NCTA Issue 1, 2015 by National Coal Transportation Association

ISSUE 1 | 2015

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Contents

ISSUE 1 | 2015

52 24

PUBLISHED BY: National Coal Transportation Association 4 W. Meadow Lark Lane Suite 100 Littleton, CO 80127-5718 Phone: 303-979-2798 Fax: 303-973-1848 www.nationalcoaltransportation.org Editor: Pat Scherzinger Phone: 303-993-7172 scherzinger@ nationalcoaltransportation.org Production By: Suckerpunch Creative Inc. info@suckerpunch.ca www.suckerpunch.ca

FEATURES

DEPARTMENTS

Meet Your Board: Jim Henry

Member Directory: Railcar Leasing

Message from the NCTA President – Jerry Wess

Message from the NCTA Executive Director – Tom Canter

NCTA Membership Benefits

NCTA Welcomes New Members

NCTA Committee Updates

Calendar of Events

Members Sound Off

View from the Caboose

Membership List

Index to Advertisers

Westshore Terminal

STB Customer Assistance Program

Meet Me at the O&M

AAR Rule Changes for 2015

Jurisdictional Clash on Dust Mitigation: STB vs EPA

2014 NCTA Scholarship Recipients

NCTA Visits Washington

Reflections: Steve Sharp

CONFERENCES

2014 Fall Meeting & Conference Recap

2015 O & M Conference Announcement

Denver, Colorado, September 15-17, 2014

Pinehurst, North Carolina, June 8-10, 2015

Spring General Conference Preview

The opinions expressed by the authors of the articles appearing in the Coal Transporter are those of the respective authors and do not necessarily reflect the opinion of the NCTA, its Board of Directors or its member companies. Publication of the articles does not constitute an endorsement of the views that may be expressed.

Litchfield Park, Arizona, April 26-29, 2015

COAL TRANSPORTER | 1

President’s Report / Jerry Wess

President’s Report

A Message from NCTA President, Jerry Wess.

Uncertainty to Continue in

U.S. Power Markets

write this column today to educate you about the present state of our coal industry. Steven R. Covey in his book, –“The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change says, “… to learn and not to do is really not to learn. To know and not to do is really not to know.” So, in the spirit of “know” here is the current situation in the energy industry, and how is it going to shape the near term future of the producers, consumers, and services provider members of the National Coal Transportation Association. In 2014 The U.S. Energy Information Administration (EIA) reported that domestic U.S. coal production was 994 MMst. EIA expects that annual production will decline in both 2015 and 2016, to 984MMst and 977 MMst, respectively. On the export coal topic, coal exports declined from 118 MMst in 2013 to 98 MMst in 2014. This 17% decline was caused by: • Slowing world coal demand • Lower international coal prices • Increasing coal output in other coal- exporting countries EIA expects no improvement in 2015, and global exports are projected to fall to 83 MMst. The U.S. energy industry in 2015 continues to have 1) cheap coal, 2) plentiful natural gas, 3) lots of domestic oil, and 4) a flourishing renewable fuels industry supported by federal government subsidies. Recently, the ICForecast Energy Outlook for the first quarter of 2015 was released. ICF International is a leading provider of consulting services and technology solutions for government and commercial clients. The most important findings from

2 | COAL TRANSPORTER

this first major energy outlook issued in 2015 by ICF International are:

Coal

• In 2015 coal-fired electric generation units will have continuing challenges as new regulations targeting power plant stack emissions will squeeze existing facilities. In the new fossil power generation area inexpensive natural gas will continue to be favored over coal. • In the short term coal units in the U.S. will continue to be dispatched for base load power, even though coal stockpiles are near ten year lows. • Longer term coal demand will remain flat despite 62 GW of coal generating unit retirements (including already announced unit retirements). This will occur because remaining plants will run at higher utilization factors. • EPA’s pursuit of the Cross- State Air Pollution Rule and focus on finalizing a Clean Power Plan will continue to put pressure on coal units. This impact will be amplified by the fact that natural gas prices are expected to remain low in the near term.

Natural Gas

• Marcellus and Utica shale plays, concentrated in Pennsylvania and Ohio, respectively, now accounts for nearly 255 of all U.S. gas production. • Consumption estimated to increase 1.4% annually through 2025; electric power sector to be 70% of this increase. • Lower oil prices are unlikely to have any effect on power sector gas, which remains the primary force behind longterm demand growth. • Production growth will also be driven

by exports via pipelines to Mexico and LNG terminals.

Renewables

• Will continue to expand in the future. • State laws will mandate a certain percentage of electricity from renewable sources. • Wind and solar will continue to dominate this market space, with market share penetration around 20% in 2040. Is there anything working in coal’s favor these days? Well, maybe the falling crude oil prices may work in favor of coal. Lower crude prices may slow down the oil and gas drilling activities in the U.S. If crude by rail shipments slow, then the Railroads should have more resources available to haul coal. This should improve transit times and coal delivery reliability to both the mines and power plants. We need to execute our 2015 business plans with the rather sobering information in this column. Let’s hope that (just maybe) delivered coal can establish a base price versus Henry Hub gas that will allow volumes and prices for coal to improve from current levels. The NCTA will be a valuable resource this year to help you navigate this difficult landscape. Please plan to support the organization by continuing your membership and attending the spring, summer O&M, and fall meetings. The Executive Director- Tom Canter and his staff will be fully engaged in committee activities, meeting planning, and government advocacy work. Let’s work to support an electric generation stack that burns the new normal of less than 1 billion tons of coal annually. s Best regards, Jerry

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Executive Director’s Message / Tom Canter

A message from the

Executive Director

t the time of this writing, I have just returned from our annual visit to Washington, D.C. with our Board of Directors and other leaders in NCTA. The current governmental overreach is troubling and maybe dire, but the possibility that common sense and the truth of physics and economics will prevail should give us hope. In any case, our industry must be realistic, but this does not encompass being defeatist. Coal remains the most abundant energy source for North America and coal does not suffer from significant pricing volatility based on weather and deliverability. It is simply foolhardy for a nation to eliminate or severely limit the option for coal as a source of affordable electricity generation. Even the Europeans are finally seeing that subsidizing “renewable energy” is not only penalizing the taxpayers and consumers of electricity, but is detrimental to sustainable economic growth and the standard of living enjoyed by a nation. Some manufacturing companies (read wealth creators) are relocating from Europe, and the various governments are reducing or dropping the subsidies for onshore and offshore wind generation. A casual observer of history can surely conclude that fossil energy has contributed to beneficial improvements in health, safety, lifespan, leisure time, education, and the very standard of living that we enjoy. Fossil fuel provides the stability in electrical power delivery for virtually all of our modern conveniences. The U.S.A. is about to give up progress for humankind by slavishly believing in the computer modeling of future climate based on garbage-in, garbage out (GIGO) and sketchy temperature monitoring. The well recognized scientific method is turned on its head with climate change theories and processes that are not 4 | COAL TRANSPORTER

observable, repeatable, or predictable. How did we get into such an Orwellian world of double speak and double think? Primarily, this occurred through bureaucratic regulators picking winners and losers based on their particular ideology. This would shock the framers of the Constitution who had just lived through a long period of despotic rule followed by the chaos of a poorly constructed confederation. The U.S. Constitution assuredly was designed and written in the hope that the federal government would only possess limited and prescribed powers and authority. Power emanated from God-given rights to the citizenry referred to as “We, the People” in the preamble. The Constitution grants only specific and limited powers to each branch of government by the people and the States to the federal government. The signers of the document placed their signature above the States they represented, and “this Constitution between the States” was ratified by the States. This limitation of granted power was, and is, so important that within two years of the writing of the Constitution, Congress found it advisable and necessary to add ten amendments. These first ten amendments known as the “Bill of Rights” have nine articles that specifically grant rights to the citizens and the States and proscribe certain behavior by the federal government. The Tenth Amendment is the capstone of the declaration of limitations on the federal government – “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved are reserved to the States respectively, or to the people.” A review of the structure of regulation may provide some elucidation. At the very beginning of the Constitution, in

Article I, Section 1; it clearly affirms “All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives”. Where did we go wrong? As commerce, communications, and relationships became complicated in the late 1800’s and thereafter, Congress delegated part of its authority by passing overarching legislation and allowing the interpretation to the courts and the implementation to the executive branch. This delegation of authority provided the possibility that non-elected bureaucrats may place their ideology above the dictates and letter of the law. For example, the legislators that enacted the Clean Air Act had never heard of “global climate change” at the time, but the ideology of the current administration with pressure from environmental activists have usurped legislative powers. The Supreme Court has affirmed this violation of the separation of powers. The EPA is now merrily regulating against the expressed intent of Congress and developing “legislation” with the force of law under the euphemistic name of the Clean Power Plan. The industry must encourage Congress to vigorously pursue its right of oversight of executive action and regulation and use the power of the purse. Further, the industry should take a page from the environmentalist’s playbook and litigate EPA’s abuse of authority to both delay and overturn its implementation. Summary: The Constitution is a document of limitations that specifically limits the federal government. Conversely, regulation by government limits the power of the People. Think about it. Have a safe day producing energy and wealth for the good people of North America. s

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Know Your Board / Jim Henry

Know Your Board:

Jim Henry

J James Henry Vice President AEP Energy Supply

6 | COAL TRANSPORTER

im Henry is Vice President of AEP Energy Supply (AEPES), American Electric Power’s unregulated commercial company. Jim is responsible for overseeing a talented team that manages AEPES’ fuel, consumables, transportation procurement, and the marketing of beneficial byproducts as well as the company’s extensive mineral interests. Recently the responsibility for marketing AEPES’ plant sites scheduled for retirement was added to his list of duties. Although the commercial company is smaller than AEP’s other regulated companies, the newly formed company burned over 16 million tons of coal and consumed over 53 BCF of natural gas in 2014. “One of the more refreshing changes since moving to the commercial side has been the ability to see exactly how the decisions we make every day impact our P&L, not to mention the enormous reduction in corporate meetings!” The only downside to the move has been getting used to the FERC regulations that limit the business related contact he has with people he worked with for decades on the regulated side. Jim was born and raised in the small town of Newark just east of Columbus, Ohio. The first person in his family to attend college, he received a bachelor’s degree in mining engineering from The Ohio State University in Columbus. Needing to work through college to make ends meet, Jim entered the engineering coop program at the university and procured a job at the Central Ohio Coal Company, one of American Electric Power’s (AEP) mining operations in Ohio. “All my family lives in Ohio. I was thrilled to get a coop job in Ohio where I thought the chances of that happening were slim to none, especially with a degree in Mining Engineer-

ing.” This experience provided him with several opportunities upon graduation and in the end he chose to continue his employment with AEP. Jim stayed at the Central Ohio Coal Company, late home of the “Big Muskie” dragline, for 12 years, working in several different areas of the mine, but for the most part within engineering. Jim’s journey through AEP took an odd turn in the mid-90’s when his father became severely ill. “My father owned and managed a parking lot stripping business that operated throughout the state of Ohio and when he got sick, my family found out that it could be terminal and that at the very least he would be unable to operate his business for several months. I went to the mine manager and asked if I could work 3-14’s per week which would allow me to work the other 4 days a week managing my father’s business. My brother was also able to cover 4 days per week, giving us a single day of overlap.” Jim believes that his drive and commitment to his family as well as his work opened a few eyes at AEP’s fuel headquarters and when a job came up during the later stages of his father’s illness, he was able to interview and secure the position. The job was effectively an executive assistant’s job for the head of AEP’s Fuel Procurement group. With the Clean Air Act starting to impact the mine that he worked at, he somewhat reluctantly chose to move down a different path in his career. “I absolutely loved working in the mine and I wasn’t one to wear a tie on a day to day basis.” Jim worked the next several years with his mentor, Pat O’Brien. “I learned so much under Pat. He was one to give you the ball and had you run with it, only calling in the plays as needed and I really liked that.” With the fuel group’s move to

“One of the more refreshing changes since moving to the commercial side has been the ability to see exactly how the decisions we make every day impact our P&L, not to mention the enormous reduction in corporate meetings!” Columbus around the millennium, Jim was able to move through the organization and in 2004 was put in charge of fuel procurement for AEP’s eastern fleet. Since that time Jim has primarily been managing fuel and fuel related assets in some form or manner, including a two year stint in overseeing AEP’s fuel assets which included railcar shops, preparation plants, a coal lab, coal terminals and lignite mines in the South. Jim became involved in the NCTA after being encouraged to do so by his former colleague and past NCTA board member Mike DeBord. “I had known about NCTA for many years as other AEP employees were very active participants.” After Mike’s retirement, Jim picked up where Mike had left off. “I was very impressed with the organization, and was pleasantly surprised after previous board stints, at how effective NCTA’s subcommittees were in providing real value to the membership.” Jim sees a lot of opportunity for the organization but also realizes with the shrinking of the coal industry the board will need to reevaluate the role that NCTA will play in the industry. Jim lives with his wife of 30 years, Kelley, in Gahanna, Ohio. They have

two teenagers, Jim and Megan. Jim says he’s keeping his fingers crossed during their teen age years. They are extremely active in numerous sports and band and Jim says, “Just keeping them in the right location during any part of the day is a full-time job.” The family enjoys traveling and boating on the Ohio River. Researching railroad history and then visiting local railroad sites is usually on the itinerary when they visit different parts of the country. Jim is an avid model railroader and rumor has it that his entire basement is living proof. A

huge fan of steam engines, Jim recently acquired a 1/8 scale steam locomotive that he plans on running on a friend’s track near his home. Jim claims, “All that my wife asks is that I don’t blow the thing up!” After more than 29 years with AEP, Jim hopes to retire from there, but not any time soon. But with the business changing as it is, both in the coal and the utility industries, Jim says, “Who really knows where any of us will be in 5 years; but I’m going to make the best of it, wherever I am.” s

COAL TRANSPORTER | 7

NCTA Member Profile / Railcar Leasing

Railcar Leasing O

ur railcar leasing company members are a hardy bunch. Sure, the bulk of their business is well planned, well executed, and stable. They will accommodate with ease what each individual customer needs. A customer may want a full service lease that includes maintenance, repairs, and inspections or maybe they just need a net lease and can handle everything else on their own. If a customer needs a bit of cash, they’ll even buy the customer’s cars and lease them back to them under a long term arrangement. The real warriors in this business are the ones that deal with the spot market for leased railcars. It is a feast or famine marketplace that can turn on a dime. Not only is demand affected by the price and availability of the underlying commodity, it is also impacted by how fast things are going in a circle. When the market is hopping and a deal gets done, there is no guarantee that the carriers will even put the set into service. On the flip side, when no one wants cars, finding a parking spot for something a mile long makes those shoveling out parking spots in Boston look like a bunch of amateurs.

GE Capital, Rail Services

GE Capital, Rail Services provides specialty financing with deep rail industry experience and a highly diversified equipment portfolio. A leader in the industry with over 100 years of experience, the company offers a variety of railcars as well as repair and maintenance services throughout North America. They provide railcar lending and leasing financial services for railroads and a number of industries, including agriculture, chemical and plastics, coal, minerals, packaging & forest products, and oil and gas.

8 | COAL TRANSPORTER

For more information, visit www.gecapitalrail.com or follow on Twitter@Rail_GECapital. You can also see GE’s ad on page 31 or contact Mark Strzala, Vice President Utility Sales at 708-384-5102 or mark.strzala@ge.com.

GATX

In North America, GATX owns, manages or has an interest in over 131,000 railcars and approximately 600 locomotives. With services ranging from finance and leasing solutions to quality service, maintenance and tailored training programs, GATX is a one-stop shop. For more information on GATX and all the products and services we offer, please visit our website www.gatx.com or contact Jay Leadingham, Vice President Rail Sales - 404-725-0594 or by email to jay.leadingham@gatx.com

The Greenbrier Companies

The Greenbrier Companies [NYSE: GBX], headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad and marine industries. We build new railroad freight cars in our four manufacturing facilities in the U.S. and Mexico and marine barges at our Portland, Oregon deep water site. We are the market leader in the design and production of intermodal, boxcar, gondola, tank car and covered hopper railcars. Our customers include railroads, shippers and leasing companies—partners who depend on us for innovative design, quality production and on-time delivery. In Europe, we build and refurbish railroad freight wagons through our operation in Poland. GBX also offers repair and refurbishment services on all railcar types through our joint venture called GBW Railcar Services, LLC. GBW owns and operates the largest independent repair shop network in North America with nearly 40 locations, including 15 tank car repair and maintenance facilities certified by the Association of American Railroads. GBX also sells reconditioned wheel sets and provides wheel services at 9 locations throughout the U.S. GBX has a lease fleet of nearly 10,000 railcars and perform management services for customers on approximately 245,000 railcars.

First Union Rail

First Union Rail, a Wells Fargo company, operates one of the largest and most diverse locomotive and full-service railcar leasing companies in North America. With over 100,000 railcars and 850 locomotives First Union Rail has a diverse fleet and lease products to keep your business on the right track. Our seasoned team of over 150 employees provides full-service, inhouse management, taking a team approach and staying focused on your business. For more information on First Union Rail’s fleet and services contact Richard Seymour, Vice President of Sales and Marketing: Richard.Seymour@WellsFargo.com

Mitsui Rail Capital

Mitsui Rail Capital is subsidiary of Mitsui & Co., Ltd. a leading trading and global investment company in Japan. We have an established global presence and one of the youngest diversified fleets at approximately 10,000 owned and managed railcars operating in North America. We offer both a full service and net operating lease structures for new and existing railcars and sale lease-back financing to suit a diverse range of customers. For more information on Mitsui Rail Capital contact Chris Gerber, Vice President of Sales and Marketing at 312-803-8851.

SMBC Rail Services

SMBC Rail Services offers full-service and net operating leases and financing alternatives for new and used railcars, sale leasebacks, as well as step-in lease financing to suit a diverse range of customers. Our diversified fleet of over 17,000 railcars serves various commodities and industries throughout the United States, Mexico and Canada. SMBC Rail Services LLC is a subsidiary of Sumitomo Mitsui Banking Corporation and is part of the Bank’s Financial Group and enjoys the benefits of being able to offer customers several leading services of the Financial Group like Corporate Lending, Project Finance, Global Trade Finance, Lease Finance, Cash Management and Foreign Exchange. For more information on SMBC Rail Services or Sumitomo Mitsui Banking Corporation please visit our website www.smbcrail.com or contact us at 1-888-4RAILCAR (1-888-472-4522).

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Trinity Industries Leasing Company

Trinity Industries Leasing Company (TILC) is a leading provider of comprehensive rail transportation services. A variety of leasing alternatives are available on either newly manufactured equipment or railcars from Trinity’s total lease portfolio of 75,930 cars. Included are rotary gondolas and Trinity’s proprietary line of Rapid Discharge® coal cars. TILC also offers management and administration services including rail fleet optimization, asset and inventory management, and railcar maintenance and repair. Sales and marketing activities for Trinity Industries’ railcar manufacturing and leasing businesses are coordinated under the trade name, TrinityRail®, providing a single point of contact for customers seeking rail equipment and services. For more information please visit www.trinityrail.com or contact 1-800-631-4420. For specific information on TILC’s coal portfolio, contact Sharon Karol at 214-589-2605. s

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NCTA 2014 Fall Conference / Denver, Colorado

NCTA 2014

Fall Conference Westin Downtown, Denver, Colorado September 15-17, 2014

he NCTA celebrated its 40th Anniversary at its annual Business Meeting and General Conference held September 15-17, 2014 at the Westin Downtown Denver. The theme of this year’s conference was fittingly, “Forty Years - Looking Back and Looking Forward.” In addition to a full agenda, participants enjoyed time to network at several hosted receptions and customer events. Lance M. Fritz, President and Chief Operating Officer of the Union Pacific Railroad gave the Keynote Address and shared his own first hand memories of the NCTA. On the opposite end of the spectrum, Vice Chairman Deb Miller of the Surface Transportation Board spoke at her first NCTA event and discussed her desires for changes at the STB. While we always endeavor to have a broad based list of topics and opinions, no one could recall a past meeting filled with such an Aussie influence. Dr. Basil Beamish, Managing Director at B3 Mining Services made his technical presentation on inhibited coal oxidation by phone from Brisbane. Dr. James Stevenson, Coal Director for IHS and Dr. Jim Orchard, Senior Vice President for Cloud Peak Energy discussed coal markets in East Asia and the Western United States respectively. Australia was one country that marched down the road of imposing a carbon tax, but the rising energy prices and the higher cost of living that resulted from the law made it very unpopular. What a surprise! In July, the newly elected government repealed the tax as promised.

While the Australians are ditching harmful regulations, here in America we can’t think of doing anything but passing new ones. Topics covered at this meeting included the little known ramifications of CO2 regulation on fuel procurement and a legal view of recent environmental regulations. On Tuesday afternoon, an expert panel was tasked with making a case of moral clarity for the beneficial use of coal. Throughout the world, energy produced by coal is bringing hundreds of millions of people out of poverty. Should we turn our backs on their real struggles based on projections of disaster generated by flawed and manipulated computer models? Panelists included moderator Amy Oliver Cooke, Executive VP of the Independence Institute; Betsy Monseu (American Coal Council); Stuart Sanderson (Colorado Mining Association); Jonathan Downing (Wyoming Mining Association); and Judy Colgan (Rocky Mountain Coal Mining Institute). And it wouldn’t have been much of a transportation conference without a bit more about transportation including an update on the service challenges on the BNSF; and a topic that has been around as long as the NCTA - railroad revenue adequacy. These and a host of other speakers and topics made this a memorable anniversary event. Our thanks go to all those who came out to help celebrate this milestone. Guests left with some coal energy “to go” in the form of a power bank for charging all their various electronic devices. s

2014 FALL SPONSORS AKJ | Nalco Associated Terminals Bowie Resource Partners Crown / GE Power & Water

10 | COAL TRANSPORTER

FreightCar America GE Capital Rail Services Global One Transport / CoalCap Progress Rail Services

SMBC Rail Services St. James Stevedoring TrinityRail Union Pacific Railroad

Spenser Pernikoff and Hayle Hertel

Benjamin Varner

Betsy Monseu, Jonathan Downing, Judy Colgan, Stuart Sanderson, Amy Oliver

Pete Wyckoff

Jim Gunther, Chip Heine, Ken Johnson

Bill Lyness, Emily and Linas Regis

Joel Cox and Cole Ferrin

James Cahalin, James Stevenson

Jeff Castellari, Leslee and Rod Richardson

Kim Hess, Joy Yarbourgh

Tyler Dickman

Jeff Zerkle, Mark Poepping

COAL TRANSPORTER | 11

NCTA Membership Profile / xxxx

Membership Criteria Membership in the association shall be open to entities that are producers or consumers of coal produced in North America and other entities which are interested in its transportation and related issues. Entities or their affiliates whose primary business is providing transportation of coal by rail, barge, truck, pipeline slurry, or any other mode shall not be eligible for membership. One individual from each member company is designated to act as its representative. However, any individual employed by the member may participate in association activities.

Classes of Membership Voting Members:

Actual or potential producers or consumers of coal shall be entitled to apply to become voting members of the association in accordance with provisions in the bylaws and policies adopted by the Board of Directors.

Associate Members:

Individuals or entities who are interested in the transportation of coal or related issues, but who do not otherwise qualify for admission as voting members, may seek admission as a non-voting member. Associate members may serve and be empowered by the committee chair to vote on committees, but shall not have the right to vote in general or special meetings of NCTA.

Honorary Individual Members:

For good cause shown including but not limited to exemplary and outstanding service to the NCTA, a former Designated Representative of a Voting Member may be appointed an Honorary Individual Member of the National Coal Transportation Association. Honorary members may serve and be empowered to vote by the committee chair on committees, but do not have the right to vote in general or special meetings of NCTA. Membership dues and registration fees and other assessments of NCTA may be waived for Honorary Individual Members.

Membership Benefits

Your company may belong to more industry associations than just NCTA, but no other association provides the unique combination of education and real world results that come from NCTA membership. The financial impact associated with the procurement and delivery of coal demands this focus. NCTA maintains a high level of national prominence and credibility by participating in hearings, workshops, and symposiums, coordinating with ad hoc coalitions, providing resource material for governmental agencies, negotiating and educating on issues of general membership concern with carriers. 12 | COAL TRANSPORTER

Conferences with Character

For three days in the spring and fall of each year, NCTA provides coal industry professionals with an exclusive opportunity to share their outlook and knowledge and to exchange ideas. NCTA conferences provide its members the opportunity to learn from the experiences of others with similar responsibilities and from outside experts in an open and noncompetitive environment. Think of the ideas you can borrow, the pitfalls you can avoid and the valuable insight you can give and receive. Members attend all conferences at a preferential rate.

Logistics and Planning Subcommittees

The Eastern and Western Logistics & Planning Subcommittees do much of the heavy lifting to solve problems with respect to the efficient operation of the coal delivery process. An important source of strength is the NCTA working committee system that is made possible by the dedication and expertise of our member representatives and the cooperation of the rail carriers. Each Logistics & Planning group meets at least twice annually. These working group meetings are open meetings and are free to attend.

Operations & Maintenance Subcommittee

For companies that do not have the resources, or have diminished resources to support company representation on industry and consensus-based technical panels, the O&M subcommittee helps to fill this gap. The annual conference program provides excellent information on new technologies and best practices for coal car design, maintenance, and repair.

Access to Railcar Leasing Exchange Board

NCTA members have exclusive access to a railcar leasing exchange board where excess train capacity can be posted for lease and where members can post railcar needs. With 86,000 private cars owned and operated by NCTA members, this is a good place to start when you need to adjust your capacity requirements.

Commitment to Education

Education is a hallmark of NCTA. NCTA educates its members through its annual conferences and publications. NCTA also

supports education through its scholarship program that awards scholarships to students in transportation at several major universities as well as to the dependent sons and daughters of employees of member companies.

Policy Insights

The Board of Directors continues to meet in Washington, D.C. each year to visit governmental agencies and other trade associations. Maintaining a presence in Washington enables NCTA to have input into federal policymaking and to better represent member concerns on federal issues. NCTA fosters relationships with key personnel and departments within the Department of Energy, the Department of Transportation, the Surface Transportation Board, the Federal Railroad Administration, and with various elected representatives. NCTA is an educational entity and does not officially lobby for or against legislation. However, we do actively participate in hearings and rulemaking proceedings of interest to our membership.

Communications

Through its ever growing web presence, NCTA communicates with the world about the coal industry and with NCTA member companies - linking potential customers to its members and linking its members to other useful Web sites throughout the Internet. A “Members Only” section provides detailed member contact information, valuable updates on current subcommittee initiatives, a railcar leasing marketplace and other items of interest exclusively to NCTA members. The conference archives date back to 2004, creating a virtual library of information on energy and transportation issues. The semi-annual Coal Transporter magazine focuses on getting to know people in the industry, as well as informing NCTA members and the coal industry as a whole of new and relevant events occurring within the organization. Membership in NCTA is a sound business decision with a solid return on investment and we look forward to serving you. A member company of the National Coal Transportation Association is not just another utility, coal supplier, rail equipment supplier, or coal related services organization. It is part of a tradition of excellence that through affiliation with NCTA, it signals exceptional commitment and obligation to the market, its customers and to the public.

Membership in NCTA is a sound business decision with a solid return on investment Annual Dues

The annual dues for membership in NCTA are $1,600 for Voting Members and $1,400 for Associate Members payable in January of each year.

Application for Membership

All entities or persons desiring membership in the association should apply using the online application or contacting the NCTA for a membership application. The application will include the name, principal business activity and business address of the applicant and the full contact information for the applicant’s proposed Designated Representative. Application forms, along with payment of the annual dues, should be returned to the Executive Director of the Association. The Board of Directors shall approve or disapprove all applications for membership and shall make a determination as to the class of membership into which the applicant shall be admitted. s COAL TRANSPORTER | 13

New Member Announcement

NCTA WELCOMES ITS NEWEST MEMBERS!

he board of directors of the National Coal Transportation Association is pleased to announce that the applications for membership in NCTA of the following coal industry participants were approved. They join NCTA’s existing member companies working every day through NCTA to foster the cooperation needed to resolve issues faced by coal consumers, coal producers, transporters, rail equipment manufacturers and services companies. A complete list of NCTA member companies can be found on our website: http://www.nationalcoaltransportation.org/ index.php/membership/current-members

Benefits of Membership • • • • • • • •

Focus on Coal Transportation Conferences with Character Logistics and Planning Subcommittees Operations and Maintenance Subcommittee Access to Railcar Leasing Exchange Board Commitment to Education Policy Insights Publications

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OREW Aerial View of Westshore Terminal Showing Berth One (Upper Right) and Berth Two (Upper Left)

hile Asian demand for western North American coal remains strong and is forecast to continue growing, sales to Asian export customers continues to be limited by West Coast terminal capacity. Westshore Terminals has over four decades of operation since its opening in 1970. The coal export terminal is located at Roberts Bank, Delta, British Columbia, some 32 kilometers south of downtown Vancouver and only 500 meters from the United States border, is part of Port Metro Vancouver. Westshore shipped a record 30 million tonnes in 2013, easily surpassing the combined total coal exports of all other Canadian facilities. Westshore is investing $275 million over the next five years to replace aging equipment and modernize the office and shop complex. The program began in 2014 and is scheduled to be completed in 2018. The phased project will ensure the terminal remains efficient and productive for at least another 40 years. Operating from a man-made island at Roberts Bank and opened in 1970, Westshore has a nameplate capacity of 33 million tonnes per year. The terminal expects to move between 31 million and 32 million tonnes of coal this year. Westshore ships mostly B.C.-mined metallurgical coal, but in recent years has shipped increasing volumes of thermal coal to Asian markets. Thermal coal mined both in the United States and Alberta accounted for about Coal shipments 30 per cent of shipments through Westshore in 2013. Starting in the 1st Quarter of 2014, the Terminal since its opening Infrastructure Reinvestment Project will bring a major rejuvenation to the site by demolishing the current office, in May, 1970 have warehouse and shop buildings and combining them into a new more efficient complex at the northern end of the 133totaled 750 million acre site. This will bring the administration, maintenance and operations personnel altogether in one location for the tonnes. first time. The modern new complex is scheduled to be occupied in mid-2015. But four of the oldest machines on site – the original three stacker-reclaimers and the shiploader serving Berth One - are showing their age, are gradually becoming less reliable, and will face major maintenance in coming years. Westshore has determined that the most cost effective solution is to replace the equipment with modern and more efficient machines. Westshore Terminals is owned by Westshore Investment Corporation and managed by Westar Management Limited on land leased from Vancouver Fraser Port Authority (VFPA). Coal shipments since its opening in May, 1970 have totaled 750 million tonnes. During this same period Westshore has unloaded 69,000 unit trains and loaded 8,800 ships.

Coal Shipments (Millions of Tonnes) Total

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

21.2

21.9

19.0

21.2

21.1

20.1

24.7

27.1

26.1

30.1

Capital Improvements

Environmental stewardship is always a high priority at Westshore. In 2013 the terminal completed a $14 million capital project to improve its dust suppression, water purification and recycling, air monitoring, and train surveillance. This was the most comprehensive environmental management upgrade in Westshore’s history. The work included: • • •

A new $8.5 million dust suppression system that saw the removal of its original 77 ground level sprays replaced with 94 higher efficiency sprays, and 12 new, 130-foot high water spray towers, A new $5.5 million water processing facility to provide enhanced treatment of water after its initial use by the spray equipment so that it can be cleared of solids and recycled, Two MAMUs (mobile air monitoring units) to be used to investigate any airborne particulate issues in the surrounding community using an independent science and technology firm, COAL TRANSPORTER | 17

•

A remote surveillance station which monitors inbound/outbound coal trains for coal dust.

To sustain existing coal throughput projections and current rated capacity of 33 million tonnes per year Westshore Terminals Limited Partnership (Westshore) approved a $275 million reinvestment in the coal terminal to replace 30 to 40 year old terminal equipment with modern efficient and reliable equipment. The Terminal Infrastructure Reinvestment Project (the Project) started in early 2014 with a completion date in 2017. The equipment upgrades will ensure Westshore continues to operate with the latest technology and environmental management systems, and will result in an overall reduction in operating emissions. Due to projected increases in reliability and capacity Westshore has estimated that the project could increase the terminal throughput capacity from 33 mt/yr to 36 mt/yr. This assumes the remainder of the coal chain can accommodate the 3 mt/yr capacity increase. The major components of the upgrade and replacement project

will include (by year): • Relocation and construction of a new consolidated office and shops building (2014-2015); • Removal of the office, shops, warehouse complex (2015); expansion of Row D coal stockpile on • the former footprint of office, shops and warehouse complex; • Replacement of shiploader on Berth One (2016); • Replacement of three stacker-reclaimers (2016, 2017, 2018); and • Conveyor upgrades (2017, 2018).

18 | COAL TRANSPORTER

Benefits of the upgrades and replacements include improved reliability, decreased noise levels, reduced potential for dust generation, and a reduced carbon footprint. Westshore will remain basically fully booked for capacity through 2014, 2015 and into 2016 (with a rated capacity of 33 million tonnes per annum) until such time as the $275 million new equipment upgrades are installed and become operational, and which will result in modest capacity improvements at the terminal, anticipated to commence in 2017 through early 2019.

Customer Base

The biggest coal customer both in terms of annual tonnage and coal mines supported is Teck Coal Limited. Canada’s largest diversified resources company, Teck produces coal from six mines that ship through Westshore: five British Columbia mines Coal Mountain, Elkview, Fording River, Greenhills, and Line Creek;

and Alberta mine Cardinal River. Teck’s loading contract for 19 million tonnes/yr expires 2021. Two Alberta mines, Coal Valley Resources’ Obed Mountain (2022) and Grande Cache Coal’s Grande Cache Mine (2022) round out the current Canadian customer base. Two U.S. mines, Cloud Peak Energy’s Spring Creek Mine, Montana (2013-2022) and Global Coal Sales’ Signal Peak Mine, Montana complete the customer base. For the past seven years, Cloud Peak has been delivering coal primarily to Asian utility customers from the Spring Creek Mine. As part of their delivered transactions for international customers, Cloud Peak has entered into long-term rail and terminal contracts. The point of sale occurs when the coal is loaded into

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customer vessels at the ocean terminal. Their international customers generally pay the cost of ocean freight. An integral part of Cloud Peak’s strategy is increasing terminal capacity on the West Coast. In February 2013, Cloud Peak announced a throughput option agreement with Stevedoring Services of America (SSA) Marine that provides Cloud Peak Energy with an option for up to 16 million tonnes of capacity per year through the planned dry bulk cargo Gateway Pacific Terminal at Cherry Point in the state of Washington.

Side by side trains line up for dumping at the twin tandem dumper facility. The laser scanner over the center of the track is used for position verification of the railcars.

for detour traffic. Currently, BNSF coal traffic needs to detour through Abbotsford, BC. Two or three trains per day would make their way through Langley and Abbotsford if a deal is finalized between SRY and BNSF. Construction on track and bridges south of the border requires BNSF to find a new route between Westshore Terminal and Burlington, WA to alleviate work blockages.

Tandem Dumper

The fully enclosed automated dumper station is controlled by one operator. It works twin rotary dumpers, each of which has an operating capacity of Terminal Throughput 6300 tonnes per hour. Upon Capacity arrival at the Terminal coal cars The peak shiploading capacity are unloaded by one of two is 7000 tonnes per hour at each dumpers, which rotate the rail of the two berths. Based on a cars without uncoupling them. storage capacity of 2 million The Terminal is equipped with tons the annual throughput a single rotary car dumper and capacity of the terminal is a tandem rotary car dumper Locomotive at the entry end of the new tandem 33 million tonnes; this will that unloads two cars at a dumper system installed by Metso in 2012. increase to 36 million tonnes time, and has been in operawhen the terminal infrastruction since 1984. Both dumpers are capable of unloading shorter aluminum rail cars, the tandem ture reinvestment project is complete. On the Terminal site, dumper having been converted in two stages (the second in 2008) there are over seven kilometers of conveyors that carry the coal to handle both aluminum and steel rail cars. Use of the shorter from the dumpers to one of the four stacker/reclaimers or to aluminum cars has become the industry norm since they have a one of two berths for loading onto a ship. The stacker/reclaimlarger individual payload, and can accommodate more cars per ers deposit the coal onto uncovered stockpiles. Stockpiled coal train than standard Canadian steel cars, which have been phased is segregated as to customer and specific type until such time as out of trains serving Westshore. This allows a unit train to carry it is loaded onto a ship, at which time the coal is “reclaimed”, or a greater volume of coal, which increases rail transit efficiency. picked up, by a stacker/reclaimer and transported by the conveyCanadian rail carriers CP and CN have increased train length to or belt system to a shiploader. Blending coal products together over 150 cars, and Westshore has successfully handled a substanis possible, and Westshore is able to blend varieties of coal either tial number of these longer trains. on a stockpile, on a conveyor belt or in a ship’s hold. The dumper can spray water on coal during rotary dumping Rail Service to suppress coal dust generation. The Terminal has also recently While Westshore has access to three railroads (CN, CP, and commissioned an empty–railcar treatment system to spray a BNSF), final access is over 40 miles of track controlled by BC surfactant into the empty cars to reduce the potential for dust Rail, a former railroad company that no longer owns railroad cars generation on the return trip to the mines. There is no thaw shed, or locomotives. BC Rail does, however, manage the CN lease of but the Terminal has a hammer mill for crushing large lumps of its rail bed and tracks. Its 20 employees supervise the inspection frozen coal. and maintenance of the track, terminal switching activities, and the dispatching of train traffic from the neighboring Deltaport Stacker-Reclaimer terminal. Westshore provides two loop tracks; one inside the Westshore has four stacker-reclaimers to service its stockpile other, so two unit trains can be handled on site at any given time. area of about 2 million tonnes. While the stockpile tonnages are The Southern Railway of British Columbia (SRY) is a Canaconstantly changing, they typically average about 1.1 million tons. dian short line railway operating in southwestern British ColumThe big machines operate two per stockpile line, taking the coal bia. The railway has interconnections with three class I railroads: from conveyors and the dumping station to storage on the stockCanadian Pacific (CP), Canadian National (CN) and Burlington pile. In reclaim mode the stacker-reclaimers scoop up the coal Northern Santa Fe (BNSF). While SRY does not normally figure from stockpile and send it by conveyors to waiting ships. There in a coal haul to Westshore, it may occasionally be called upon are over seven kilometers of conveyors that carry the coal from the 20 | COAL TRANSPORTER

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dumpers to one of the four (4) the Terminal is the first stacker-reclaimers or to one of loading to which Vessel has been three shiploaders for loading scheduled to load. onto a ship. The stackerBerth One is a deep-water reclaimers deposit the coal berth at the end of a causeway. It onto uncovered stockpiles. utilizes a single shiploader. Built Stockpiled coal is segregated in 1984, it is 350 meters long as to customer and specific and can accommodate a vessel type until such time as it is of 260,000 dwt and 22.9 meters Newer SR 44 commissioned in 2010 uses high presloaded onto a ship. Then the draft. It has a design capacity of sure sodium lights; the older machine in the backcoal is picked up by a stacker7,000 tonnes per hour. ground uses LED lighting. The new machines will all reclaimer and transported by Berth Two, located at one have LED flood lighting and local lighting for more end of the man-made island, was the conveyor belt system to a constructed in 1970. It uses two shiploader. effective lighting and minimizing light pollution. radial shiploaders. It is 263 meOne of the stackers has ters long and can handle a vessel an operating capacity of 7000 of 180,000 dwt and 20.8 meters draft. It too has a design capacity tonnes per hour, another has a capacity of 6500 tonnes per hour, of 7,000 tonnes per hour. and the remaining two have a capacity of 4500 tonnes per hour. At a projected additional 2-3 mt/yr of coal shipped Westshore is able to blend varieties of coal either on a stockpile, through Westshore terminals by 2017/2018, the total number on a conveyor belt or in a ship’s hold. of ships accessing the Terminal is expected to increase by approximately one ship every 12 days. However, the impact of this Berths projected increase in number of ship visits is offset by a reducWith two deep-sea berths, all-tide sailing, and the capability to tion in the need for queuing resulting from improved efficienhandle the largest dry bulk carriers in coal service, Westshore is cies at the Terminal. In many cases, a reduced need for queuing a reliable, fast and efficient world-class coal terminal. Inbound and lower queuing periods would eliminate the transit of ships vessels will generally be loaded in turn in order of arrival for the to and from the anchorage in English Bay, which would reduce designated berth at the pilot boarding station providing that (1) effective marine traffic in this portion of the Georgia Strait. they are ready in all respects to receive cargo; (2) all the cargo Studies suggest that lethal vessel strikes to whales are infrequent is available at the Terminal; (3) loading is in accordance with at speeds of less than 14 knots and are rare at speeds of less than instructions received from the shipper(s) and/or charterers; and ten knots. Considering the low speeds of typical coal vessels, any risk of marine mammal collisions associated with the project is considered to be negligible. s Dave Gambrel is a coal transportation consultant and writer for coal and mining industry magazines. He was senior transportation executive of Peabody Coal for his last 15 years with the company, and served on the DTA Management Committee for ten of those years. He was also advisor to the U.S. Coast Guard delegation to the International Maritime Organization’s Safety of Life at Sea Committee. He may be reached at bunkgambrel@earthlink.net

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Westshore is an enthusiastic participant in its community and has been since Day One over 42 years ago. It continuously looks for ways of helping a wide variety of worthy causes. Over the years these have included sponsorship and other support for: • • • • • • • •

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2015 Spring Conference / Preview

NCTA 2015 Spring Conference

April 26 -29 th

Wigwam, Litchfield Park, Arizona

n the 40th Anniversary Member Sound-Off Survey, Arizona was identified as members’ favorite conference destination. So we will start the next 40 years off by making some new memories in the Grand Canyon State. While the NCTA can boast of being 40, this year’s Spring venue, the Wigwam in Litchfield Park, Arizona, is more than twice as old. The Wigwam was originally built in 1918 as a gathering place for the Ohiobased executives of the Goodyear Tire & Rubber Company who discovered that long-staple cotton extended the life of its tires. The West Valley of Phoenix proved to be not only a prime location for growing cotton, but also an ideal spot for management to vacation with their families in the winter. Today’s Wigwam is quite different from the days when guests were given a horse along with their room key in order to get around the sprawling grounds. Its 440 lushly landscaped acres contains four swimming pools, a 9,300-square-foot outdoor plaza featuring numerous dining options, an indoor/outdoor bar, lounge areas, and entertainment venues. The property has 54 holes of championship golf, including two of the state’s four courses designed by Robert Trent Jones, Senior. Guests are also allowed access to two courses at the Biltmore Country Club. Other amenities include a pro tennis facility, featuring nine-illuminated courts and a stadium court, fitness center, and a Red Door Spa. The conference will cover the state of the coal supply, electric utility, rail carrier, and barge industries as viewed by top management. At press time all the speakers on the agenda had yet to be confirmed so see the NCTA website for details. In addition to the formal program there will be ample time for networking. The conference will open with a reception Sunday for early arrivals. The 19th annual golf tournament will be held Monday afternoon on the Gold course. The Monday evening dinner is always an enjoyable event complimented by local entertainment. Tuesday and Wednesday mornings will be plenary sessions with special breakout sessions on Tuesday afternoon.

REGISTRATION

Registration is required for each attendee at the NCTA Spring Meeting. The fee is $625.00 for attendees representing a member company and $825.00 for all other attendees when registering prior to April 3, 2015. After April 3th, an additional $50 fee will apply for all late registrants. All registrations by a nonmember 24 | COAL TRANSPORTER

company for more than three individuals will be registered at the member rate. There is a fee of $85.00 for spouses and guests attending the dinner on Monday evening. The fee to participate in the 19th Annual NCTA Golf Tournament is $120.00.

ACCOMMODATIONS:

The Wigwam’s 331 spacious guest casitas and suites showcase traditional adobe architecture and southwestern ambiance. Each guest room features a personal terrace or patio overlooking a golf course, rose garden or a sparkling pool allowing guests to enjoy the beautiful grounds. This year’s hotel insider tip for the Wigwam is “There’s an App for that!” There are actually two Wigwam apps to choose from – a general app that is like carrying the guest directory around in your phone (although surprisingly no resort

Sunday, April 26 5:30pm - 6:30pm

map) and the Wigwam Golf app that is much more interactive. It includes instant tee time reservations, GPS course positioning to help plan your shot, a digital scorecard, and a range finder.

RESERVATIONS: (623) 935-3811 or (800) 327-0396 ROOM RATES PER DAY: $200.00/day Single/Double Room Room rates do not include state and local taxes or the resort fee of $10/day. The Resort Fee provides fitness center access, guest room internet, self-over-night parking, lobby business center, local and toll-free calls. The block cutoff date for guaranteed reservations is April 6th. The Wigwam is located at 300 Wigwam Boulevard, Litchfield Park, Arizona 85340, just 20 minutes west of downtown Phoenix and Sky Harbor International Airport. s

Tuesday, April 28 Welcome Reception for Early Arrivals

Monday, April 27 8:00am - 11:30am NCTA Board of Directors Meeting 12:30pm - 5:00pm Golf Tournament – Gold Course 4:00pm - 6:00pm Registration 7:00pm - 9:30pm NCTA Dinner and Entertainment

6:30am - 8:00am 8:00am - Noon Lunch 1:30pm - 5:00pm

Continental Breakfast General Session Individual Arrangement Breakout Sessions

Wednesday, April 29 6:30am - 8:00am 8:00am - Noon

Continental Breakfast General Session COAL TRANSPORTER | 25

Surface Transportation Board / Update

Surface Transportation Board Update

ast year, members of the Rail Customer Public Assistance (RCPA) office held several informal sessions around the country to listen to rail shippers’ concerns about rail service, one of which was at the NCTA meeting in Hilton Head. RCPA will attend again this year at the NCTA Spring Conference in Arizona. As in Hilton Head, the team will include both a transportation industry analyst and an attorney-advisor. Individual sessions are strictly confidential. To schedule a meeting time in advance, please contact Fred Forstall at 202-245-0241 or alfred.forstall@stb.dot. gov. Otherwise, RCPA staff will generally be available during the meeting and will have a sign-up sheet posted at an appropriate spot. The Board established the Rail Customer and Public Assistance Program to provide the public with informal

26 | COAL TRANSPORTER

access to agency staff and expertise, and to expand the opportunity for private-sector, voluntary resolution of rail operational and service-related issues. The office also answers questions pertaining to Board regulations and procedures. The Program has become one of the Board’s most successful forums for resolving problems experienced by consumers of railroad transportation service and others by:

dictional bounds. The Program’s staff has handled a wide range of inquiries from a variety of small, medium, and large shippers transporting regulated and unregulated commodities by rail. In addition to addressing problems between railroads and their customers, the Program staff also has resolved concerns arising between one railroad and another railroad, and has answered a broad array of inquiries from municipal, county, and state governments.

• Identifying and narrowing disputes between railroads and their customers; • Facilitating informal, privatesector dispute resolution, without litigation, wherever possible; and • Enhancing communication among rail transportation stakeholders and promoting rail-service improvements.

What types of issues do Program staff address?

Who may use the program?

Anyone who has a problem, question or concern falling within the Board’s area of expertise. Because the inquiries are informal, matters addressed are not strictly limited by the Board’s juris-

The Program’s staff has handled thousands of rail-customer matters of all types since the Program’s inception in November 2000, including: • • • • • • • •

Rates and other charges Employee concerns Car supply and service issues Demurrage claims Interchange issues Community concerns Claims for damages Informational needs

How does the process work?

The Program’s complaint-handling process typically begins when the agency receives a telephone call, e-mail or fax from, for example, a rail customer. A Program staff member will respond as quickly as possible, usually within 24 hours of receiving the inquiry. If necessary, Program staff will contact the customer initially to discuss the inquiry and obtain further information. Then, Program staff will assess the information the customer has provided and advise the customer as to what services the Program might be able to offer. Rail customers seeking assistance through the Rail Customer and Public Assistance Program can choose to: (1) seek guidance from Program staff without the involved railroad being contacted; (2) have Program staff contact the railroad without identifying the customer; or (3) permit Program staff to contact the railroad and identify the customer. In most situations, the customer gives Program staff permission to contact the railroad and reveal the customer’s identity. Whichever option a customer chooses to pursue, all customer communications with Board staff are kept strictly confidential unless the customer gives approval for staff to contact a railroad on the customer’s behalf. In response to a rail customer’s complaint, the Program’s staff typically will contact the railroad involved, outline the problem (either identifying the customer, or not, according to the customer’s wishes), and discuss the matter with the railroad.

Program staff will then determine if the customer’s problem can be readily resolved, or if some middle ground can be found that is mutually satisfactory to both the railroad and the customer. At this point, the staff member will communicate with all involved parties to seek to secure an informal solution to the problem. Because the Program is informal, Board staff cannot order a specific resolution or outcome through the Program, nor does the Office of Public Assistance, Governmental Affairs, and Compliance provide opinions or rulings on rail-customer matters. If a resolution cannot be reached, the parties always retain the right to bring a formal dispute before the Board in which the Program staff will not participate.

Contacting the Rail Customer and Public Assistance Program Customers are invited to contact the Board’s Office of Public Assistance, Governmental Affairs, and Compliance and its Rail Customer and Public Assistance Program by telephoning (202) 245-0238, or toll-free at (866) 254-1792; faxing to (202) 245-0461; or by e-mailing rcpa@stb.dot.gov. Additional information is provided on the agency’s home page, at www.stb.dot.gov s

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NCTA COMMITTEE

UPDATES

NCTA Committee work is at the heart of the Association. The committees provide valuable information and education to members, foster best practices, improve communications among the parties, and keep members up-to-date on new rulings and technologies. This is where members get payback many times over for their annual membership fees.

2015 NCTA Coal Forecast Schedule Forecast Month

Utility

Producer

Railroad

March

Thur Feb 26

Fri Feb 27

Mon Mar 2

April

Mon Mar 30

Tues Mar 31

Wed Apr 1

May

Wed Apr 29

Thur Apr 30

Fri May 1

June

Thur May 28

Fri May 29

Mon Jun 1

July

Mon Jun 29

Tues June 30

Wed July 1

August

Thur July 30

Fri July 31

Mon Aug 3

September

Fri Aug 28

Mon Aug 31

Tues Sept 1

October

Tues Sept 29

Wed Sept 30

Thur Oct 1

November

Thur Oct 29

Fri Oct 30

Mon Nov 2

December

Wed Nov 25

Mon Nov 30

Tues Dec 1

January

Tues Dec 29

Wed Dec 30

Mon Jan 4

Western Logistics & Planning

The Western Logistics & Planning Committee met on February 19, 2015 at the Hilton Lake Las Vegas in Henderson. WL&P Chairman Molly Mitchell (Peabody Energy) led the meeting with support from Vice-Chairman Jeff Zerkle (AEP). Will Cunningham of the BNSF provided an update on rail performance on the Joint Line. He also spent considerable time on the BNSF Capital Plan, focusing on those areas of the plan that will be beneficial to coal. The NCTA Coal Forecasting schedule was reviewed and is provided here for reference purposes. Beth Zeigler reviewed coal volumes moving out of the PRB and from Colorado/Utah on the Union Pacific.

28 | COAL TRANSPORTER

Dan Walsh, Kathy Brown, Gregg Simmons at the luncheon sponsored by Crown Products and Services.

Kevin Geraghty, NV Energy Vice President, Power Generation gave an informative rundown on existing solar installations and Nevadaâ&#x20AC;&#x2122;s solar future. Executive Director Tom Canter provided an update on the actions the Surface Transportation Board has taken to monitor rail performance. The day included with a brief Audience Response session where the majority of utilities reported seeing an improvement in service since the last meeting. Only 14% reported no improvement. The Western Rail Service Committees on Forecasting and Equipment Management gave brief oral reports. The day concluded with an outdoor networking lunch hosted by Crown Products and Services. The next meeting of the Western Logistics and Planning Committee is scheduled for July 9th in Chicago. s

Operations and Maintenance

Dennis Wanless (Xcel Energy) continues to serve as Chairman of the Operations & Maintenance Executive Committee. Carmen Sparks (Luminant) is Vice-Chairman. Harry Mullins (Southern Company) is the program committee chairman and is putting together the agenda for the 2015 Operations and Maintenance Conference, to be held at the Pinehurst Resort in Pinehurst, North Carolina. The committee continues to offer members great educational value through its series of webinars. In October, David East, Vice President of Engineering at Wabtec reported on the performance of M-976 truck components in coal service. Mike Edwards, President of iIRX, Adam Boyd, iIRX’s Vice President of System Development, and Jerry Barnaby, Railcar Fleet Manager for Western Fuels Association reviewed the important AAR Rule Changes for 2015 in a webinar held February 25. If you would like to make a webinar presentation or have an idea for one, please contact Gayle TenBrink (TrinityRail) who is chairing this educational outreach. Tom Sedarski (Amsted Rail Faiveley) is heading the technical review group within the O&M Committee. The committee has completed its work on a universal wheel removal template and has distributed the templates electronically to NCTA private car owners. If you have not received a copy of the template and wish to participate, please contact NCTA staff. The data collected will be collected by the NCTA and will remain owner anonymous in the resulting collective database. The goal is to identify trends and commonalities pertaining to wheel life and the study of the data may lead to solutions to reduce premature wheel change-outs and save fleet owners money. s

Car Type Aluminum Gondola Steel Hopper

Truck Type Super Service Ride Master Super Service Ride Control

Car Builder FCA/JTA Ortner

Year Built 2004 1984

Originating Carrier BNSF UP

Need help with the wheel template?

Contact any member of the Tech Review Committee. Tom Sedarski – Amsted Rail Faiveley tom.sedarski@faiveleytransport.com / 630-585-5152 Troy Smith – Consumers Energy troy.smith@cmsenergy.com / 517-788-1139 Jerry Barnaby – Western Fuels Association jerry@westernfuels.org / 307-682-8051 John Oswald – WE Energies John.Oswald@we-energies.com / 414-221-2619 Karl Von Norman - Transportation Services, Inc. kvannorman@tsi.com / 888-447-7503 Robin Andersen – Mitsui Rail Capital, LLC randersen@mrc-rail.com / 515-727-0107

Brake Shoe Type Standard Tread Conditioning

Terrain Flat Land Mountain

Applied Date Removed Date 7/1/04 3/5/08 5/9/06 10/4/11

Job Code of Removed Wheel 3336 3342

Mileage on Removed Wheel 358,998 445,985

WM 65 75

COAL TRANSPORTER | 29

NCTA COMMITTEE UPDATES Eastern Logistics & Planning

The most recent Eastern Logistics & Planning Committee Meeting was held March 4 at the CSX Curtis Bay Terminal in Baltimore, Maryland. Rail performance updates were provided by Mark Hamilton of Norfolk Southern and Jack Burgess of CSX. Featured speakers included Philip Syrrist of ICAP Shipping USA Inc., who spoke on ocean freight markets. He clearly demonstrated the need to maintain a good sense of humor in this extremely volatile market segment. Paul Loftus (Dinsmore & Shohl, LLP) introduced the group to the Inland Rivers, Ports, and Terminals

(IRPT) trade association and its many initiatives. Mark Czarnecki of AEP River Operations discussed trends on the inland waterways, highlighting the efficiency of moving freight by water and addressing the challenges of the aging lock inventory. Pat Scherzinger (NCTA) gave an update on the Association’s social media platforms, assuring the group they won’t be asked to “like us on Facebook” or “follow us on Twitter”. The NCTA does have a LinkedIn Group for members where items of interest are posted on a regular basis. Lunch was co-hosted by CSX Coal and Ore Terminals and Constellation

Lorenzo Jolley, Superintendent, CSX Coal & Ore Terminals

Mark Czarnecki. Edwin Fisher, and Debra Woltz 30 | COAL TRANSPORTER

Energy. CSX provided attendees with a driving tour of the facility. To read more about the Curtis Bay Terminal, see the article in Issue 2 2011 of the Coal Transporter which is available online. Our thanks go to CSX Coal and Ore Terminals for hosting this event. If you have agenda ideas or audience response questions for the next meeting please contact Chairman Edwin Fisher (Arch Coal), Vice-Chairman Terry May (Associated Terminals), or Program Chairman Michael Bailey (Peabody Energy). s

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NCTA COMMITTEE UPDATES Education Committee

The Education Committee administered the NCTA scholarship program with Mindy Watson-Ward (Cloud Peak) serving as Chairman. Randy Van Aartsen (We Energies) continues to serve as Vice-Chairman. In September of 2014, four scholarships were awarded to students who are children of employees of NCTA member companies. In addition, scholarships were awarded to one student each at the University of Wyoming, the University of Arizona, the South Dakota School of Mines and Technology and the University of West Virginia. To support the scholarship program, an opportunity to sponsor a hole at the 19th annual NCTA golf tournament is being offered. The tournament will be held on the Gold course at the Wigwam in Litchfield Park, Arizona in conjunction with the Spring Conference. s

To support the scholarship program, an opportunity to sponsor a hole at the 19th annual NCTA golf tournament is being offered.

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Call us today for solutions to your challenges in railcar supply and management.

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312-803-8880

APRIL 20–23, 2015 Rosemont’s Convention Center Chicago, IL Co-located with ELECTRIC POWER

PRB Coal Users’ Group 15th Anniversary Celebration Monday, April 20 • 5:00 – 9:00 PM Race to the ﬁnish line with Milka Duno as we round out 15 years! Talent, beauty and brains are just a few of the adjectives that can be used to describe race car driver Milka Duno — one of the most successful female race car drivers in the world today. Milka is also a qualified Naval Engineer with four master’s degrees — in Organizational Development, Naval Architecture, Aquaculture and Maritime Business — earning the last three degrees simultaneously. Sit back, relax and enjoy the ride with hot hors d’oeuvres, open bar, music, prizes, awards recognition and networking while viewing photos from years past. Round the night out by visiting with Milka and getting her autograph during this celebration blowout!

After an evening of awards and celebration, conference sessions kick off with a panel of experts discussing where the coal industry is headed, providing timely updates and discussing new standards in the works. • State of the Industry — Where is coal going in this country? • Beyond the Plant of the Year — How the Best Plants Keep Improving • OSHA 1910.269 Standard — What Does it Mean to Me? • Update on EPA Regulations — Impact on Coal and Importance of Fuel Diversity • Emergency Preparedness & Response Standard and What Else is Going On in D.C. • And more!

Join hundreds of coal power professionals in Chicago April 20–23 — Register today with code TRANSPORTER!

www.electricpowerexpo.com/prb-coal-users-group

e h t t a us

! M & O W

hat’s so hard about maintaining a coal car? After all, it’s only a box on wheels!” Have you ever heard someone say that? And you wonder - does he or she realize that this “box” is carrying a load of 120 tons on wheels that travel over 100,000 miles a year and is subjected to extreme temperatures, from subzero loadings, to thaw sheds that can reach 140 degrees. And this “box on wheels” will carry millions of pounds of coal over its 40 – 50 year life and is a highly engineered piece of equipment designed to meet stringent regulations to ensure it will withstand those stresses. The Operations and Maintenance (O&M) Committee was formed in the early days of the NCTA when it became apparent that while we didn’t have to re-invent the wheel, it sure would be nice to have a community of colleagues who could share their best practices in maintaining that wheel – and coupler, draft gear, yoke, roller bearing, bolster, axle, air valve – you get the picture! Over the years the O&M has grown from a western to a national coal organization and today it is much more than just an annual conference. “We’re all operating in a different world,” says Dennis Wanless of Xcel Energy, Chairman of the O&M. “Many of us are wearing multiple hats, and technology drives our maintenance decisions much more than it used to. We’ve moved beyond the era of throwing a gage against it and go from there. We really need to look around and make sure we know the rules and know that we’re following them. And of course we can’t lose 34 | COAL TRANSPORTER

sight of our number one job, which is getting coal delivered.” But where does a person go to develop the skills needed to operate in this new world? The O&M is a good first step. Knowing that a question asked by one is probably wondered by many others, the O&M developed a Technical Review subcommittee that takes those questions and digs into issues and solutions. Under the leadership of Amsted’s Tom Sedarski they are currently looking at best practices for extending the service life of one of the highest cost items in running repairs – wheelsets. “Why not use the NCTA’s webinar capability to reach more people?” asked Pat Scherzinger, NCTA Communications Director. Thus was born the O&M quarterly Webinar Outreach subcommittee. With expert presentations made by component manufacturers, AAR Technical Services personnel, maintenance providers and more, this has been another tool in our education tool. For one-on-one discussions and detailed presentations made by industry experts, the annual O&M Conference retains its “Best in Show” title. “We try to cover the basics for those new to the industry, and we’ve also been able to call on product engineers who really dig down to the science behind what we do,” says program chairman Harry Mullins of Southern Companies. “It’s great to be able to meet people from all parts of the country and learn how they handle things, and maybe teach them a thing or two at the same time.” The Utility Roundtable remains a favorite feature of the annual O&M Conference, providing a forum for open discussion

2011

2012

2013

2014 among voting member companies by those with the responsibility for the operations and/or maintenance of railcars in unit coal train service. A second session of the Roundtable was added a few years ago that draws on the expertise of NCTA Associate members as well. “It’s amazing how much you can learn by the sharing of experiences that happens at these sessions,” says Carmen Sparks of Luminant. “I can’t tell you how many times I’ve come away really amazed by the depth of knowledge our

participants have, and to be able to pick their brains, and tell them what we’re seeing on our fleet, is something you just don’t find elsewhere.” So be sure that the O&M is part of your 2015! If you haven’t attended one of our conferences yet, please make us part of your year. If it has been awhile since you’ve attended, please come again. And if you’re a regular, welcome back and we look forward to seeing you this year and next! s

Your NCTA O&M Executive Committee is represented by: Officers

Name

Company

Committee Chairs

Chairman

Dennis Wanless

Xcel Energy

Vice Chairman

Carmen Sparks

Luminant

Site Selection

Secretary

Gayle TenBrink

Trinity Industries

Webinar Outreach

Robin Andersen

Mitsui

Kevin Johnson

Nebraska Public Power District

Harry Mullins

Southern Company

Program

Tom Sedarski

Amsted Rail

Technical Review

Troy Smith

Consumers Energy

Kurt Stroer

Ameren

Nominating COAL TRANSPORTER | 35

NCTA 2015 O&M Conference / Preview

5 1 20

Operations & Maintenance Conference Pinehurst Resort, North Carolina June 8-10, 2015

he NCTA Operations & Maintenance Committee will hold its annual conference June 8-10, 2015 at the Pinehurst Resort in Pinehurst, North Carolina. The conference will include sessions dedicated to the study of the technology, design, maintenance, operations, and repair of railcars in unit train service. The traditional private car owner roundtable will allow attendees to discuss challenges and review best practices. The roundtable will consist of a two sessions on Monday with the morning session opened to NCTA voting members and the afternoon session open to all NCTA members. The conference will feature all the usual events including an opening night reception, continental breakfast, dinner for attendees and guests on Tuesday evening, and will conclude with the annual golf tournament. The Pinehurst Resort is heralded as the â&#x20AC;&#x153;Cradle of American Golf â&#x20AC;?. With 9 golf courses on the property, in kid terms, it sounds more like an awesome jungle gym than a cradle. The Resort is located in the heart of the Carolina Sandhills which are thought to have been created by ancient oceans that rose and then receded in response to the melting and freezing of the polar ice caps. The strip of ancient beach dunes thus formed, roughly divides the Piedmont from the coastal plain. Golfers can rejoice that there was no government around at the time to try and stop it all from happening.

REGISTRATION

Registration is required for each attendee at the O&M conference. The conference is open to all NCTA members regardless of whether you have participated actively in the ongoing activities of the O&M working committee. The conference fee is $480 for members and $680 for nonmembers. After May 15th, an additional fee of $50 will be added for late registrants. The registration fee covers the registration packet of information, admission to all meeting proceedings, the welcoming reception on Monday evening, continental breakfast on Tuesday and Wednesday, 36 | COAL TRANSPORTER

dinner and entertainment on Tuesday night, and all refreshment breaks. There is a charge for each guest of a registrant that participates in the Tuesday dinner and/or golf.

SPONSORSHIPS

Conference sponsorship opportunities are available at three levels of support - Platinum $2,500, Gold $1,500, and Silver $1,000. Please contact Tom Canter at 303-979-2798 or by email to tom@nationalcoaltransportation.org for additional details on sponsorships and company recognition.

ACCOMMODATIONS

Pinehurst has several distinct accommodations. NCTA attendees will be booked into the Carolina Hotel. Everything about the stately Carolina recalls the time-honored traditions of the South. This majestic century-old hotel with its signature copper cupola and sweeping fern-lined verandas reflects an era when elegance defined grand hotels and resorts. Dubbed the “Queen of the South,” the Carolina has 230 Four-Diamond guest rooms including suites.

Carolina Traditional rooms feature a choice among King, Queen, or 2 Double beds. All rooms are equipped with Wi-Fi, LCD televisions, marble bathrooms, desk/workstation, feathertop bedding, a mini bar, and safe. Dining options at the Carolina Hotel include the elegant Carolina Dining Room, the casual Ryder Cup Lounge, and the convenient Carolina Coffee Shop.

RESERVATIONS: 800-487-4653 ROOM RATES PER DAY: $229.00 Single/Double Taxes and a 10% daily resort fee are additional. The resort fee covers wireless internet access, on-site transportation, valet and self-parking, beach club and outdoor pools, bicycles, afternoon tea in the Carolina, and access to the fitness center, practice putting greens, and driving range. The cutoff date for the NCTA room block is Monday May 18, 2015. Check-in time is 4:00 PM and check-out time is 12:00 noon. The Pinehurst Resort is located at 80 Carolina Vista Drive, Pinehurst, NC 28374. s

Monday, June 8

Tuesday, June 9

Wednesday, June 10

9:00 a.m. - 12:00 p.m.

7:30 p.m. - 8:00 a.m.

7:30 a.m. - 8:00 a.m.

Private Car Owners Roundtable – Voting Members

12:00 p.m. - 1:30 p.m. Lunch by Individual Arrangement

1:30 p.m. - 3:30 p.m. Private Car Owners Roundtable – All Members

6:00 p.m. - 7:00 p.m. Welcoming Reception – West Lawn

Continental Breakfast – CC Foyer

8:00 a.m. - 12:00 p.m. General Conference – Callaway Room

12:00 p.m. - 1:30 p.m. Lunch by Individual Arrangement

Continental Breakfast – CC Foyer

8:00 a.m. - 11:30 p.m. General Conference – Callaway Room

1:30 p.m. - 6:00 p.m. Golf Tournament – Course #1

1:30 p.m. - 5:00 p.m. General Conference – Callaway Room

6:00 p.m. - 9:30 p.m. Dinner and Entertainment – Donald Ross Grill

Thank you to Lexair and Miner Enterprises for their early commitment to sponsor this event!

AAR Interchange Rules / Update

AAR Rule Changes

& Industry Initiatives for 2015 By Mike Edwards, iIRX Adam Boyd, iIRX Jerry Barnaby, Western Fuels Association

The following is a list of the significant revisions to the Field & Office Manuals of the AAR Interchange Rules that went into effect from July 2014 to January 2015. A majority of the changes were simple textual alterations to already existing rules which are not pertinent to the membership. With that being said, there are several industry initiatives, new wayside detectors, as well as the upcoming reflectorization deadline that will be discussed in this article.

AAR Rule Revisions Rule 1- Care of Freight Cars • It is no longer required for repair tracks to have an onsite copy of the American Welding Society AWS D.15.1-Specification for Cars and Locomotives, but access to the specification is required. Clarification – A repair track will no longer be written up if it does not have a hard copy of the specification but the shop must be able to demonstrate to an AAR MID (Mechanical Inspection Department) inspector the ability to access the up to date specification either online or by some other means justified by the repair location.

Rule 4 – Air Brake Valves and Parts • Add New - Effective January 1, 2016, all Emergency and/ or Service brake valve replacements must be reported by the repairing party along with the applied Component ID to Railinc. All Emergency and/or Service Brake valves produced or reconditioned after July 2015 will be reported to Railinc. Clarification – Brake Valve portions are now being tracked closer so in the event there is a component recall they can be located and replaced efficiently. It also means that railcar owners and fleet managers have additional data about their brake valves that will allow for trend analysis and actionable business intelligence. This requirement is the latest development with Comprehensive Equipment Performance Monitoring (CEPM). • Add New - All emergency and /or service brake valves applied to cars must be new or reconditioned. A transfer of valves within a shop between cars of the same owner is prohibited without prior written approval from the Brake Systems Committee. Clarification – Secondhand brake valve portions can no longer be applied to freight cars without approval.

38 | COAL TRANSPORTER

• Added Job Code 6999 - Effective January 1, 2016, to be used only when there is no specific job code for a component that requires the reporting of an AAR Component ID. Report applicable car part identification code as noted in the specific rules where the use of this Job Code is permitted. Report applicable location when required.

Rule 41 – Wheels • Added two items to the general information section of this rule. 1. When handling wheel sets, care should be taken that handling devices do not damage the roller bearings. Use polymer pads or other methods to prevent damage to the axles from metal-to-metal contact.

Clarification – A way to properly report a brake valve change to Railinc (CEPM) via CRB (Car Repair Billing) when there isn’t a job code specific to the repair.

Rule 13 – Hand Brakes • Wear Limits, Gaging, Cause for Renewal – Two items added. 1. Cause for renewal or repair if hand wheel clearance or clearance from the grip portion of the operating lever is less than 4 inches.

2. Cause for renewal or repair if release lever clearance is less than 2 inches.

Polymer Pads in use to protect the axle 2. All mounted wheel sets must be stored and shipped using methods that prevent axle bodies and roller bearings from having metal-to-metal contact with load securement devices, other wheel sets, or any other metal objects.

Correct Wheel Storage

Incorrect Wheel Storage

COAL TRANSPORTER | 39

Rule 36, 41, 43 & 44 – Bearings; Wheels; Axles & Wheel Sets • Added the wording “no welding or welding arc damage” to the welding requirements. Added Why Made code 94 – Weld Arc Damage Clarification - Welding arc damage that can be detected visually on the wheel, axle, or bearing can lead to catastrophic failure of the wheel set. The electric current created by an arc welder can lead to subsurface cracking and can penetrate roller bearing’s internal components which can fuse a roller(s) to the cage or raceway.

“Location on Car” was added to the list of items that must be applied to the wheel set with a crayon when wheel sets are changed.

Reflectorization - 49 CFR Part 224; Rule 66 of the AAR Interchange Rules • On January 3, 2005, the United States Department of Transportation’s Federal Railroad Administration (FRA) issued a final rule mandating the reflectorization of freight rolling stock with the goal of reducing highway-rail grade crossing accidents. The FRA Rule, 49 CFR Part 224, originally went into effect on March 4, 2005, but in response to petitions received, the rule was amended and the effective date was pushed to November 28, 2005. Subsequently, AAR issued Rule 66-Reflective Sheeting also effective November 28, 2005. We are now nearing the ten year deadline of November 28, 2015 with a large number of railcars (roughly 315,000) that do not have reflectorization information reported to Umler. On November 3, 2014, AAR issued Maintenance Advisory MA-0152 to address the railcars that have not been equipped with the reflective sheeting or properly reported in Umler. This Maintenance Advisory will be upgraded to Early Warning status on July 11, 2015. Railcars that have not had the reflectorization event updated in Umler by October 28, 2015, one month from the (FRA mandated) deadline, will be prohibited in interchange. Clarification - It is strongly recommended that railcar owners review the reflectorization status of their fleet and take the appropriate actions. It would also behoove car owners to start planning for the renewal of the reflective sheeting “no later than 10 years after the date of initial installation” as required by FRA 49 CFR 224.111. AAR has submitted a Petition for Waiver on the 10-year renewal requirement to continue the study of the reflective sheeting with the goal of establishing a minimum performance-based standard. The FRA’s decision should be published in the near future.

40 | COAL TRANSPORTER

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COAL TRANSPORTER | 41

Industry Initiatives

Rule 75 – Miscellaneous Labor • Revised to allow for the Billing for an early Warning or Maintenance Advisory inspection that does not result in a repair as directed by the EW/MA. Job Code 4454 was added to obtain labor charge when directed by active early warning or maintenance advisory letter. Clarification – This allows the repairing entities to bill car owners for an Early Warning or Maintenance Advisory inspection even if they deem the inspected component acceptable to remain in service. This also allows for this inspection to be on record through CRB.

Rule 96 & 115 – Owners Responsibility & Damaged and Defective Car Tracking (DDCT) • Added the requirement for reporting all Rule 96 events through DDCT. Clarification – The railcar owner must provide the railroad with disposition instructions, any time the loss or damage to a railcar is owner responsibility, as outlined in Rule 96.

The UP has installed an experimental ultrasound detector for wheel inspection in North Platte, NE resulting in an additional 100 wheel set change outs for thermal cracks in 2014. 42 | COAL TRANSPORTER

CEPM (Comprehensive Equipment Performance Monitoring) continues to be implemented, though there are still some billing issues with inaccuracies that are being worked out by the industry with regards to wheel sets. In 2015, brake valve parts, specifically emergency portions and service portions, will be added to the CEPM system. Currently, CEPM tracks wheel sets, couplers, service valves, emergency valves, bolsters and side frames. In the future, Empty/Load devices as well as slack adjusters will be added to the component registry. The UP has installed an experimental ultrasound detector for wheel inspection in North Platte, NE resulting in an additional 100 wheel set change outs for thermal cracks in 2014. While quite positive in helping to identify grossly out of round wheels, WILD continues to have some issues with data accuracy, with fluctuations between detectors and inaccurate readings occurring more than desirable. WILD’s importance to reducing derailments and damage to track and its infrastructure, as well as an excellent preventive and predictive tool for car owners, garners it to receive continued engineering and focus to where the data can be verified as more accurate. Wheel profile detectors (WPD) could be introduced sometime in late 2015. Wheel profile detectors use lasers and machine vision systems to detect wheels with condemnable built up tread, hollow worn tread, condemnable rim thickness, flange height as well as thin flange. For the most part, the expectation is that the introduction of WPDs will have a minimal impact on coal fleets in the short to medium term future. Top of rail friction modifiers that are in testing, have shown promise after being in service for a few years. The railroads have performed a comparative analysis showing very positive results and savings in wheel wear. However, the question of whether the savings justifies the cost is currently a matter that requires more scrutiny. Certain service regions, such as Canada and the northern United States might have a more significant application with a better return on investment. With that in mind, car owners should watch carefully for new developments over the next 12-24 months. Formerly known as Cold Wheel/Warm Wheel detection, now called Wheel Temperature Detection (WTD), which has been available in EHMS as a data summary (both for trucks

and the whole car), will also likely be introduced to the larger wayside detection initiative in 2015. WTDs use heat sensing equipment to detect cars or trucks with braking problems and can help determine whether or not there is a problem on an entire train, or just a single car. 91.7% of the defective braking systems are currently being identified using this technology, and this percentage will only improve moving forward. Itâ&#x20AC;&#x2122;s reasonable to believe that wheel temperature detectors will eventually allow for the extension of the interval between Single Car Airbrake Tests. This will lead to fewer railcar set-outs, reduced train delays, and significantly improve system efficiency, which could potentially drive down the need for more freight cars due to increased railcar availability. While there may not be any game-changing AAR Rule Changes for the onset of year 2015, there are plenty of changes that represent the industryâ&#x20AC;&#x2122;s commitment to fine tuning requirements and specifications that ultimately improve freight railcar safety, reliability and equipment availability. Equally as important is the fact that these Rules offer additional valuable data for the industry to learn more about its performance. While the railroads look at data to help reduce the number of derailments and track related issues, the same available data is being used by forward-thinking car owners to provide valuable business intelligence to make cost saving short and long term maintenance decisions. This data clearly allows fleet managers to be more proactive in their maintenance decisions whereby good preventive measures are being taken.

When the data is correlated even further, this same freight car mechanical data can be used as documentation to defend repair errors made to your equipment as well as identifying EHMS Alerts that are open in error. Using AAR published formulas, this same data allows for the auto-closure of these Alerts hence protecting these wheel sets from being wrongly replaced by the railroads. It is not uncommon now to use data from multiple wayside detectors combined with other data such car repair billing history to determine system problems. For example, weight data from WILD readings correlated with truck hunting readings can determine if a car has a suspension issue such as a broken or missing spring. CRB data combined with THD (Truck Hunting Detector) and WPD readings can point to a brake system problem as asymmetric wheel wear can been identified. Of course this same data offers accurate trend analysis should a mechanical issue arise or to determine what are the best performing components on your equipment that should be considered for replacement whenever possible. As freight railroading chugs on down the line, know that the Rules that the AAR and the FRA will introduce will generate additional data for car owners to utilize. In our opinion, the car owners that can most benefit by integrating data analysis are those performing high mileage in heavy tonnage service. The notion of letting the railroads maintain your equipment as needed is no longer valid when information is at your fingertips that are both performance enhancing and cost saving. s

COAL TRANSPORTER | 43

Surface Transportation Board / Update

Could preemption be a defense to environmental claims on coal dust during transportation? And if so, is there any benefit for shippers? By Sandra Brown, Partner, Thompson Hine LLP

n the midst of the year-end holidays of 2014, the Surface Transportation Board (“STB” or “Board”) issued a decision favorable to the railroads in addressing the relationship between preemption under 49 USC § 10501(b) (which says that the STB has exclusive jurisdiction over rail transportation) and the federal environmental laws under the Clean Air Act (“CAA”). See United States Environmental Protection Agency – Petition for Declaratory Order, STB Finance Docket 35803 (served Dec. 30, 2014) (the “STB Preemption Decision”). The United States Environmental Protection Agency (“EPA”) raised the issue at the STB by filing a petition for declaratory order in January 2014 asking the STB to determine whether two rules (the “Rules”) concerning locomotive idling would be preempted under § 10501(b) if EPA were to adopt the Rules into the California State Implementation Plan (“SIP”). The two Rules that were first created in 2006 are: (1) railroads must keep records of all locomotive idling events longer than 30 minutes; and (2) railroads are not permitted to idle unattended locomotives for more than 30 minutes under certain circumstances.

Neither Rule applies to a locomotive that is equipped with an anti-idling device set at 15 minutes or less. The Rules were developed by the South Coast Air Quality Management District (“SCAQMD”) in southern California because SCAQMD believes that locomotive idling is part of the reason that the region has failed to reach the National Ambient Air Quality Standards (“NAAQS”) under the CAA. Under the CAA, state and local governments have primary responsibility to meet the NAAQS. The SCAQMD initially did not submit the Rules for inclusion in the SIP, but, instead, attempted to enforce the Rules as local regulations. Various railroads filed a complaint against the local Rules, and the courts agreed that the Rules were preempted by § 10501(b). See, e.g., AAR v. SCAQMD, 622 F.3d 1094 (9th Cir. 2010). However, the courts also stated that, if the Rules were incorporated into the California SIP and submitted to the EPA - which would give the Rules the full force of federal law under the CAA - then it might be possible to “harmonize” the Rules with § 10501(b). If two federal laws can be harmonized, then there is no preemption of one federal law over another. After the 9th Circuit’s decision, SCAQMD submitted the Rules through the chain for inclusion in the SIP and the Rules were eventually included in the SIP submitted to the EPA for approval. Before deciding whether to approve the SIP, the EPA filed the declaratory order proceeding at the STB. The STB Preemption Decision technically declined to issue a declaratory order but the decision offered guidance on the preemption issue and stated that the proposed Rules for locomotive idling, under the auspices of the CAA, are likely preempted based on the information submitted to the STB. The STB’s reasoning in support of preemption was based on the STB’s strong preemption statute and the importance of national uniformity in laws for rail transportation. The STB restated a finding previously made in other cases that federal environmental statutes such as the CAA and the Clean Water Act (“CWA”) are “generally outside 44 | COAL TRANSPORTER

of the scope of preemption under § 10501(b), unless the federal environmental laws are being used to regulate rail operations directly or being applied in a discriminatory manner against railroads.” When the two federal laws do conflict, the STB or a court must determine whether the two statutes can be harmonized such that both can be implemented. The STB Preemption Decision stated that if the Rules were implemented by EPA in the SIP, the Rules would likely be preempted because they would “create a patchwork of regulations.” The STB was also concerned that the required recordkeeping might affect railroad operations. In addition, the STB found that the Rules would impact how railroads conducted their operations because the Rules could also influence the equipment chosen by the railroads and how they needed to configure that equipment. Furthermore, the STB found relevant that the US Department of Transportation and the Federal Railroad Administration raised concerns that the Rules might lead to operational inefficiencies, safety issues, and other 1

delays. Finally, the STB surmised that the Rules might interfere with EPA’s existing regulations on locomotive emissions under the CAA. The STB was particularly concerned that, if the Rules were approved, other local air quality districts in nonattainment areas might similarly enact their own locomotive idling regulations, thereby producing a patchwork of differing local regulations across the country – creating a real problem for railroads that cross state lines daily and operate each other’s locomotives. Moreover, due to difficulties inherent in re-setting locomotive antiidling devices, railroads would effectively be forced to comply with the most stringent local regulation in the nation. In other words, the STB found it troubling that the railroads might be forced to alter their operations nationally in response to ever-changing standards. It remains to be seen whether the preemption position advanced by the STB in the STB Preemption Decision1 could be used in defending lawsuits regarding coal dust from trains like the pending

The STB was particularly concerned that, if the Rules were approved, other local air quality districts in nonattainment areas might similarly enact their own locomotive idling regulations, thereby producing a patchwork of differing local regulations across the country – creating a real problem for railroads that cross state lines daily and operate each other’s locomotives.

SCAQMD appealed the STB Preemption Decision to the Ninth on February 26, 2015. TH_CoalTransporter_022011:Layout 1 2/17/2011 2:40Circuit PM Page 1

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lawsuit of Sierra Club, et al., v. BNSF Railway Company, No. 2:13-cv-00967 (W.D. Wash. filed Jun. 4, 2013) (“Sierra Club”). The primary complaint in the Sierra Club lawsuit is that BNSF Railway Company (“BNSF”) is violating the CWA by discharging coal dust and other byproducts into the waters of the United States without a permit under the National Pollutant Discharge Elimination System (“NPDES”). The cases are different both in terms of the application of the CAA versus the CWA and the fact that the STB Preemption Decision involved specific Rules that were evaluated. The different standards for various nonattainment areas across states under the CAA was at least one reason that the STB was concerned about creating a patchwork of regulations and that same concern may not have the same impact for NPDES permits under the CWA, although NPDES permits are delegated to states. Nevertheless, the request for a preliminary injunction in the Sierra Club case should clearly be preempted if it would result in stopping movements of coal via rail. It does not appear that BNSF expressly raised preemption as a defense in its answer and instead is defending the claim primarily on the basis that the plaintiffs do not accurately describe the CWA and BNSF has never been required to get a NPDES permit from EPA or any state for rail transportation. Interestingly, some non-railroad defendants, including Firstenergy Corp, Ambre Energy North America, Inc., Global Mining Holding Co LLC, Peabody Energy Corp, and Cloud Peak Energy Inc., were voluntarily dismissed by the plaintiffs early in the case. However, there has been some speculation that the plaintiffs may try to add coal shippers or other parties to the case after discovery. Some of the STB’s reasoning in the STB Preemption Decision could certainly be applied to the Sierra Club case. For example, the application of the NPDES permit requirement and the CWA as alleged in Sierra Club could result in railroads being forced to change railroad operations or change how they conduct their operations and configure their equipment. These changes could lead to operational inefficiencies, safety issues, and/or delays – the same

46 | COAL TRANSPORTER

concerns raised in the STB Preemption Decision. Likewise, various states have different authority to administer NPDES permits which could result in a patchwork of regulations depending on state or geographic region. A particularly interesting question is, if coal shippers are added to the Sierra Club lawsuit, would it make sense for shippers and the railroads to join sides in the defense including a preemption argument? While the parties may agree that the application of the NPDES permit requirement should not apply to train movements, railroads and shippers do not always agree on the coal dust measures that a railroad may unilaterally impose on a shipper. The lengthy coal dust proceedings at the STB are an example of the disputes between shippers and railroads regarding coal dust. See e.g., Ark, Elec. Coop. Corp – Petition for Declaratory Order, STB Finance Docket 35305 (served Mar. 3, 2011) and Reasonableness of BNSF Ry. Coal Dust Mitigation Tariff Provisions, STB Finance Docket 35557 (served Dec. 17, 2013). A petition for reconsideration is still pending at the STB in Finance Docket 35557. Moreover, since most coal shippers supply their own cars, the costs associated with any car equipment changes would mostly fall on the shipper and not the railroad. Thus, the parties might advocate for different end results depending on which one would bear the most cost. Nevertheless, it seems that the parties would share an interest in maintaining fluid and efficient rail movements of coal without a patchwork of regulations across the states. Right now BNSF has to fight this battle on its own and it may be the target because of the high profile actions it took toward shippers on coal dust. Regardless of the ultimate outcome of Finance Docket 35557 at the STB, the broader coal dust issue is not likely to go away and there would be a better result if railroads worked with shippers and other parties to find the best solution with all interests being considered. s

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NCTA Calendar

of Events 2015

January 31, 2015 Payment Due for 2015 Annual Membership Fees April 26-29, 2015 Spring General Conference Wigwam, Litchfield Park, Arizona June 8-10, 2015 Conference Operations and Maintenance th Carolina Pinehurst Resort, Pinehurst, Nor July 8, 2015 dline Advertising and Editorial Dea nsporter Tra l Coa the of for Issue 2 2015 Magazine July 9, 2015 ng Western Logistics and Planni g etin Committee Me Chicago, Illinois

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Summer/Fall 2015 Presentation of NCTA Scholarship Awards: & Technology South Dakota School of Mines University of Arizona University of West Virginia University of Wyoming David L. Laffere Scholarship olarships Three Memberâ&#x20AC;&#x2122;s Children Sch September 14-16, 2015 Meeting Forty-First Annual Business and Conference Grand Hyatt, Denver, Colorado December 18, 2015 reReceipt at NCTA office of all LER UM the for ms for n certificatio 2016 r Yea ar end Cal for r Fee Waive

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NCTA Scholarship Recipients

2014 Scholarship Recipients The NCTA awarded four scholarships to children of the employees of NCTA member companies at its annual fall conference in Denver. These are the talented and hard-working recipients.

Thomas Cameron Sego Utah State University | Electrical Engineering

Recipient of the 2014 David Laffere Scholarship Award

Thomas Cameron Sego grew up in the small town of Mount Pleasant, Utah with an avid interest in sports and the outdoors. In high school he played football, basketball, and tennis, serving as the captain of both the football and tennis teams. Spare moments were spent hunting and fishing with his dad. A student leader, he served as Junior Class President and Student Body President as a senior and is a member of the National Honor Society. With a GPA of 3.95 in the Professional Program for Electrical Engineering at Utah State, Cameron was recently nominated as a candidate for outstanding pre-professional and was offered an undergraduate research assistant position in the USU Bridge Lab. Starting this year, he is serving as the administrative assistant in the school’s chapter of the Engineering Council and is one of the University’s three electrical engineering ambassadors. These positions have helped him reach out to students in more ways than he could have imagined. Cameron served an internship at Bowie Resource Partner’s Skyline Coal Mine where he worked underground with the maintenance crews. This exposure to mining processes and the use of coal for affordable energy has piqued an interested energy production in general. He believes that many of the processes used in mining today could be optimized, and plans to do some research during his senior year on this topic. Cameron is the son of Jeff & Janiel Sego (Bowie Resource Partners)

Laura Poletti Purdue University | Accounting and Management Laura Poletti is a junior at Purdue University studying Accounting and Management with concentrations in International Business and Spanish. She grew up near Roanoke, Virginia, but moved to Kenosha, Wisconsin a few years ago. Laura plans on obtaining her Masters of Accountancy and then taking the CPA exam. She hopes to gain internship experience in both public and corporate accounting to aid her in determining which area she would like to focus on in the future. She has loved her experience at Purdue where she is involved in campus activities, holds a part-time job and maintains a high GPA. She is the CFO of her sorority, the Finance Director for Women in Business, a Promotional Officer for a professional organization on campus called Old Masters, and is active in the community, helping teach English to Spanish speakers and volunteering at service events. Last summer, Laura had the unique opportunity to study and intern in London, England. Along with gaining some direct experience in corporate accounting and taking a class, she enjoyed summertime in the UK by embracing the culture, attending plays, going to Wimbledon, seeing the Royal family, taking side trips to Scotland and Wales, and so much more! Next semester, she attend school in Seville, Spain, taking business classes taught in Spanish and several other classes to fulfill her Spanish minor requirements. The coal industry has been a large part of Laura’s family for several generations. Her parents met when they were both working in the industry and her grandfather and uncle both spent some of their careers working in the coal industry as well. 50 | COAL TRANSPORTER

Laura is the daughter of Phil and Mary Poletti (Crown Products and Services)

Alexander Rookey University at Buffalo | Computer Science Alexander Rookey grew up in the village of Sackets Harbor, NY. He graduated salutatorian from Sackets Harbor Central School with a graduating class size of thirty-seven students. He is currently in his junior year at the University at Buffalo studying for a degree in Computer Science. He was recently offered a returning internship at Google for the summer of 2015. Alexander enjoys the outdoors which is easy to do when one lives only a mile away from Lake Ontario. His favorite summer activities are water skiing and camping. In the winter, he enjoys snowboarding and snowmobiling with his dad and his friends. The family has a cat, Sport, who Alexander affectionately calls Fat Cat. His younger sister, Amanda, is also in college. She is in her freshman year at State University of New York at Plattsburgh. “I am looking forward to graduating next year and taking the skills I’ve learned during my time in college and using them to make the world a safer place.” Alexander is the son of Thomas Rookey (Dynegy)

Kortney Hujet University of Wisconsin-Madison | Mechanical Engineering Kortney Hujet grew up in De Pere, Wisconsin, where she attended De Pere High School. Throughout high school she participated in various activities including varsity soccer, cross country, National Honor Society, Key Club, and Ski & Snowboard Club. Kortney balanced her extra-curricular activities with her studies and graduated at the top of her class with a 4.0 GPA. Kortney is currently a junior in the Mechanical Engineering department at the University of Wisconsin – Madison. Engineering is a good fit for her since she has always been interested in how things work and how products can be improved. On schedule to graduate in the spring of 2016, she would like to work in the energy industry, specifically at a power generation plant of some type. Following in her father’s footsteps into the field of energy generation has been an interest of hers for as long as she can remember. She believes that the significant changes the energy industry is going through now will continue for many years to come. She is looking forward to the opportunity of being part of this time in the industry. Kortney is the daughter of Kevin and Penny Hujet (Wisconsin Public Service)

COAL TRANSPORTER | 51

NCTA / Washington Board Trip

NCTA Washington Visits , and Netanyahu By Pat Scherzinger, NCTA Communications Director

here were literally bodies flying as the NCTA stormed through Washington DC on one of its regular visits to the nation’s capital. It was a bit of a surprise to those of us that come from the Denver area to see as much ice on the sidewalks as we did when we arrived. While our group managed to all stay upright, we did see a few unfortunate souls lose their footing and land on the pavement. Conditions did improve for the rest of the visit and we left before a new front came rolling in. As a reminder, the NCTA is an educational organization and does not take positions on specific legislation or spend time or money on lobbying efforts. Monday began with meetings at Surface Transportation Board. While

52 | COAL TRANSPORTER

There were literally bodies flying as the NCTA stormed through Washington DC on one of its regular visits to the nation’s capital. the commissioners did not discuss current cases or filings before the Board, there was plenty to talk about. Our first meeting was with Brian O’Boyle, Acting Chairman Deb Miller’s Chief of Staff. Acting Chairman Miller, who spoke at our Fall Conference, was traveling, but she was able to join the meeting by conference call. Both Acting Chairman Miller and Mr. Boyle were part of the field hearing in Fargo, South Dakota in September and were very interested in updates on rail service. The message they received was that rail service has

improved for coal consumers. Some utilities shut down generation in order to preserve inventory for the winter, a move that was costly, but necessary. Both a downturn in the grain market and labor problems at West Coast ports helped to eliminate some traffic on the rail system allowing coal better access to locomotives and crews and alleviating some congestion. Improvements on the Union Pacific appear to be outpacing those on the BNSF. Ted Barker of Maxeefish who testified in Fargo on behalf of Muscatine Power, gave antidotal evidence of the

Canadian Pacific’s proactive effort to significantly reduce his client’s cycle times. Like the NCTA, the STB has been graphing the performance metrics data the railroads have been filing on a weekly basis. The data has provided transparency regarding the extent to which the railroads are improving and resolving the ongoing service issues. The STB is currently accepting opening comments on a plan to continue requiring this data, however it is open to adjustments based on an assessment of what data has been helpful, what doesn’t matter, and what is missing. Other topics covered at the meeting included STB Reauthorization (currently no hearings on this are scheduled), fuel surcharges, and contracts of adhesion. A second meeting with Vice Chairman Ann Begeman and her Chief Legal and Policy Advisor James Bowels covered many of the same topics. Vice Chairman Begeman has been a member of the Board since 2011. She relayed to the group her reaction to the turnout in Fargo. As a former farm girl, she recognizes when the pitchforks come out. The need for communication between the parties is so important. After the meetings at the STB, the group headed back to welcome its guests for the “Big Cheese Luncheon.” It is always the ultimate long working lunch

Jim Henry, Tom Canter, Congresswoman Lummis, Melinda Canter, Gayle TenBrink, Don Vissat with each of the participants giving a short synopsis of concerns, issues, and events of interest. As guests represent a broad spectrum of initiatives and opinion on the challenges facing the coal and utility industries regarding transportation issues, natural gas and coal supply, and environmental protection initiatives it is a top level update from start to finish. It is the most efficient two and a half hours one can spend in DC. Guests and their affiliations included Todd Wynn and Chris Hickling (EEI), Ann Warner (CURE, currently undergoing reorganization and rebranding), Luke Popovich (NMA), Dustin DeBerry, Travis Fisher, and Dan Simmons (Institute for Energy Research), Tom Crowley (L. E. Peabody), Dan Jaffe (Slover and Loftus), Seth Schwartz (Energy Ventures Analysis), Mike Toohey (American Waterways),

Ted Barker (Maxeefish), and Matthew Preston (Wood MacKenzie). I think it is fairly safe to say it is quite unusual for a discussion on energy to open with a quote from Mike Tyson, but this one did. According to Tyson, “Everybody has a plan until they get punched in the mouth.” The group pulled no punches throughout the afternoon as every topic related to coal was on the table for discussion. Following the luncheon, the NCTA headed back over to E street to visit with the Technical Services group at the Association of American Railroads including Jim Grady and Nichole Fimple. Many may remember the excellent webinar update that Nichole presented about a year ago on the Asset Health Strategic Initiative (AHSI). AHSI is a multi-year, network level program that applies IT

COAL TRANSPORTER | 53

Annual Luncheon

solutions and processes to address the rail industry’s asset health challenges. Nichole covered the proposed activities planned for 2015 in support of this project. While the improvements on the technical side seem to be progressing, the challenge of getting an individual rail car moved to the right spot remains an issue. One of the other topics discussed was the requirement under FRA 49 CFR Part 224.107 that requires all cars be equipped with reflective sheeting by November 28, 2015. Currently 315,000 cars do not have reflectorization information reported in Umler. A follow-up with the AAR indicates that from 9,000 – 11,000 of this number could be coal cars. Currently the reflective sheeting must be replaced every 10 years regardless of its condition. However, current tests show that these materials are still effective after 10 years, making a good case for changing to a performance standard. In the meantime, check your car’s Umler records and avoid having them prohibited from interchange service. As often happens when finalizing the schedule, conflicts on meeting times arose so the group split up Tuesday morning to cover meetings at the Federal Railroad Administration (FRA) and the National 54 | COAL TRANSPORTER

Mining Association (NMA). Travel across town was exacerbated by the appearance of Israeli Prime Minister Benjamin Netanyahu before a joint session of Congress. Given the partisanship in Washington the regulatory arm of the National Mining Association has been particularly active. The organization has been surprised by how far the Obama administration has been able to push their unfet-

Congress has not stopped the administration and their plan is to forge ahead with a new Clean Power Plan that should be announced by summer 2015. This is an onslaught like the industry has never seen before. tered power. Congress has not stopped the administration and their plan is to forge ahead with a new Clean Power Plan that should be announced by summer 2015. This is an onslaught like the indus-

Ann Warner and Mike Toohey try has never seen before. They are using a multi-pronged approach harnessing the power of not only the EPA, but also the Department of the Interior as well as the BLM. NMA plans to fight back by using traditional channels, such as lobbying congress, leveraging the court system and working with Governors who are not willing to give into unconstitutional over reach. They are also using non-traditional methods such as third party advocacy groups comprised of those who would be impacted the most by sharp increases in energy costs. NMA is closely monitoring the Stream Buffer Rule, Coal Ash Rule, the Blasting Rule and the Utility MATS Rule that is set to be heard by the Supreme Court March 25, 2015. Moving forward, for the next two

years, litigation appears to be the answer to stall and slow down implementation of the Obama Administration’s strategy in the hopes for a new, more even handed administration. The front runner for the Democratic Party is heavily tied to John Podesta, so no change in course would be anticipated should Clinton win. That would lead to the conclusion that a party change is our best hope. Over at the Federal Railroad Administration the topics were much more technical in nature. Topics covered included ECP Brakes, tank car regulations, reflectorization, service metrics, and positive train control. The BNSF and NS are currently running an ECP equipped train from the PRB to Plant Scherer in Juliette, Georgia. It is the only ECP train utilizing the 5,000 mile inspection waiver. The FRA did file a placeholder but no actual comments with the STB regarding the continued publication of service metric data. On positive train control, it does not look as if the carriers will be able to meet the implementation deadline in spite of the effort and money spent to date. The NCTA groups reconnnected for lunch at Union Station where the restaurant floor vibrated as trains moved in and out below. The station is in beautiful condition and it was a nice respite before braving the chill and damp for the final meetings of the trip. After lunch it was time to visit Capitol Hill and meet individually with Congresswoman Cynthia Lummis of Wyoming and Senator Cory Gardner of Colorado. Again, Prime Minister Netanyahu’s visit brought a lot of people to town, making the security checkpoints into the congressional office

B: Don Vissat and Emily Regis F: Gayle TenBrink, Melinda Canter, Jim Henry, and Tom Canter buildings more congested and entertaining than usual as friends and strangers alike sorted out whose black overcoat was whose and gloves ended up in mysterious places. Congresswoman Cynthia M. Lummis, the only Representative from Wyoming is a rancher and in her fourth term in the House of Representatives. Also included in the meeting was Will Carraco, her Senior Legislative Assistant. Senator Cory Gardner is a first time Senator from Colorado who gave up a safe seat in the House to run for the Senate against Mark Udall, a very antifossil fuel liberal. The NCTA met with him two years ago as a Congressman. His Senior Energy Advisor Jennifer Loraine ran point on this session. Both meetings covered many of the same topics including rail service concerns, EPA

overreach, and production tax credits for renewables. Also discussed were proposed changes to the way royalties are levied on coal mined from public land, changes that could hinder the ability of producers to develop export markets. It was a very busy couple of days and rather than having a relaxing evening out before heading early the next day for the Eastern Logistics and Planning Committee Meeting in Baltimore, we got trapped in gridlock from hell in downtown Washington. This was not political gridlock but real cars in the intersection, taxis turning left though 4 lanes of “parked” cars, and general proof that every nut and yahoo in the country is allowed to drive a car or bus gridlock. Needless to say, we are happy to be home and look forward to the Spring Conference in Arizona. s

Jerry Wess, Dustin DeBerry, Travis Fisher and Dan Simmons

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35 30

Intermodal

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Grain Unit

Coal Unit

Automotive Unit

22-Nov

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Rail Service / Member Sound-Off

Member Sound-Off The Coal Transporter asked members and associates to offer their opinions on rail service issues.

ail Service was a significant issue throughout 2014, not just for coal but for other commodities moving on rail. The STB took action, mainly in the area of monitoring and reporting. The NCTA has been posting the STB data weekly in graphic form in the members section of the website. Recently, the BNSF was required to file a plan detailing the actions they would take when an individual generating plantâ&#x20AC;&#x2122;s coal stockpile becomes critically low. All these issues and actions were the subject of this issueâ&#x20AC;&#x2122;s sound-off survey. The good news is that service is improving with 66% of respondents reporting that it is somewhat better and 17% enjoying much better service. For another 17%, things are about the same. The railroads have invested in locomotives and crews, but it also has helped that farmers are storing more grain. In addition, at the time of the survey, a slow down at West Coast ports kept some intermodal and automobiles traffic off the rail. After a long year of juggling inventories and plant dispatch, fuel managers will take what they can get.

Back to Basics

Sometimes it is important to take a step back and ask a few fundamental questions. This is especially true when some think that the fundamentals are about to change. We asked respondents what they thought was the purpose of holding coal inventory. Is the purpose to maximize the value of the generating asset though its non-ratable dispatch into the marketplace? Is the purpose to ensure a reliable fuel supply? Is it some combination of these two distinct goals?

Rail Service was a significant issue throughout 2014, not just for coal but for other commodities moving on rail as well. The STB took action, mainly in the area of monitoring and reporting.

60 | COAL TRANSPORTER

Reporting Requirement Leads to Equitable Service Between Commodities 50% 45% 40% 35% 30% 35% 20% 15% 10% 5% 0% Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

N/A

While most believe both these needs are legitimate purposes for holding inventory, some component of assuring supply reliability was recognized in every response. Coal generation has been a baseload business and utilities, through inventory stockpiles, have borne the majority of the cost to absorb the hiccups in the supply chain. Any finger pointing to the contrary especially in the middle of a major service meltdown is disingenuous. Maintaining and managing a coal stockpile is an expensive endeavor and these costs are ultimately borne by consumers. If gas prices remain low and wind continues to receive production tax credits,

coal generation may lose its baseload status. Coal inventory piles may be then be insufficient to absorb these swings and the market will look for a new way to provide and price this service. In the meantime, even in a crisis, 90% of the utilities responding think the railroads should stick to meeting the forecast and stay out of the utility management business altogether. Only 10% said that carriers should look at inventories for those utilities in danger of running out of coal. This is somewhat of a chicken or the egg scenario as if the carriers do the former, the latter is unnecessary. Not one utility surveyed thought the carriers should take control and schedule deliveries to keep inventories even at all utilities or that they should assign trains to keep inventories at some minimum safe level at all locations. This was one of several questions contributed by the Western Logistics and Planning Committee to the survey.

Forecasting, Reporting, and Contingency Planning

One of the things that could improve the forecasting process is the addition of a feedback loop by the carriers. Currently utilities nominate the coal they wish to receive and the mines verify that they can meet that demand. Generally, the carriers are able to meet the demand but when there are issues with service as there was throughout 2014, neither the utility or the mine gets any feedback on how much of the nominated coal can be expected to be delivered. When asked if the railroads should be required to state what they plan to deliver in an upcoming month, much as the producer and utility do for desired shipments, 94% said yes. The “yes” were fairly evenly split on who should have access to this information – everyone or only to the utility and producer who made the initial nomination. Hopefully this will see some follow-up in a future Western Logistics and Planning Committee Meeting and we can get this feedback loop put in place. The Surface Transportation Board was very active in monitoring issues regarding rail service. Beginning in October, the railroads were required to file data on a weekly basis including system train speed, weekly average terminal dwell time,

total cars on line by various car types, weekly average dwell time at origin for unit train shipments, the weekly number of trains held short of destination or scheduled interchange for longer than six hours, and the weekly number of loaded and empty cars, stated separately, in revenue service that have not moved in (a) more than 120 hours, (b) more than 48 hours but less than or equal to 120 hours. Ted Barker of Maxeefish has been graphing the data weekly and the NCTA has been posting it in the members section of the NCTA website. Members were asked if this weekly reporting requirement has been effective in assuring coal service is on par with other commodities. The answer was a resounding “meh”, a nice bell shaped curve around neutrality. One of the more recent conditions of the Surface Transportation Board was the requirement that the BNSF file a contingency plan outlining how it would address critical coal inventories. As it turns out, assurances from the railroad that they won’t let anyone run out of coal just aren’t that reassuring. Ninety percent of fuel managers will either pop another Rolaids or take the Reagan approach of “trust but verify” when faced with having to rely on the BNSF to avoid shoveling dirt. No one is going home and sleeping like a baby. On the plan itself, people were slightly more supportive. Only 44% thought the plan was too general to be of any value, 28% were neutral, 11% thought the plan was helpful and the remaining 17% had not reviewed the plan.

Purpose of Holding Fuel Inventory

% 1 1

sively Exclu intain a m o t ly supp ity bil relia

22%

Mainly for dispatch, supply reliability secondary

33% Primarily to assure supply reliability, dispatch secondary

34%

Dispatch and reliability equally important

Minimize dispatch

COAL TRANSPORTER | 61

Rail Service / Member Sound-Off

What other actions would you recommend be taken by either the STB or the individual carriers to improve service or communications going forward? Normally quotes from members would be printed here but alas most of the suggestions were pipe dreams both literally and figuratively. A pipeline to haul oil out of North Dakota was one suggestion to alleviate congestion on the Northern tier. Several people pointed to the difficulty in getting adequate provisions in rail contracts to compel performance. A few of us have been around long enough to have had contracts that included cycle time guarantees. Those were the “good old days”. When there are no penalties or liquidated damages associated with poor performance, it should not be a surprise that resources go to whatever commodity garners the highest return.

Confidence in Assurances that You Won’t Run Out of Inventory

10 %

40%

Down g them rade spee on d dia l

Pop another Rolaids

50%

Trust but verify

While the STB has no control over how much business a railroad can accept, many felt that continuing the reporting requirements is a good idea. As one buyer put it, “It takes only a few months of bad service to create another crisis.” s

“It takes only a few months of bad service to create another crisis.”

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Steve Sharp / Reflections

Building Something S

teve Sharp was born in West Plains, Missouri on January 11, 1954. His father, Gerald, or Jerry as everyone called him, was a salesman for the Springfield Paper Company of Springfield, Missouri. His only sibling, an older sister Mallory, was born in 1950 in Kilgore, Texas, home of the Kilgore Rangerettes. Jerry was working in the Texas oil fields at the time. His mother Dorothy, an English major in college, was working at the local newspaper in Texas when she and Jerry met. Dorothy stayed home to raise the kids but later worked as a Reference Librarian for the Northwest Arkansas Regional Library in Harrison. When Steve was 6 months old, his dad bought a small drive-in restaurant in Harrison, Arkansas, a small town that was one of the stops on his sales route. Harrison is located about 140 miles north of Little Rock. Steveâ&#x20AC;&#x2122;s dad stayed in the restaurant business in Harrison for most of his career, the only exception being a short lived venture in a womenâ&#x20AC;&#x2122;s retail clothing business. His last restaurant before he retired was called Master Chef.

COAL TRANSPORTER | 63

Tom Sawyer meets Jimmy Neutron meets Led Zeppelin Growing up in a small town in northwestern Arkansas was great. Both of Steve’s parents were very tall and as it turns out, so was he. That made him very popular in organized sports, beginning with Little League in grade school. Steve and his friends played basketball, football and rode bikes pretty much year round, at least when their parents didn’t make them do something else. He also spent a lot of time wading up and down Crooked Creek, occasionally tossing in his line to catch a fish or two. Steve and his friends would wander through the woods and fields, checking out the ponds around the neighborhood which was built just on the edge of the developed portion of the town. One can almost imagine Tom Sawyer tagging along for an adventure or two. Across the street from his house was a cow pasture with a barn. While he may have led a somewhat carefree childhood, Steve was curious and interested how things worked. He enjoyed working math problems, and studying anything mechanical or scientific. In 1972, his high school counselor advised him to pick anything except engineering as a career. He was already displaying a high aptitude for engineering, but at the time there were thousands of engineers out of work and looking for jobs as a result large layoffs in the aerospace industry. “One young man with a Master’s Degree in Civil Engineering who lived down the street from us in Harrison was painting houses because he couldn’t find an engineering job.” But Steve didn’t listen to his counselor. He had his heart set on engineering. As a teenager, Steve helped out at his Dad’s restaurant. He never cooked but did every other job at the restaurant at one time or another. When he was 17, he spent the summer helping to build a highway by-pass around Harrison. The bypass was built on the old Missouri and North Arkansas Railroad right-of-way. Music was also a passion of Steve’s. In junior high, Steve and several friends started a rock band. Steve learned to play the bass guitar and the group played for a number of dances at churches, community meeting rooms, and at a local car dealership. Credence Clearwater Revival’s 64 | COAL TRANSPORTER

“Proud Mary” and Steppenwolf ’s “Born to be Wild” were band favorites. During his junior year in high school, he left the band to focus on basketball and to prepare for college.

Life as a Bear and a Razorback

He received a scholarship to the Civil Engineering Department at Washington University in St. Louis, Missouri. During the summer after high school graduation, Steve married his high school sweetheart, Jan Cromwell. The move to a very urban area of St. Louis proved to be a bit much for the newlyweds. Washington University had no accommodations for married students, so they had to rent an apartment off campus. After one semester, the couple moved to Fayetteville where Steve enrolled in the University of Arkansas. He found the U of A to be a great place to study engineering. The Civil Engineering Department had an amazing group of professors and since many high school counselors had talked students out of studying engineering, the halls were pretty empty and class sizes were very small. Students received a lot of personal attention, sometimes even more than they wanted. Steve got his first taste of utility life working during the summers of 1973 and 1974 in the Harrison District Office, for Arkansas Power & Light. The office had a new computer system for tracking the district’s distribution devices and meters. Steve spent time working to improve the accuracy of the records and submitting work orders to remove equipment no longer needed. He learned to identify types of distribution equipment and conductors, stake a distribution line, operate a bucket truck and how to read and modify AP&L drawings. In 1976, Steve graduated with High Honors from the University of Arkansas, receiving a Bachelor of Science degree in Civil Engineering. Eventually he became a Registered Professional Engineer in Arkansas, Louisiana, and Texas.

Third Time’s a Charm

For a smart guy, it took a while for Steve to figure out that Arkansas was home and always would be. After graduation, Steve took a job at Black and Veatch Engineers in Kansas City, Missouri. Using his newly minted degree, he performed civil and structural design for elements of coal-fired power plants. He also worked on steel

Rock Street Lofts. Steve did the structural engineering work for the architect to turn an old furniture warehouse building into a downtown loft apartment complex. The bottom floor contains retail space and the upper floors are loft apartments. This involved reworking portions of the old wood beam and wood floor framing. After cutting out a large section of the original framing in the center of the building to provide an atrium, Steve was able to reuse that material to repair the some of the wood was damaged by water leaking from the roof. structures for turbine buildings, concrete cooling tower basins, concrete stack foundations, and coal pile drainage systems. After just a year in Kansas City, he moved back home to Harrison where he took a job heading Engineering and Drafting for Ozark Metal Products. Ozark fabricated materials for metal and spiral stairways, handrails, canopies, and catwalks. The work was not very challenging, so after a short time, he was off again, this time to Riverside Industries in Tulsa, Oklahoma. As a design engineer for Riverside, Steve worked on the foundation and structures for steel and aluminum electrical transmission towers. Anxious to start a family, he and Jan adopted their daughter

Stephens Building. This is a 30 story steel building that has stunning views up and down the Arkansas River from the upper floors. The building houses a bank and many other businesses and offices. Steve did the structural engineering for the building. Kelley in 1979. By 1980, he was ready to move back to Arkansas. Although he would still search for that perfect job, he was back for good this time. For the next five years, Steve would leave his mark on Little Rock, first with the Blass Architectural Firm and then with Riddick Engineering. Steve provided civil and structural services on highly visible residential, commercial and industrial projects throughout the area. These include additions to the Baptist Medical Center, the Arkansas Children’s Hospital, the Stephens Building, the parking deck at UA Medical Sciences Campus and the Aerospace Museum and IMAX Theater. He also worked on many structures that were a part of electric utility systems. These include high-voltage transmission towers, power plants and other utility facilities. While Little Rock was growing, Steve’s family was as well. Honey was born in 1981 followed by Whitney in 1984.

1949 and based in Little Rock, provides power for more than 500,000 members of Arkansas’ 17 electric distribution cooperatives. His first position with AECC was to be the on-site representative for the construction of AECC’s first hydroelectric generating plant on the Arkansas River. The plant, the Clyde T. Ellis Hydroelectric Generating Station, was built at the James W. Trimble Lock and Dam near Fort Smith. This required that the family relocate, so they moved to Van Buren, Arkansas just across the river from Fort Smith. The plant was completed on time, under budget, and without any lawsuits. The dam became operational in late 1988 and in March of 1989, the Sharps moved back to central Arkansas, settling in the community of Maumelle, just outside of Little Rock. Although not the on-site representative, Steve was heavily involved in the construction of the two other AECC low-head, run-of-river hydropower plants on the Arkansas, the Carl S. Whillock Hydroelectric Generating Station at the Arthur V. Ormond Lock and Dam near Morrilton completed in 1993 and the Electric Cooperatives of Arkansas Hydropower Generating Station located at the Wilbur D. Mills Dam near Dumas, completed in 1999. Steve worked on numerous other repair, renovation, and new construction projects at AECC and Arkansas Electric Cooperatives, Inc. (AECI) headquarters and at other coop locations around Arkansas. Steve was very involved in the design and construction of the new

AECC/AECI headquarters building and the renovation of the Oswald Buildings at the headquarters. Steve began and developed AECC’s Fuels and Civil Department under the supervision of Louis Fish, Maurice Robinson, and Jonathan Oliver. As Director of Fuels, Steve was responsible for providing an economical and reliable supply of fuel to AECC’s generating facilities. He was also responsible for providing civil and structural engineering services on AECC projects ranging from power plants to building additions to substations. Throughout his career, Steve was very involved in fuel related organizations on a national level. A major focus of his efforts was to foster competition within the transportation system. One of these projects was the 321-mile Cowboy Line which stretched across northern Nebraska. Originally a C&NW line, the UP abandoned it in the 80’s. It was then used only for local grain traffic and a portion went to the Rails to Trails program. In the late 90’s a group of utilities looked at the feasibility of using the line to establish a shorter route from the PRB to Kansas City. The route would have fewer turns and lower grades. Ups and downs in the economy and concerns about the effect of onerous environmental regulations caused many of the interested utilities to withdraw from the effort.. Steve also worked in support of the ETSI Pipeline project. This coal slurry pipeline would have transported coal from the PRB to plants in Kansas, Oklahoma and Arkansas. The railroads

Coop Life

He began working at Arkansas Electric Cooperative Corporation (AECC) on January 2, 1986. AECC, created in

Judy Michaels and Steve Sharp in Napa for the 2006 NCTA Spring Conference COAL TRANSPORTER | 65

Mason (L) and Cruze (R) are Friends of Coal

Aubrey opposed this pipeline at every turn. The ETSI project was finally abandoned in 1984 because of falling energy prices and increasing concerns about water rights. The railroads were later found guilty of conspiring to stop the pipeline and were order to pay hundreds of millions of dollars in penalties. While this helped investors, it did nothing to help create more transportation competition. Over the years, Steve has provided testimony at many Surface Transportation Board and Congressional hearings. Not one to shy away from a fight, AECC took on the BNSF on the dust mitigation issue following the 2005 double derailments caused by inadequate track maintenance. Steve is often quoted in industry trade press and less frequently in publications such as the Wall Street Journal. For the last years Steve has been serving as the President of the Consumers United for Rail Equity, a rail shipper coalition focusing on rail competition. In addition to his day job and his national efforts regarding transportation, Steve volunteered his time and expertise to efforts to preparing for and responding to natural disasters of all types, but earthquakes in particular. He served on a number of community groups and advisory councils including the Arkansas Governor’s Earthquake Advisory Council and the Arkansas Pre-Disaster Mitigation Advisory Council. He has taught seminars on how to determine how a building will behave during an earthquake and how to evaluate buildings for safety afterwards.

Family Life and Retirement

While Steve was named the 2001 Arkansas Electric Cooperative Corporation Employee of the Year, he was apparently 66 | COAL TRANSPORTER

Claire not also husband of the year and Steve and Jan divorced. Later that year, he met Judy Michaels, a pediatrician from nearby Conway, at an ice hockey game in North Little Rock. They began dating and fourteen years later, they are still together. Judy also has three children. Her son Justin lives in Washington State near Seattle. Her daughter Lydia lives in Ashville, North Carolina. Her son Logan, his wife, Jennifer and daughter Aubrey live in Conway. Steve’s girls all have kids of their own now and still live in Maumelle. While they may not be ready to take on the Duggars over in Tontitown in terms of shear numbers, the combined families are a busy, happy bunch. Kelley’s son Mason goes to school down the road and since retiring last July, Steve sometimes has pickup and afterschool care duties. He also occasionally picks his grandson Cruze from school and often babysits when Whitney and her husband Shea are both working on the week-end. It should be no surprise that the toy selection at the Sharp house includes a foot powered ride-on locomotive sporting a Friends of Coal sticker or that a wooden railway is always at the ready for some creative track construction. While there is plenty of “Turtle Power” when Mason and Cruze get together, there is an ample supply of girl power too. Honey and Josh’s daughter Claire just turned one and is always a welcome guest when Mom and Dad have things to do. Judy’s granddaughter Aubrey gets weekly Grandparent, Inc. service to her dance lessons in Conway. And then there are the critters of the four legged variety that also make a house a home. As if the grandkids weren’t entertainment enough, two rescue dogs Blackie and Ebbie and two cats also demand their fair share of attention. A third dog, Bosco,

a sweet soul suffering from a degenerative muscle disease, recently passed away. Like most recently retired folks, Steve wonders how he ever found the time to work 40+ hour week. Several of the remodeling projects in the house are finally getting finished with prominent wall space reserved for pieces from Steve and Judy’s favorite artist, LeRoy Neiman. Steve remains active with the Arkansas Academy of Civil Engineers at the University of Arkansas where he was elected into membership in 1998 and is now serving as its immediate past president. The Academy recently inducted its 2014 members and Steve helped to spread the good news to inductees. It seems that the typical retirement activities of golfing and fishing are temporarily on the back burner. Steve is busy and Judy still has her medical practice. The couple does share a love for motorcycles and enjoys getting out for rides on the smaller back roads in the area. Although Steve had ridden in college, it was Judy that ended up getting him back into it about five years ago. “When I started talking about getting a motorcycle, Judy decided to buy a Honda 750 Shadow she spotted for sale by the side of the road.” It wasn’t until a year later that Steve picked up a 2000 Harley Davidson Road King Classic for himself. They have also managed a few hiking trips, most recently to Mount Magazine, the highest point in Arkansas, and to Cedar Creek, taking Aubrey on her very first hike. These two will keep life interesting for each other. Judy will keep picking things up from the side of the road and from the pound. Steve will find a way to make them work because of all the things that are great to engineer, the best thing to build is a good life. s

The humo sometime rous s serio , sometim us ra es mbl of be st frie ings nd Pete and A s nn.

The View from the Caboose

THE VIEW FROM THE CABOOSE By Pete Moss & Ann Thrawsite

Ann: Whatever happened to common sense?

Pete: How about the Yugo? Now that was one sweet ride.

Pete: I don’t know about cents, but I do know the buck ain’t what it used to be.

Ann: By sweet you mean that it had a rear-window defroster to keep your hands warm while you pushed it?

Ann: Not, cents like nickels and dimes, sense like why your parents didn’t have the sense to quit having kids after your older sister was born.

Pete: Ok, you got me there.

Pete: I know you’re frustrated, but no need to get personal, lassie. Ann: Sorry Pete. That was out of line. I am frustrated because we need innovation rather than regulation when it comes to energy. Even those folks that think the sky is falling should realize that new regulations in US won’t change a thing. Growing economies need energy to get their citizens out of poverty and they won’t be dissuaded by American “leadership” on this issue. Pete: The sky is falling (laughing). Good one. The Denier versus Chicken Little. It sounds like a WWE Smack Down match. It also kind of reminds me of the Y2K crisis. Remember planes were going to drop out of the sky. That Chicken Little guy gets around. I think most will agree that the money spent to avert that Y2K crisis was mostly a waste. Ann: We always have some new crisis that never comes to fruition. Predictions that we are going to run out of oil have been around for 100 years. In the 70’s they were so afraid of running out of natural gas that they made it illegal to use it for power generation. And more recently there was that whole Twinkie debacle. Pete: Hey, the Twinkie shortage was real. (sniff) I still have nightmares about it. Ann: All the new regulations on coal are just a back door way for the government to pick winners and losers which is socialism at its finest. One only has to look at history to see that socialism put more people into poverty than it ever brought out of it. The worst part of it though is that it stifles innovation. I can’t think of any great innovations coming from these economies.

Ann: All I’m saying is that innovation beats regulation every day of the week. While the constitution was specifically designed to limit government, the mountain of regulations does just the opposite. In 2014 alone, it is estimated that the government imposed $181.5 billion in new regulatory costs with 79,066 pages of proposed and final rules. Americans will feel higher energy bills, more expensive consumer goods, and fewer employment opportunities. Pete: Yikes, that’s a lot of red tape. I don’t feel like being innovative. I feel like hiding under the covers. Makes you wonder how America survived and thrived up to this point without the government regulating everything we do. Ann: Well you can hide under the covers at the Wigwam in Litchfield Park, Arizona at the annual NCTA Spring Conference. At least the NCTA is always trying to be innovative in the way they approach the industry. Pete: They will innovate your socks off if you let them. The fact that they let you and I babble about whatever we want is pretty innovative. Ann: Well, like the Yugo, sometimes where “you go” with it doesn’t always make sense. But I wouldn’t want to regulate what you say, because every once in a while, out of the mouths of babes…. Pete: Comes something innovative! Ann: In your case, something no one else would dream of saying, but I think you get the picture.

Have something to say to Pete? Send comments or questions to pete@nationalcoaltransportation.org COAL TRANSPORTER | 67

NCTA Membership List A. Stucki Company AKJ | NALCO Alliance Coal, LLC Alliant Energy Corporate Services Alltranstek LLC Alpha Coal Sales Co., LLC Alpha Products, Inc. Ambre Energy North America, Inc. Ameren Missouri American Electric Power Amsted Rail Appalachian Railcar Services, Inc. Arch Coal Sales, Inc. Arizona Electric Power Coop., Inc. Arizona Public Service Arkansas Electric Cooperative Associated Electric Power Cooperative Associated Terminals LLC Aventics Basin Electric Power Cooperative Blackhawk Mining, LLC Bowie Resource Partners CANAC, Inc. CDG Engineers, Architects, Planners CIT Rail City Utilities of Springfield Cleco Cloud Peak Energy Colorado Springs Utilities CONSOL Energy Inc. Constellation Consumers Energy Company Cooper Consolidated CPS Energy

Crown Products CSX Coal & Ore Terminals Dairyland Power Cooperative The David J. Joseph Company Detroit Edison Duke Energy Dynegy, Inc. Ecofab Australasia The Empire District Electric Company Energy Publishing, LLC Entergy Services, Inc. Exponent, Inc. First Union Rail FirstEnergy Florida Power & Light Company FreightCar America GATX GE Rail Global One Transport, Inc. Grand River Dam Authority Great River Energy The Greenbrier Companies Hall St. Coal Terminal Hendricks River Logistics Hi Crush Partners LP iIRX Jim Walter Resources, Inc. Kansas City Power & Light KCBX Terminals Co. Kiewit Mining Group Inc. Kinder Morgan Terminals Lexair, Inc. LG&E and KU Energy Locomotive Service, Inc. Lower Colorado River Authority

Luminant Energy Macquarie Rail Inc. MARK XVI Supply Chain Services, LLC Maxeefish LLC MEAG Power Metro East Industries, Inc. MidAmerican Energy Company Midland Railway Supply Midwest Industrial Supply, Inc. Miner Enterprises Inc. Minnesota Power MinTech Enterprises Mitsui Rail Capital, LLC Muscatine Power and Water Nebraska Public Power District New York Air Brake Northern Indiana Public Service NRG Energy, Inc. NV Energy OG&E Electric Services Oglethorpe Power Corp. Omaha Public Power District Otter Tail Power Company PacifiCorp Patriot Coal Corporation Peabody Energy Pickands Mather Group Platte River Power Authority Portland General Electric PPL EnergyPlus, LLC Progress Rail Services, Corp Rail Link Railroad Financial Corporation RAS Data Services

RESIDCO River Consulting RungePincockMinarco Salt River Project Sandy Creek Energy Station Seminole Electric Cooperative, Inc. SMBC Rail Services LLC Southern Company Generation Standard Steel Strategic Rail Systems Strato, Inc. T Parker Host Tampa Electric Company Tennessee Valley Authority Three Rivers Marine & Rail Terminals The Timken Company Transportation Services Inc TrinityRail Tri-State G&T Association TUCO/NexGen Coal Services Tucson Electric Power Company United Railcar Covers, LLC Wabtec Corporation We Energies Westar Energy Western Farmers Electric Western Fuels Association, Inc. Westmoreland Coal Sales Company WestRail Wisconsin Public Service Corporation Wood Mackenzie Xcel Energy Xcoal Energy & Resources Zinkan Enterprises, Inc.

Index to Advertisers AEP/ Cook Coal Terminals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 AKJ Nalco, an Ecolab Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Ambre Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Aventics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Cloud Peak Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Crown Products & Services, LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 FreightCar America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IBC GE Rail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 GE Water. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Jim Walter Resources, LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Lexair, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFC MCRL, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 MinTech Enterprises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OBC

68 | COAL TRANSPORTER

Mitsui Rail Capital, LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 NexGen Coal Services, Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Norfolk Southern. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 PRB Coal Userâ&#x20AC;&#x2122;s Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Progress Rail Services, Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Rail Link . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Slover & Loftus, LLP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Thompson Hine, LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Railroad Friction Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Westmoreland Coal Sales Company . . . . . . . . . . . . . . . . . . . . . . . . . 27, 62 WestRail. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Xcoal Energy & Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

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