Railroads Struggle to Deliver Coal to Utilities

[Anonymous]

QUOTE: Originally posted by CrazyDiamond

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by CrazyDiamond

QUOTE: Originally posted by futuremodal

Again, I will ask you this: Can you name any other industry besides the rail industry that has engaged in such a canabalistic attitude toward it's hard assets?

Sorry didn't bother to read this topic thread till tonight. To answer your question: Telecommunications, espescally in the traditional landline part.

Most landlines are still in place. With broadband and mobility being the preference of most people, it is the new accounts that are going dsl and wireless.
There has been a net loss of rail capacity. There has not been a net loss of communications.
The answer is of course, no one but the railroads have emaciated themselves in that vein.

#1 The landlines business is to telecommunications like the RR is to the transportation.
#2 Both telecommunications and transport are increasing.
#3 Landline business is decreasing, with voice shifting to wireless cellular another telcommunications sector....kinda like RR traffic shifting to tractor-trailor sector.
#4 Using voice, video, and data as the three traffic types, voice and video have been exceed greatly by data.
#5 Landline capacity has been axed to free up space in the Central Office.
#6 VoIP (Voice over Internet Protocol) is a free way to send telephone calls over the Internet. Phone companies are currently seeing a decrease in their voice traffic and revenue.

The companies that do a bunch of each are doing okay....but the company that is a pure play landline company is taking a pounding. They are losing too VoIP and cellular. Don't tell me they are not suffering from a net loss in traffic and business.......if they weren't why are they lobbying goverment to (a) make VoIP over the Internet illegal, and (b) prevent number portability from landline to cell phones???

So yes both the telecomunications and the transport industry has seen net growth, some of their sectors has seen a net loss in growth i.e RR and landline....and the landline sector specifically has sold off hard assests to reduce various costs, and free up some cash.

You asked for examples of other industries that have done what the RRs have done, and we have given you 2 or 3 now......and you refuse to listen. Maybe you should spend $60K on a model dream RR that implements your wisdom and then go live in it. [;)]

No, you've given 2 or 3 examples of why you just don't get it. First, a failed steel industry analogy, then an even more absurd auto industry analogy, now right out of left field a failed telcom analogy. But first, your erroneous analogy....

"#3 Landline business is decreasing, with voice shifting to wireless cellular another telcommunications sector....kinda like RR traffic shifting to tractor-trailor sector."

Pray tell, why have you compared railroads to landlines and wireless to trucking? Trucks don't fly, they need a physical continuous infrastructure just like railroad transporters. If anything, the closest transport analogy to wireless would be air freight, and there just isn't all that much that has or will shift from rail to air freight.

A better analogy would be comparing old land lines to jointed rail, and fiber optics to welded rail. In that, you see that there is no retrenchment in the telecommunications sector, rather a shift from an older technology to a newer technology. The telcoms aren't cutting back on their infrastructural reach like the railroads. Quite the contrary, they are constantly expanding their infrastructural reach. And no, they are not selling off their land lines for scrap, because they still have a bunch of stubborn customers that still use land lines (dang that AARP!)

Railroads cut back because their collective management didn't want to deal with the hassles of an expanding customer base, prefering instead to consolidate the customer base and extract more pricing power over these remaining customers. That's why a lot of former rail traffic ended up on rubber tires, on foreign soil, or disappeared in the form of abandoned production facilities. It is ironic that, in another twist on the saga, those same railroads fall all over themselves to bring in Asian products at marginal rates, products that used to be produced here in the US at captive facilities (and corresponding captive rates).

Again, it all boils down to monopoly behaviour vs competitive behaviour.

[CrazyDiamond]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by CrazyDiamond

QUOTE: Originally posted by futuremodal

Again, I will ask you this: Can you name any other industry besides the rail industry that has engaged in such a canabalistic attitude toward it's hard assets?

Sorry didn't bother to read this topic thread till tonight. To answer your question: Telecommunications, espescally in the traditional landline part.

Most landlines are still in place. With broadband and mobility being the preference of most people, it is the new accounts that are going dsl and wireless.
There has been a net loss of rail capacity. There has not been a net loss of communications.
The answer is of course, no one but the railroads have emaciated themselves in that vein.

#1 The landlines business is to telecommunications like the RR is to the transportation.
#2 Both telecommunications and transport are increasing.
#3 Landline business is decreasing, with voice shifting to wireless cellular another telcommunications sector....kinda like RR traffic shifting to tractor-trailor sector.
#4 Using voice, video, and data as the three traffic types, voice and video have been exceed greatly by data.
#5 Landline capacity has been axed to free up space in the Central Office.
#6 VoIP (Voice over Internet Protocol) is a free way to send telephone calls over the Internet. Phone companies are currently seeing a decrease in their voice traffic and revenue.

The companies that do a bunch of each are doing okay....but the company that is a pure play landline company is taking a pounding. They are losing too VoIP and cellular. Don't tell me they are not suffering from a net loss in traffic and business.......if they weren't why are they lobbying goverment to (a) make VoIP over the Internet illegal, and (b) prevent number portability from landline to cell phones???

So yes both the telecomunications and the transport industry has seen net growth, some of their sectors has seen a net loss in growth i.e RR and landline....and the landline sector specifically has sold off hard assests to reduce various costs, and free up some cash.

You asked for examples of other industries that have done what the RRs have done, and we have given you 2 or 3 now......and you refuse to listen. Maybe you should spend $60K on a model dream RR that implements your wisdom and then go live in it. [;)]

[Anonymous]

Bert,

The BNSF guy Robb is blowing smoke, hoping that his audience of coal entities are too dumb to do their own fact checking. He knows perfectly well his line's highest rates of return are in the captive areas - coal, ag, domestic manufacturing. And the funny thing is, BNSF IS taking cash from the captives and subsidizing the "consumer goods" from Asia. They are NOT getting the best rate of return from consumer goods, rather they get a marginal rate of return but also a growing business segment. Coal and ag are BNSF's real money makers. Which makes the Robb statement nothing short of twisted.

[Anonymous]

QUOTE: Originally posted by CrazyDiamond

QUOTE: Originally posted by futuremodal

Again, I will ask you this: Can you name any other industry besides the rail industry that has engaged in such a canabalistic attitude toward it's hard assets?

Sorry didn't bother to read this topic thread till tonight. To answer your question: Telecommunications, espescally in the traditional landline part.

Most landlines are still in place. With broadband and mobility being the preference of most people, it is the new accounts that are going dsl and wireless.

There has been a net loss of rail capacity. There has not been a net loss of communications.

The answer is of course, no one but the railroads have emaciated themselves in that vein.

[CrazyDiamond]

QUOTE: Originally posted by futuremodal

Again, I will ask you this: Can you name any other industry besides the rail industry that has engaged in such a canabalistic attitude toward it's hard assets?

Sorry didn't bother to read this topic thread till tonight. To answer your question: Telecommunications, espescally in the traditional landline part.

[n012944]

QUOTE: Originally posted by MichaelSol

Not sure anyone wants to get into an argument with Dustin Bleizeffer, the energy reporter for the Casper Star-Tribune, but why don't you just go to the BNSF Annual Report, for instance, and look at the carload revenue breakdown for coal, ag, intermodal, etc. and see what it says?

Then you would at least have some numbers to start from instead of relying on Dustin Bleizeffer, energy reporter for the Casper Star Tribune, for your information about railroad rates.

I just use what is posted here, I have a life, and don't waste my day looking at carload rates. If that is what you would like to do with your day, more power to you. Dave posted this artical, that is what I am using for reference.


Bert

[n012944]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by n012944
Funny, I have seen it argued many times that most coal shippers/utilities are captive shippers, however this artical that Dave posted seems to dissagree with both you and Dave. From the artical "coal haulage provides the LEAST amount of return on capital expenditures." How can that be?

So then why did you say they are investing where they get the higher rates of return?

"Those big bad mean railroads, how dare they put more of THEIR money into the area with higher returns."

Not following your argument here .... it looks like you want to argue about something, I just can't tell what it is ...

Dave had stated that BNSF was blackmailing the coal industry because they were not going to invest into coal capacity if the coal companies pushed for reregulation. The artical says there is little return on the investment on coal, so to say it so you will understand. How dare the BNSF put money into consumer goods, were there is a much better return on the dollar, over coal were there is not much of a return.

Bert

[Anonymous]

QUOTE: Originally posted by MichaelSol

Not sure anyone wants to get into an argument with Dustin Bleizeffer, the energy reporter for the Casper Star-Tribune, but why don't you just go to the BNSF Annual Report, for instance, and look at the carload revenue breakdown for coal, ag, intermodal, etc. and see what it says?

Then you would at least have some numbers to start from instead of relying on Dustin Bleizeffer, energy reporter for the Casper Star Tribune, for your information about railroad rates.

Well, sheeewt, an I though you wuz one of them law-yer fellas what could read??

The article actually is quoting and relying upon Steve Robb of BNSF, if you got that far...

(Hint: 2d paragraph)

[Anonymous]

QUOTE: Originally posted by MichaelSol

The highest returns are where the captive shippers are,

WHOA there cowpoke...one of those big sky overbroad type statements, agin...

Ain't necessarily so...

The best returns on a railroad are where traffic volume is maximized without overwhelming the infrastructure making utilization of the infrastructure, equipment and personnel greatest and most efficient. One example would be the Port of LA/Long Beach which has competitive service by two Class 1 systems and switching largely performed by a short line (Pacific Harbor Line) connecting with both.

Just because a shipper uses one railroad does not maximize returns and although unit trains and large loading and unloading facilities can increase returns through attacking the expense of the three above areas doesn't mean it is the best ROI on the RR. But, nice try...

[greyhounds]

QUOTE: Originally posted by MichaelSol

The highest returns are where the captive shippers are,

No.

Sol keeps saying this (or saying similar things) because it fits his ideology and political agenda. He has provided no basis or data to support this statement.

In the past, what he's tried to use as stubstantiation are the supposidly high margins (or revenuue to variable cost ratios) on the so-called 'captive' business.

Leaving aside the questions of whether the margins he uses are accurate, and wether the shippers are indeded 'captive', it is important to realize that a high margin in and of itself will not produce a high rate of return on an investment, nor will it result in profitability.

Margins are not the same as "returns" or "profits".

A railroad could mark every bit of traffic up to 300% of its variable costs and still go broke. A railroad could sell every bit of traffic at 110% of its variable costs and be very profitable with a high rate of return on its investment.

You gotta' have some volume. Profitability = margin x volume. You need to consider both factors on the right hand side of the equation. Sol keeps leaving out volume because it suits his purpose, whatever that purpose is.

Now Powder River coal certainly has the volume, but until now it hasn't had the margins. The railroads are fixing that as existing contracts come up for renewal. And that coal is certainly not 'captive' as both the UP and BNSF compete for most of the business.

Ken Strawbridge

[MichaelSol]

QUOTE: Originally posted by n012944
Funny, I have seen it argued many times that most coal shippers/utilities are captive shippers, however this artical that Dave posted seems to dissagree with both you and Dave. From the artical "coal haulage provides the LEAST amount of return on capital expenditures." How can that be?

So then why did you say they are investing where they get the higher rates of return?

"Those big bad mean railroads, how dare they put more of THEIR money into the area with higher returns."

Not following your argument here .... it looks like you want to argue about something, I just can't tell what it is ...

[MichaelSol]

Not sure anyone wants to get into an argument with Dustin Bleizeffer, the energy reporter for the Casper Star-Tribune, but why don't you just go to the BNSF Annual Report, for instance, and look at the carload revenue breakdown for coal, ag, intermodal, etc. and see what it says?

Then you would at least have some numbers to start from instead of relying on Dustin Bleizeffer, energy reporter for the Casper Star Tribune, for your information about railroad rates.

[n012944]

QUOTE: Originally posted by futuremodal

Predictably, BNSF is trying the strong arm/blackmail approach to try and reign in support of coal producers for proposed rail legistlation aimed at addressing the captive rail shipper inequity..........

From the Casper Star-Tribune:

Railroad warns against more regulation

By DUSTIN BLEIZEFFER
Star-Tribune energy reporter

. The company gets a much better rate of return on capital spent on hauling consumer goods -- a market that is rapidly expanding.

Consumer goods= stuff shipped on TOFC or COFC, most of which are not captive customers. Waiting for the spin from the lovely PNW.

Bert

[MichaelSol]

Well, your statement was "how dare they put more of THEIR money into the area with higher returns."

Which is it? They get the highest rates of return, or the lowest?

[n012944]

QUOTE: Originally posted by MichaelSol

The highest returns are where the captive shippers are,

Funny, I have seen it argued many times that most coal shippers/utilities are captive shippers, however this artical that Dave posted seems to dissagree with both you and Dave. From the artical "coal haulage provides the LEAST amount of return on capital expenditures." How can that be? According to the conspiracy theorists in the PNW, railroads are Uncle Moneybags in the game of Monopoly when it comes to coal, but yet coal provides the LEAST amount of return. I have seen it argued that the only way to ship coal economicly is rail, so if the whole monopoly theory is correct, along with Michael's capptive shipper line at the top of this page, coal should be giving the highest rate of return.


Bert

[MichaelSol]

The highest returns are where the captive shippers are,

[n012944]

QUOTE: Originally posted by futuremodal

Predictably, BNSF is trying the strong arm/blackmail approach to try and reign in support of coal producers for proposed rail legistlation aimed at addressing the captive rail shipper inequity..........

From the Casper Star-Tribune:

Railroad warns against more regulation

By DUSTIN BLEIZEFFER
Star-Tribune energy reporter

MORAN -- A railroad official warned Wyoming mining leaders Thursday that efforts to persuade Congress to better regulate rail rates could convince railroads to shift capital spending away from expanding coal delivery capacity -- a key component to growing Wyoming's coal mining industry.

"If they cap our ability to raise our revenue, then we will pull capital out of this business, very quickly," said Steve Robb, group vice president of BNSF Railway's coal business unit.

Robb spoke to a roomful of miners attending the Wyoming Mining Association's annual convention here at Jackson Lake Lodge this week.

Robb recommended that mine industry leaders ask their congressional representatives to back away from "re-regulating" the rail industry. He said although coal haulage makes up a significant portion of BNSF Railway's business, it provides the least amount of return on capital expenditures. The company gets a much better rate of return on capital spent on hauling consumer goods -- a market that is rapidly expanding.

Wyoming's 400 million tons of annual coal production is widely distributed among 36 states in the nation to fuel electrical generation plants. The rail industry has been under significant scrutiny this past year due in part to interruptions and increased demand for coal which left many utilities shortchanged of Powder River Basin coal.

Utilities have also raised concerns that rapidly rising shipping rates may not be based on real costs of services, and that many utilities are "captive" customers served by only one rail company.

In an interview Thursday, Wyoming Rural Electric Association Executive Director Shawn Taylor took issue with Robb's comments concerning shipping rate regulations. Taylor said utilities are not asking that the rail industry be re-regulated.

"We need the railroads, and we want them to thrive and be successful," Taylor said. "But we want assurances on delivery, fair and transparent rates and accountability."

Taylor cited an ongoing case between BNSF Railway and Basin Electric Power Cooperative. When Basin's 20-year rail delivery contract for its Laramie River Station power plant near Wheatland -- a "captive" BNSF Railway customer in eastern Wyoming -- expired, BNSF Railway allegedly tripled its rate. Basin has asked the federal Surface Transportation Board for relief, but BNSF Railway maintains it is not gouging.

The rail industry's shortfall in coal deliveries has also left Laramie River Station with only a week's worth of reserves in recent months, which could lead to reduced electrical generation and higher utility costs to Wyoming customers.

Robb said BNSF Railway has already spent millions of dollars to expand export capacity out of the Powder River Basin. The railroad will spend $167 million to expand capacity this year and plans to spend hundreds of millions more with Union Pacific to ramp up capacity on their jointly owned main line south out of the basin.

The railroads expect they will meet anticipated demand to ship 425 million tons of coal annually on that southern line alone by 2009.

"That's a big number, and it's going to require us to build a lot of railroad," Robb said. "We are spending the money today because we think we can get those returns where they need to be."

Those big bad mean railroads, how dare they put more of THEIR money into the area with higher returns.[}:)]

Bert

[TomDiehl]

Well, at least the article told both sides of the story, even though Dave can still only see one side. [}:)]

QUOTE: Originally posted by futuremodal

Predictably, BNSF is trying the strong arm/blackmail approach to try and reign in support of coal producers for proposed rail legistlation aimed at addressing the captive rail shipper inequity..........

From the Casper Star-Tribune:

Railroad warns against more regulation

By DUSTIN BLEIZEFFER
Star-Tribune energy reporter

MORAN -- A railroad official warned Wyoming mining leaders Thursday that efforts to persuade Congress to better regulate rail rates could convince railroads to shift capital spending away from expanding coal delivery capacity -- a key component to growing Wyoming's coal mining industry.

"If they cap our ability to raise our revenue, then we will pull capital out of this business, very quickly," said Steve Robb, group vice president of BNSF Railway's coal business unit.

Robb spoke to a roomful of miners attending the Wyoming Mining Association's annual convention here at Jackson Lake Lodge this week.

Robb recommended that mine industry leaders ask their congressional representatives to back away from "re-regulating" the rail industry. He said although coal haulage makes up a significant portion of BNSF Railway's business, it provides the least amount of return on capital expenditures. The company gets a much better rate of return on capital spent on hauling consumer goods -- a market that is rapidly expanding.

Wyoming's 400 million tons of annual coal production is widely distributed among 36 states in the nation to fuel electrical generation plants. The rail industry has been under significant scrutiny this past year due in part to interruptions and increased demand for coal which left many utilities shortchanged of Powder River Basin coal.

Utilities have also raised concerns that rapidly rising shipping rates may not be based on real costs of services, and that many utilities are "captive" customers served by only one rail company.

In an interview Thursday, Wyoming Rural Electric Association Executive Director Shawn Taylor took issue with Robb's comments concerning shipping rate regulations. Taylor said utilities are not asking that the rail industry be re-regulated.

"We need the railroads, and we want them to thrive and be successful," Taylor said. "But we want assurances on delivery, fair and transparent rates and accountability."

Taylor cited an ongoing case between BNSF Railway and Basin Electric Power Cooperative. When Basin's 20-year rail delivery contract for its Laramie River Station power plant near Wheatland -- a "captive" BNSF Railway customer in eastern Wyoming -- expired, BNSF Railway allegedly tripled its rate. Basin has asked the federal Surface Transportation Board for relief, but BNSF Railway maintains it is not gouging.

The rail industry's shortfall in coal deliveries has also left Laramie River Station with only a week's worth of reserves in recent months, which could lead to reduced electrical generation and higher utility costs to Wyoming customers.

Robb said BNSF Railway has already spent millions of dollars to expand export capacity out of the Powder River Basin. The railroad will spend $167 million to expand capacity this year and plans to spend hundreds of millions more with Union Pacific to ramp up capacity on their jointly owned main line south out of the basin.

The railroads expect they will meet anticipated demand to ship 425 million tons of coal annually on that southern line alone by 2009.

"That's a big number, and it's going to require us to build a lot of railroad," Robb said. "We are spending the money today because we think we can get those returns where they need to be."

[Mookie]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Mookie

Dave - I am not sure what you mean by a capacity crunch. If you mean at the power plants - none that I am aware of. But my info comes from what I read in the paper.

Help me out here.

Mook

Railroad capacity cruch = not enough capacity to meet demand.

If you read Michael Sol's post, you might begin to understand why holding on to capacity through the lean years would have been the least costly option compared to having to add that lost capacity now. Which might explain why the railroads are wanting the feds to provide some finacial aid for capacity expansion.

As I said before - I am not well-versed on all this, but from what I know - we have the capacity railroad-wise. We have the capacity power plant-wise.

I have read that the power plants are not happy about the service and rate increases.

But - and I don't know - if the railroads had held onto the extra capacity through the lean years, would they really use it now to increase capacity. Isn't this akin to keeping your old car for 50 years and hope someday to drive it again? And I am not sure that what the railroads gave up in Nebraska was worth hanging onto in the first place. Seems like at one power plant - it was built after most of the railroads had left Nebraska.

Maybe someone has a better grasp on history than I do and can help us out.

Mook

[Anonymous]

Predictably, BNSF is trying the strong arm/blackmail approach to try and reign in support of coal producers for proposed rail legistlation aimed at addressing the captive rail shipper inequity..........

From the Casper Star-Tribune:

Railroad warns against more regulation

By DUSTIN BLEIZEFFER
Star-Tribune energy reporter

MORAN -- A railroad official warned Wyoming mining leaders Thursday that efforts to persuade Congress to better regulate rail rates could convince railroads to shift capital spending away from expanding coal delivery capacity -- a key component to growing Wyoming's coal mining industry.

"If they cap our ability to raise our revenue, then we will pull capital out of this business, very quickly," said Steve Robb, group vice president of BNSF Railway's coal business unit.

Robb spoke to a roomful of miners attending the Wyoming Mining Association's annual convention here at Jackson Lake Lodge this week.

Robb recommended that mine industry leaders ask their congressional representatives to back away from "re-regulating" the rail industry. He said although coal haulage makes up a significant portion of BNSF Railway's business, it provides the least amount of return on capital expenditures. The company gets a much better rate of return on capital spent on hauling consumer goods -- a market that is rapidly expanding.

Wyoming's 400 million tons of annual coal production is widely distributed among 36 states in the nation to fuel electrical generation plants. The rail industry has been under significant scrutiny this past year due in part to interruptions and increased demand for coal which left many utilities shortchanged of Powder River Basin coal.

Utilities have also raised concerns that rapidly rising shipping rates may not be based on real costs of services, and that many utilities are "captive" customers served by only one rail company.

In an interview Thursday, Wyoming Rural Electric Association Executive Director Shawn Taylor took issue with Robb's comments concerning shipping rate regulations. Taylor said utilities are not asking that the rail industry be re-regulated.

"We need the railroads, and we want them to thrive and be successful," Taylor said. "But we want assurances on delivery, fair and transparent rates and accountability."

Taylor cited an ongoing case between BNSF Railway and Basin Electric Power Cooperative. When Basin's 20-year rail delivery contract for its Laramie River Station power plant near Wheatland -- a "captive" BNSF Railway customer in eastern Wyoming -- expired, BNSF Railway allegedly tripled its rate. Basin has asked the federal Surface Transportation Board for relief, but BNSF Railway maintains it is not gouging.

The rail industry's shortfall in coal deliveries has also left Laramie River Station with only a week's worth of reserves in recent months, which could lead to reduced electrical generation and higher utility costs to Wyoming customers.

Robb said BNSF Railway has already spent millions of dollars to expand export capacity out of the Powder River Basin. The railroad will spend $167 million to expand capacity this year and plans to spend hundreds of millions more with Union Pacific to ramp up capacity on their jointly owned main line south out of the basin.

The railroads expect they will meet anticipated demand to ship 425 million tons of coal annually on that southern line alone by 2009.

"That's a big number, and it's going to require us to build a lot of railroad," Robb said. "We are spending the money today because we think we can get those returns where they need to be."

[Anonymous]

QUOTE: Originally posted by Mookie

Dave - I am not sure what you mean by a capacity crunch. If you mean at the power plants - none that I am aware of. But my info comes from what I read in the paper.

Help me out here.

Mook

Railroad capacity cruch = not enough capacity to meet demand.

If you read Michael Sol's post, you might begin to understand why holding on to capacity through the lean years would have been the least costly option compared to having to add that lost capacity now. Which might explain why the railroads are wanting the feds to provide some finacial aid for capacity expansion.

[Mookie]

Dave - I am not sure what you mean by a capacity crunch. If you mean at the power plants - none that I am aware of. But my info comes from what I read in the paper.

Help me out here.

Mook

[rrandb]

As the numbers are increasing I would say fuller and more than just half. UP has embargoed their sales dept from writing new coal contracts untill they improve capacity. An enviable position that many companies wi***hey were in. More customers than product. The RR's will catch up and reap the benifits of a planed expansion as opposed to excess capacity but not enough traffic.

[Anonymous]

QUOTE: Originally posted by Mookie

Without quoting the whole thing - thanks to Bob from VA and of course, Jay.

Bob - Since I lived through most of that time, I can now see what has happened through the years. I was here when it was CBQ/UP/CNW/RI and now it is BNSF around Lincoln with just a touch of UP. Most of that is even gone and they use the BNSF yards. We are just cut-through country with great rest stops in Lincoln and North Platte.

And to tie in with Jay - he confirmed what I suspected. Trucks didn't move the coal - the trains did.

I hate to wade through all that murky fluff (sorry Dave) to just get to a single point. That's why I had to narrow it down to a single point. We got that answered, now we can move on.

And Jay - today's paper says they are increasing our gas tax 1 cent to make up for all the conservation of fuel. ( we will now be # 7 in the nation) Our roads will suffer because we are conserving fuel!!!!

May I borrow your shovel that you used for digging up facts and hit myself in the head with it?

Mookie

For the record, my example was shorter and less convaluted than Bob's, but apparently he touched a nerve of familiarity with you.

Question: Is there a capacity crunch where you live?

As for Jay's coal numbers, remember those "increases" are still below the contracted levels, and deliveries are short of demand. Glass half full or glass half empty?

[Mookie]

Without quoting the whole thing - thanks to Bob from VA and of course, Jay.

Bob - Since I lived through most of that time, I can now see what has happened through the years. I was here when it was CBQ/UP/CNW/RI and now it is BNSF around Lincoln with just a touch of UP. Most of that is even gone and they use the BNSF yards. We are just cut-through country with great rest stops in Lincoln and North Platte.

And to tie in with Jay - he confirmed what I suspected. Trucks didn't move the coal - the trains did.

I hate to wade through all that murky fluff (sorry Dave) to just get to a single point. That's why I had to narrow it down to a single point. We got that answered, now we can move on.

And Jay - today's paper says they are increasing our gas tax 1 cent to make up for all the conservation of fuel. ( we will now be # 7 in the nation) Our roads will suffer because we are conserving fuel!!!!

May I borrow your shovel that you used for digging up facts and hit myself in the head with it?

Mookie

[rrandb]

QUOTE: Originally posted by MichaelSol

The Boeing example is not an R&D cost. Aircraft such as the A-380 require 250 sales to break even, before the company begins to make money (Airbus). The plane was designed in 2003 and 2004. That will probably be in 2013-2014, if at all. The planning is extraordinarily long term. Production capacity is planned out 10, 15, 20 years in advance with the idea that profit might occur in the 12, 14th year, maybe later. .

You could not be further from the mark than with Boeing. I installed DOD reg.(classified) access controls for their offices in No VA. A huge share of there income is from government contracting and I do not just mean Military planes. The profits from comercial work is icing on the cake. There ROI on R&D puts the RR's to shame. It's Airbus Industries that has put all it's egges in one basket with the A-380. Their bankers are already nervous with the current production delays and threatned cancelation of orders and they are a gov. sponsered affair. How many Gov. contracts do the RR's rely on other than AMTAK. NONE Try again.

[jeaton]

After 10 pages of arguing back and forth, I thought it would be interesting to go back to the original post and just drop in some numbers about coal production and shipments.

We know that the situation developed from the problems the UP and BNSF had with the track out of the PRB during spring, 2005. The very unusually high rain falls last year softened the road beds causing derailments and with the need to resurface and repair the track, the number of daily trains out had to be significantly reduced. While the problem came because of unforseen weather, the utilities and others have argued that the railroads should have been prepared with additional trackage over alternate allignments into the mines, by doing something to sweep up or keep the coal dust out of the ballast which contributed to the problem, and even keeping trackage and routes that were torn up 30 or 40 years ago when the PRB coal was considered only slightly more useful than dirt.

Of course we know that electric utilities have had brown outs and black outs, but those situations have been caused by weather conditions-heat waves and lightening strikes-so how could they be prepared for that?

With all the screaming and nashing of teeth, you might think we have all been freezing (or boiling) in the dark. Let's see just how bad it was. Here are the Wyoming production numbers for 2001 to 2005. (Million Tons) Source: US Government Energy Information Administration April 2006

2001 --- 368.7
2002 --- 373.2
2003 --- 376.3
2004 --- 396.5
2005 --- 406.4

I suppose I could be wrong, but unless some trucks were hauling coal from the mines in the dark of the night, those numbers are also the rail tonnage for the year. If I am right, in spite of the problems, it looks like the UP and BNSF actually hauled 10 million more tons in '05 than '04.

One might also note a big 20 million ton increase from '03 to '04. Here are the Electric Power coal consumption numbers for the same 5 years. 964.4, 977.5, 1,005.1, 1,016.3, 1,039.0. Do you suppose that there is any correlation between the increase in the coal burn and the increase in natural gas price? Not to say that the recent extensive construction of natural gas fired generation stations has had anything to do with gas prices.

Any Questions?

[rrandb]

QUOTE: Originally posted by Mookie

Dave - I am never coy. I am sweet at times, but never coy. But I admit in print - I am completely out of my league on 99% of the postings on this forum. And this is no exception. It is just that when you want to attack someone, you do it immediately. When I ask a question, it gets kicked to the curb for awhile.

I can't take long, convoluted explanations. I need short and simple answers. Little bits and bytes at a time.

Can you do that? I have no agenda - frankly as long as the trains run in my area, I don't care if they haul cow poop. But I do question items from time to time and a short two sentence answer would suffice.

I will treat you like a gentleman as long as you treat me like a lady. If you don't, then the reflection will be on you, not me.

Mookie

[#welcome] Welcome to the Bowling League. Watch out as it's not just the balls that can get you but some times the pins can go flying as well. [:-^]

[bobwilcox]

QUOTE: Originally posted by Mookie

I think my coal car got dumped!

Let me re-rail your car.

I am going to talk about why, based on my book learning and experience, Nebraska got a lot of excess railroad capacity which then got scrapped. Most of my book learning came while earning a transportation degree at the University of Tennessee and independent study since then over the last 40 years. My experience concerning Nebraska came from working with fertilizer and chemical shippers served by the Rock Island, Northwestern and UP. I beleve I testified for the C&NW in all of the ICC abandoment proceedings on the once extensive network of branchlines extending out from Lincoln to Superior, Hastings, Wahoo, etc. These are just my thoughts and others may have their own opinions. I notice your ability to weigh posters contributions has increased greatly in the past few days.

The Model T on the asembly line went into production in 1914. That meant many people in NE could buy an automobile for the first time. The notice their roads were very poor and insisted the Unicamral provide good roads. Their elected officials deleverd and people sone abandoned the mixed train into Lincoln for their new Model T. People like cars because you were not tied to the railroads schdule and you could drive from your home to your destination. On the train you had to go to the depot, wait for the train and at destination figure out a way to get from the depot to your destination in Lincoln. The loss of this business was so bad by the 1930s that it caused railroads like the Burlingtion to figure out ways to get the business back with lower fares and faster schdules. They called it the Zepher!

The same thing happenend in frieght for much the same reasons after the end of WWII. It was a lot cheaper and faster to move livestock from the farm to the Omaha market when compared to driving the cattle to a stock pen and then loading them on the stock cars to Omaha.

In these cases the traffic went from rail to truck because the truck, on those new highways,. was cheaper and faster. However, in the North Eastern part of the US entire industries stopped shipping by rail or truck. The caught the last train to the Coast. As an example, before WWII, GM supplied their California customers from Michigan. In the ten years after WWII GM build several assembly plants in CA. The GM rail movements of automobiles from Michigan to California stopped.

The big problem the railroads had was they could not dump the mixed train from Hastings to Lincoln or the branchline no one shipped cows on anymore in a timley fashion. In the early 1970s if you filed an abandoment case with the ICC that had no oppostion it would take two years to get abandoment the abandoment approved. If you filed on a line with a cash flow loss and their was opposition it would take three to five years to get a decision. Often the railroad would lose those cases. If you had a postive cash flow you could not get an abandoment approved. These rules changed with a lot of new case law, the collapse of the PC and finally the Staggers Act. In the meantime railroads like the Rock Island were put our to business.

During the 1970s the succesful railroads in the Midwest were the ones that managed to stay in operation with spit and bailing wire. Adequate profits were something far over the horizon. Because these railroads were so desperate for cash from any sorce they could seldom hold on to a line to see if it might have some future potental. One case was the Northwstern holding on to the line from Chadron to Fremont as they figured out how to handle coal from the Powder River Basin. When the finally decided to work with the UP the line was abandoned. Some other railroads with more financial strength, such as the Southern, were able to rail bank lines and see it they held potental for the future. When you do this the first thing you do is do to the taxman and have the taxes dropped way down since it is no longer an operating business but just idle land.

I hope that helps.

[Murphy Siding]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Mookie

Dave - I am never coy. I am sweet at times, but never coy. But I admit in print - I am completely out of my league on 99% of the postings on this forum. And this is no exception. It is just that when you want to attack someone, you do it immediately. When I ask a question, it gets kicked to the curb for awhile.

I can't take long, convoluted explanations. I need short and simple answers. Little bits and bytes at a time.

Can you do that? I have no agenda - frankly as long as the trains run in my area, I don't care if they haul cow poop. But I do question items from time to time and a short two sentence answer would suffice.

I will treat you like a gentleman as long as you treat me like a lady. If you don't, then the reflection will be on you, not me.

Mookie

Fine with me. In return, I would ask that you don't "pull a Murphy" and chime in with the usual suspects when the next insult barrage begins.

[(-D] Several months back, another poster, whose opinion I respect, e-mailed me, and asked that I be a little easier on you Dave. I took that as a sign. If, you feel I am somehow ganging up on you, that is a misperception, and for that I do apologize.
That being said, I'm here to discuss and learn about trains, and railroads, and such. Seeing how we often have diverging opinions on things, it seems natural that we'll be discussing many things in posts to come. As far as junior high games? I'm not interested.[:p]