory is more applicable that such plants would be located mineside or within major coal producing districts, and the output product would more likely move via pipeline rather than rail. Combine that with the new acceptance of using nuclear power rather than coal, and it would seem the railroads have not done themselves any favors with this abuse of differential pricing. Future energy plant construction managers will put a heavy emphasis on the current practices of the rail industry in deciding where and what form these plants will take. If the railroads are successful in pricing the cost of captive coal-based energy beyond the costs for the alternatives, they will have themselves to blame for a future energy industry that tended away from the scenario that would benefit them in the long run, and instead toward a scenario in which rail is more irrelevant and/or less impactful on the final cost of that energy. Reply Edit kevarc Member sinceJanuary 2002 From: Richland WA 361 posts Posted by kevarc on Saturday, April 9, 2005 9:17 PM No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. Kevin Arceneaux Mining Engineer, Penn State 1979 Reply Anonymous Member sinceApril 2003 305,205 posts Posted by Anonymous on Sunday, April 10, 2005 1:30 PM QUOTE: Originally posted by kevarc No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west. That's true, and it reflects on the poor job the media has done of covering energy issues. The PNW is pretty much condemned to having our non-hydorpower energy needs being filled by either natural gas fired plants, or importing electricity at market rates. Either way, the energy planners from the PNW have almost eliminated the one main advantage of locating a manufacturing plant here, namely cheap electric rates. Of course, the hydro system is played out as far as future expansion, but if our energy planners had any sense, they would have pushed for new coal fired plants built within the region as the adjunct to the hydro system, since coal is the next lowest cost form of electricity generation. Thus, they could have continued having the lowest cost energy to market to manufacturers, instead of losing that advantage to the South and MIdwest. With natural gas now costing $6.00/mmBtu or more, even new power plants fueled by the more expensive clean coal technologies would have been preferable to natural gas plants, market priced imported energy, or having to deal with the recessionary pressures of mandated conservation measures. Even most enviro types will publicly acknowledge that such technologies are not all that objectionable, and probably such clean coal projects could have passed muster for approval here in the PNW. But as I mentioned previously, the railroads have a bad reputation in the energy press for gouging coal customers, and that perception played a significant part in the opting for coal alternatives. Reply Edit 12 Join our Community! Our community is FREE to join. To participate you must either login or register for an account. 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QUOTE: Originally posted by Hugh Jampton QUOTE: Originally posted by bobwilcox QUOTE: Originally posted by Hugh Jampton but somewhere along the line you have to cover the cost of getting the empties back to the mine. Except for some intermodal moves the cost of returning the empties is included in the rate. exactly,, which means the rate is higher than what it would be if backloads were possible.
QUOTE: Originally posted by kevarc No they haven't, but coal is still the cheapest fuel.. You must remember the PNW is almost as bad a Calafornia as far as environmetnal extremests. So the NIMBY factor for building transmission is far less than the NIMBY factor for building an ukky coal fired plant in thier state. Let some other state deal with the pollution, as long as it is to the east and the prevailing winds are out of the west.
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