NCTA Issue 1, 2017

ISSUE 1 | 2017

RAIL RUNNER TRAIN 2017 O&M Conference | Ride the Express to Santa Fe

NCTA Scholarship Winners Millennium Bulk Terminal

Can’t get replacement valves when you need them from other manufacturers? Can’t wait ten weeks or more for replacement valves? Tired of paying high prices for valve replacements? Need a valve now?

Lexair can ship valves to you in about two weeks depending upon quantity required! We can replace any competitor’s valve on virtually any brand or type of coal or aggregate car that has been built in the past forty-five years.

Second Generation Valve Features:

• Main valve element is based on our rugged “sliding shoe” construction – the same trouble-free design that has been used in our railcar valves for over two decades.

• A sequenced mechanical lock maintains the valve in the “door close” position regardless of outside forces or vibration.

• The locking feature is released only when an electrical or manual signal to shift has been received.

• A visual indicator is operated via the lock mechanism that clearly shows whether the valve is in the “door close” position with the valve element locked in place or if the valve is in the unlocked or “door open” position.

• Because they are mechanically locked in the “door close” position, the valves may be mounted in any position or orientation - the valve element does not have to be perpendicular to the rails.

• The units can easily be modified so that they can be linked to ECP Brake Systems in the future for communication of valve position status.

• The modular design allows the main valve unit to be removed/replaced in minutes without disturbing the electrical connection or plumbing when repair due to age or service conditions becomes necessary.

• Self closing solenoid cover/junction box can be locked to prevent unauthorized access to manual overrides.

• Our patented “Safety Check” technology (U.S. Patents 7,093,455 and 7,328,661) is available as a “no-charge” option.

• Innovative lock/indicator features latest Lexair, Inc. patented technology (U.S. Patents 8,038,231 and 8,256,850).

Typical Before Installation Photos

Typical After Installation Photos

Website: www.lexairinc.com E-mail: jjennings@lexairinc.com Ph: 859-255-5001 Fax: 859-255-6656

Contents 14

ISSUE 1 | 2017

20

44

FEATURES

DEPARTMENTS

6

Know Your Board: Brian Fuller

2

8

Get LinkedIn with the NCTA

Message from the NCTA President – Kent Smith

14

Millennium Bulk Terminal

4

PUBLISHED BY:

22

Waterborne Update: It’s a New Dawn

Message from the NCTA Executive Director – Tom Canter

National Coal Transportation Association

28

12

NCTA Membership Benefits

Who’s Who in the Trump Administration?

24

NCTA Committee Updates

30

Wyoming’s Integrated Test Center

40

Members Sound Off

36

Covering up Coal Dust

43

Calendar of Events

38

2016 NCTA Scholarship Recipients

43

NCTA Welcomes New Members

44

Reflections: Doug Glass

51

View from the Caboose

CONFERENCES

52

Membership List

10

2016 Fall Meeting & Conference Recap

52

Index to Advertisers

Denver, Colorado, September 14-16, 2016

20

Spring General Conference Preview

Tucson, Arizona April 10-12, 2017

26

2017 O & M Conference Announcement

Santa Fe, New Mexico, June 12-14, 2017

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 ©2017 NCTA. All rights reserved.

The contents of this publication may not be reproduced in whole or part, without the prior written consent of NCTA. 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.

26 COAL TRANSPORTER | 1

President’s Report / Kent Smith

A Message from NCTA President, Kent Smith

Now What?

I

once had a dog that when bored would start chasing its own tail. Despite multiple attempts and extreme effort he never was able to catch the darn thing. I often wondered what he would actually do if he was ever successful. As you may expect there are videos on the internet of cunning canines who have actually accomplished this fantastic feat. The proud, but perplexed pups all have a look of “now what?” on their faces.

I can’t help thinking the recent change in administration in Washington presents this same question for our industry. What do we do now?

For many years it has been difficult to maintain hope as the past administration’s agenda was clearly set to weaken and perhaps even destroy our industry. It seems we’ve been in a situation where sincere attempts at advocacy and educating the general public have been futile. The soundest, most convincing arguments felt like they landed on deaf ears. The science was settled. The debate was over. A lot of coal companies and coal miners were going to be put out of work. Those attempting to espouse differing views were often mocked, demonized, and in some cases even threatened with prosecution. We were the silent tree falling in the forest with no one around to hear us.

Then we caught our tail.

The new administration genuinely seems to want us to succeed. While the prospect of putting miners back to work is largely driven by markets and economics, at least we have someone rooting for us now. Those appointed to run the various agencies impacting our industry all seem devoted to loosening the chokehold of regulations. Many of the overreaching rules previously made, like the Stream Protection Rule, have either been reversed already or are in the process of being reversed.

The President’s Supreme Court nominee appears to be a highly qualified legal mind that believes in the constitutional Separation of Powers. In many ways we couldn’t have hoped for anything better. We got what we wanted.

So now what?

We could be satisfied with the changes and finally relax a little but I believe this would be a colossal or, forgive me, “yuge” mistake. It’s naïve to think our detractors will simply give up.

During the weeks after the election the news was filled with reports of how they were going to change their strategy. According to these reports they plan to focus even more of their abundant

2 | COAL TRANSPORTER

assets in the legal arena and at the local level. Accordingly, I believe the individual men and women of our industry need to increase our focus where we can. Hopefully that’s where our organization can play a part.

As we’ve said in the past, the NCTA’s budget simply won’t support any sort of meaningful external advocacy campaign. We can’t begin to compete with the massive budgets those working against us have at their disposal.

But at the local level we are on much more even ground.

And it’s on that level I believe we have a new opportunity to share our message with people that just might actually listen now. We can also individually make sure our elected representatives understand our views.

One of the NCTA’s goals is to provide members information and resources to help them influence their own communities. We plan to increase our focus in this area. Our conferences and publications will continue to contain this type of information.

We could be satisfied with the changes and finally relax a little but I believe this would be a colossal or, forgive me, “yuge” mistake.

In today’s world one of the most effective methods of sharing information is social media. It’s in this area I think we have a great opportunity expand our outreach. NCTA is active in LinkedIn and frequently posts interesting articles supporting, or of interest to, our industry. Unfortunately a very small portion of our members have actually “linked in” with LinkedIn’s NCTA group. It would be great if more of us began to utilize this resource, sharing or discussing things we’ve ran across as well. If you haven’t signed up I encourage you to do so. Instructions can be found later in this issue.

So unlike that lucky Labrador who doesn’t know what to do when that elusive appendage is apprehended, let’s take full advantage of this rare opportunity we have been given to effectively get our message out and move forward with new resolve. s Kent Smith President, NCTA

ARS Providing Quality Railcar Services

Appalachian Railcar Services, Inc. • • • • • • • • •

AAR M-1003 Quality Assurance Certified Railcar Maintenance & Repair Wreck Work / Mobile Repairs Railcar Storage (over 10,000 car capacity) Coal Loading/Unloading Plant Switching Own, Lease & Sell Railcars (Rail Connection, Inc.) Trucking Services (Appalachian Transfer) Tank Car Repair (Appalachian Tank Car Services)

CONTACT

TERRY “BRUZ” HICKS President of Sales thicks@apprailcar.com 304-543-4613

KEVIN KOEPKE V.P. of Sales (ARS Nebraska) kkoepke@arsnebraska.com 402-705-0549

ARS REPAIR LOCATIONS WEST VIRGINIA POINT PLEASANT [CSX] GASSAWAY [CSX] PETERSBURG [CSX] VIRGINIA

RADFORD [NS]

TENNESSEE INDIANA

MILAN [CSX, WTRR] KINGSPORT [CSX, NS] SHELBURN [CSX] EARL PARK [KBSR, CSX, NS, UP, CN, TPW]

WWW.APPRAILCAR.COM

OHIO NEBRASKA

WARREN [NS] GRAND ISLAND [BNSF & UP] HASTINGS [BNSF & UP]

Executive Director’s Message / Tom Canter

A Message from NCTA’s Executive Director, Tom Canter

N

ational elections do have consequences. The shock, euphoria, and despondency should be history three months after the election. However, the anti-fossil fuel special interests and the anti-Trump groups still have not accepted the results of the election. The coal-mining states and manufacturing states supported coal and in several cases the electorate switched parties to deliver stunning results. Trump carried just above 83 percent of the counties in the United States, and won in almost all coal-producing states. Nothing new in this recitation of recent events. What we want to know is will the change in Administration yield positive results for the coal industry including coal transportation?

Let’s face it, we do not have a crystal ball (not even CoalTar the Magnificent) that will predict the future of the industry with great certainty. We feel certain that we are not facing new job-killing regulatory rules in the next few years. I just returned from a coal conference and recognized the cautious optimism about the future of the coal business by carriers and producers

Let’s face it, we do not have a crystal ball (not even CoalTar the Magnificent) that will predict the future of the industry with great certainty. and the steel industry. The utilities are not as certain that there will be substantial growth in coal consumption as the die is cast for resource planning over the near term. Of course, the resource planning laws and rules of states have recently favored intermittent power sources. Then, one must add in the production tax credit and the investment tax credits available to the generators of intermittent electric power. If the preceding distortion of economics is not enough, there is the over-pricing of residential rooftop solar being sold to the grid under tariffs.

Natural gas prices have not increased enough to unequivocally favor coal as a generating fuel. Placing it all together, the electric utilities have a tough decision to favor coal without an overarching change in the regulatory burden and the economics of natural gas generation.

4 | COAL TRANSPORTER

The good news is that it is highly possible the regulatory burden is about to change for the better. Indeed, in the first week of February, Congress finally stepped up to its obligation for regulatory review and negated the EPA’s latest rule called the Stream Protection Rule. This cynical rule intended to eliminate mountain-top removal mining in Central Appalachia has unexpected negative consequences for long-wall mining and surface mining.

Unbelievably, this rule was promulgated by the Obama Administration in December 2016 with an effective date of January 19th as a sharp stick in the eye of the incoming Administration.

There is more optimism. The moratorium on leasing of Federal lands for mining will be reversed. The Clean Power Plan should be either reversed or mitigated. Executive Orders will restrain the regulatory agencies from adding more burden to wealth production. The EPA will no longer be an economic prevention agency. Perhaps, expensive tax credits for intermittent power production will finally expire.

Why all the need for change? Remember, all burdensome regulations impinge on freedom in some manner. Wise and vetted regulations are beneficial, but solely political regulations do not provide the protection to human health, safety, and economic well-being that were intended when Congress gave some of its authority to regulatory bodies. Accordingly, over the last several years, the Federal debt has doubled, food stamp usage has doubled, labor force participation is down about 6%, and median family income is down by $5,000 per year. This is a cry for change.

I will harp on an old theme. A nation does not become wealthier unless the nation creates new wealth and stops relying on a redistribution of its old wealth. History of the rise in wealth of nations is quite clear. We must take natural resources and convert them to a high value tangible product to create real wealth. So, what do we need? A resurgence of manufacturing and steel production will directly revitalize the coal markets by increasing demand for coke and electricity and GDP growth that is greater than the increase in population. Yes, your adult children will find good jobs and prosperity will be available for more than just the few.

Have a safe day producing energy and wealth for the good people of North America. s

WHEELS AND AXLES PISTONS CONTROL SYSTEMS

TCHERS SMART CONSIST

ANSIT LOCOMOTIVE OCOMOTIVE INTERFACE GATEWAY

MOBILE MAINTENANCE 710ECO REPOWER OVERHAULS OEM CERTIFIED REBUILT

ENGINES

POWER ALTERNATORS PRODUCTS

IL ANAL ANALYTICS AINING PAINTING FREIGHT LOCOMOTIVES ESS POWERVIEW LEASING EVENT RECORDER ENERGY ASSEMBLIES LOCOMOTIVE RETRO-FITTING

MANAGEMENT REPOWERS

TRACTION MOTORS

SERVICING

DRONE INSPECTION SIGNAL ENGINEERING

MAINTENANCE-OF-WAY EQUIPMENT

REBUILDS

CONSULTING FRA INSPECTIONS

MOBILE WELDING

RELAY

RAIL RAIL RECYCLING ULTRASONIC DATA ANALYTICS OTM OTM INSPECTION LEASING RAIL WELDING FREIGHT CAR RECYCLING

RAMPS AXLES

WHEELS

TECHNOLOG

One company keeps you

170020

CONNECTED. One Company. One Team. progressrail.com

•

@Progress_Rail

Know Your Board / Brian Fuller

Know Your Board:

Brian Fuller

B Brian Fuller

Director, Coal Services Southern Company Services

“Southern Company values its partnership with NCTA with all the various issues in transportation space.

We participate heavily in the O&M group and we have held leadership roles in that group.”

rian Fuller is the Director, Coal Services, Southern Company Services, headquartered in Birmingham, Alabama. He has held this position since February 2015. His responsibilities include management of coal and transportation procurement, logistics, rail car leasing and maintenance, and by-product marketing. The Southern Company coal fleet includes over 17,000 MW of capacity in four retail jurisdictions of Alabama, Georgia, Florida and Mississippi. Southern Company burns approximately 40 M tons of coal per year.

The Coal Services position today deals in an increasingly volatile fuel environment as the company transitions its portfolio of generating resources to include a higher percentage of gas and renewable generation. “We are not a base load operation anymore, and that makes the job both challenging and rewarding in solving problems.” Brian’s favorite part of the job is the dynamic changes that occur frequently and being able to add value for our customers. “I love to interact with our internal customers such as plant managers and fuel managers, and I also love to interact with our suppliers, the industry is full of so many great people.”

Brian attended Mississippi State University in Starkville, graduating in 1992 with a B.S. in Mechanical Engineering. He began his career with Southern Company as a co-op student at Mississippi Power’s Plant Daniel in 1989 and worked 4 terms while also attending classes. After graduation, Brian accepted a full-time engineering position at Southern Company’s Plant Watson in Gulfport, Mississippi. His roles at the plant included technical services, operations, and environmental projects.

In 1997, he joined the Mississippi Power System Planning group and a year later relocated to Birmingham, Alabama to work in Southern Company System Planning.

Over the ensuing seven years, he took on many planning roles including Generation Development, Nuclear Development, Environmental Strategy and Integrated Resource Planning. Some of the scenarios the group looked at but that seemed improbable at the time are close to the new reality of the generation side of the business.

In 2005, Brian took over as the Retail Generation Development Manager responsible for retail generation projects and siting. From 2009-2012, he served as the Director of Energy Trading where he managed the buying and selling of power on the wholesale market. In 2013, Brian took on the job of Director, Fleet Operations, responsible for the commitment and dispatch of the Southern generation fleet. All of these roles helped him gain insight into the connections between the generation fleet and fuels thus preparing him for his current job.

Brian’s first personal experience with the NCTA was as the lead off speaker covering Southern’s Future Coal Perspective at the 2015 Operations and Maintenance Conference in Pinehurst, North Carolina. “Southern Company values its partnership with NCTA with all the various issues in transportation space. We participate heavily in the O&M group and we have held leadership roles in that group.” Brian is currently a member of the NCTA’s Board of Directors and is actively assisting in the development of timely and informative agendas for the Association’s annual conferences.

“I love to interact with our internal customers such as plant managers and fuel managers, and I also love to interact with our suppliers, the industry is full of so many great people.”

6 | COAL TRANSPORTER

Brian and his wife Meg, have been married for 22 years and have three children. They met at college and still enjoy attending Mississippi State sporting events together. Their oldest son Rob, following in his parent’s footsteps, is a freshman in the Honors Program at Mississippi State, majoring in Biological Sciences. Clara is a 16 year-old sophomore at Oak Mountain High School, where she is a member of the cross country, basketball and softball teams, and involved in Student Government. Lewis is a 7th grader at Oak Mountain Middle School, where he is a member of Show Choir and Scholar’s Bowl Team.

Involved parents, Meg previously served for four years as president of the Oak Mountain Middle School PTA and she has been the Team Mom for football, basketball and softball over the years.

Likewise, Brian is a Past President of the Oak Mountain High School Athletic Booster Club and coached youth baseball and basketball for many years. He still helps to coach Clara’s travel softball team each summer. A native of Moss Point, Mississippi on the Gulf Coast, Brian enjoys spending his leisure time on the Gulf, playing golf and savoring Cajun food. s

celeb r

Family time at the 2014 Orange Bowl Meg, Clara, Lewis, Brian, Rob

Summer Softball Brian and Clara

ing at

Slover & Loftus LLP Integrity | Experience | Leadership

YEA RS

With 50 years of experience representing coal consumers and producers in connection with commercial negotiations, strategic planning and analysis, alternative dispute resolution, litigation and regulatory proceedings.

www.sloverandloftus.com (202)347-7170 | Washington, D.C. COAL TRANSPORTER | 7

Join the NCTA

N

CTA LinkedIn group is a private group open to employees of NCTA Member companies. The purpose of the group is to share information, educate, and to extend the sense of community to those periods between conferences and committee meetings. This is also part of our effort to fight back in the war on coal. To join the group, go to the NCTA website, click on the “Join LinkedIn” banner and fill out the form. We’ll send you an invitation to join, so just accept and you’re In! Please note that you must be a member of LinkedIn to join the group and that if you search for the group on the LinkedIn site, you will not find it unless you are already a group member.

Educating Each Other

Group

One of the primary purposes of this group is to educate each other on the issues that impact our industry. There is a lot of information and a lot of misinformation floating around out there. By combining our resources we will have the facts at hand to push back on the misinformation and outright lies. As you see articles and news features pertinent to the group, post them. Sharing an article is literally a 10 second task once you’ve installed the “bookmarklet” tool. Go to www.linkedin.com/ bookmarklet to find out how to get it installed.

Connecting a Thriving Community

A second purpose is the fundamental building block of social media, connecting our members. While nothing will replace the face to face interactive opportunities that our conferences provide, this group can fill in the gaps between conferences and committee meetings. The coal community is a thriving one and it is amazing how few people contribute so much to the overall energy picture. This group will help members build their personal networks in a professional setting.

Building Thought Leadership

Fighting back in the war on coal will take either an army of lawyers or a group like this creating some leadership on how to make this issue personal for the average ratepayer before it is too late. Everyone has ideas and sometimes one idea will spark another and soon you have created a number of winning arguments.

Staying Informed on Association Activities

This group will also allow members to stay informed about association activities and provide direct input to the staff and the Board of Directors. Every Board Member has committed to participate in the group.

Questions?

Just contact anyone on the NCTA staff and we can help.

8 | COAL TRANSPORTER

s

Innovation. Dedication. Experience.

Over a century of dry bulk and breakbulk transport and handling.

Innovative Transfer Technologies. Seamless Logistics Packages.

Dedicated Customer Service.

www.cooperconsolidated.com • scott.becnel@cooperconsolidated.com

NCTA 2016 Fall Conference / Review

NCTA 2016 Fall Conference Grand Hyatt - Denver, Colorado | September 14-16, 2016

T

he NCTA held its 42nd annual Business Meeting and General Conference at the Grand Hyatt in Denver, Colorado, September 12th-14th, 2016. The Obama Administration’s war on coal had been taking no prisoners and utilities, producers, and transporters had all been pretty beaten up. Odds makers were betting that the future held more of the same.

Thus the theme of the 2016 conference was “We’re All in This Together!” In addition to a full agenda, participants enjoyed time to network at several hosted receptions and customer events. The receptions were held in the 38th floor Pinnacle Club and guests enjoyed panoramic views of the Rocky Mountains and the Denver metropolitan area.

The triangle in the NCTA logo represents the three legs of the coal supply chain. All three were represented on the podium at this event. Eric Butler, Executive Vice President and Chief Marketing Officer of the Union Pacific Railroad gave the Keynote Address on Tuesday morning. Colin S. Marshall, President and CEO of Cloud Peak Energy Inc.

provided a producer perspective. John Trawick, Chief Operating Officer of Southern Power discussed the challenges utilities face with their generation portfolios in the current environment.

Of course new and expensive regulations were not the only hurdles coal faced in 2016. Bob Yu, Senior Analyst, S&P Global provided an analysis of natural gas supply and demand. However, oil and gas face challenges too, as outlined by Tracee Bentley, Executive Director of the Colorado Petroleum Council. Market updates on waterborne logistics and new fuel dynamics were supplied by Abby Caplan, Editor, Argus Media and Dr. James Stevenson, Director NA Coal, IHSMarkit respectively.

For those of us that know how reliable coal generation is, an underlying nervousness is hard to shake as the grid becomes more dependent on non-dispatchable and intermittent resources. J.T. Smith, Director Policy Studies for MISO discussed how dispatching effects fuel sourcing and Richard Dillon, Director, Southwest Power Pool covered grid stability and integrating renewable generation.

2016 Fall Conference Sponsors BANNER SPONSORS Argus Media, Inc. Thompson Hine LLP WestRail a Division of Aero Transportation Products

10 | COAL TRANSPORTER

WELCOME RECEPTION

And what would an election year be without some (more) politics?

We were pleased to be able to hear from Cynthia Coffman, the Attorney General of the State of Colorado on her decision to join with other states to challenge the Clean Power Plan. Both the Clinton and Trump campaigns had been invited to address the group and while the Clinton campaign declined, Ray Scott, a Colorado State Senator spoke on behalf of the Trump campaign. Christian Palich, President of the Ohio Coal Association spoke on the challenges and politics in the Ohio coal fields. We also had two representatives from Washington DC, but the good kind working on behalf of coal. John Gray, SVP, Policy and Economics for the AAR gave an overview of the economy and Sandra Brown, Partner, Thompson Hine LLP updated the group on activities at the STB. The meeting concluded with two breakout sessions, one to discuss continuous improvement to NCTA forecasting process and a second a private viewing of the documentary Climate Hustle. s

GRAND RECEPTION

Angeline Chong, Kathy Benham, Duane Richards, Amy Newton

Barbara O’Neill, Tom Canter, Gary Levin

Colorado Attorney General Cynthia Coffman and Melinda Canter

Tom Zolnerowich, Allen Gould, Lee Adams

Ken Miller

Nancy Chen and Terri Humphries

Kathy Benham and Shaun Arnold

Kenn and Janice Gray

Terry Hicks and Mike Kelly

Linda Brandl, Scott Marino, Jill Siekmeier

Tim Ewing and Mark Anderson

John Mayer, Elizabeth Hansen, Dan Applebaum, Mark Coady

COAL TRANSPORTER | 11

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.

Waterborne Transportation Committee

The Waterborne Transportation Committee is the NCTA’s newest working group. It focuses on the coal industry’s unique logistical, regulatory, and infrastructure needs when moving coal by water - the Great Lakes, rivers, terminals, barge capacity, ocean shipping, rail to water logistics, and much more.

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 meets in Washington, D.C. periodically 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.

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

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.

Annual Dues

The annual dues for membership in NCTA are $1,850 for Voting Members and $1,650 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

Infrastructure / Millennium Bulk Terminals

Building a

COAL TERMINAL

on the Left Coast

Millennium Bulk Terminals-Longview forges ahead

By Wendy Hutchinson

14 | COAL TRANSPORTER

T

here’s plenty of opposition to coal without going out and looking for it. But it may seem like that’s exactly what Millennium Bulk Terminals-Longview did when it launched its effort to build a coal terminal in the Pacific Northwest some six years ago. Why would any company in its right mind undertake an enterprise in such a hothouse of green activism?

Why? Because sometimes when opportunity knocks, it knocks loud enough to make it worth taking a few lumps to pursue it. This was the case when Millennium opened its doors in 2011. In spite of the assured challenges, building a coal terminal on the West Coast carries the powerful promise of good jobs and economic growth in Washington state and across America, energy security for key U.S. allies and trade partners in Asia, and a highly favorable long-term business proposition for Millennium, chief investor Lighthouse Resources and key suppliers Arch Coal and Cloud Peak Energy.

Certainly some questioned pursuit of a coal facility in the Pacific Northwest. In this very publication in 2015 an article on coal exports states: “Today the Pacific Northwest has lost its onetime luster.”

What keeps us going on this quest to open up a coal export terminal in the Pacific Northwest is the belief that Millennium is the right project in the right place done the right way. And in spite of the vigorous Power Past Coal-funded opposition, we are confident that the project will be successfully completed.

Millennium is in the right place.

It’s located on the Columbia River in Longview, Washington. The site was originally developed in 1941 to house a smelter for Reynolds Aluminum.

For years, the smelter and the adjacent timber mills were the engine of industry in Longview and Cowlitz County.

Longview is the first planned city funded by private industry. It is where the western rail system meets the deep water ports of the Columbia River. It is the home of people whose lives revolve around the natural resource industry.

But the timber industry has shrunk and the smelter has shut down, resulting in significant job losses. For the past ten years the 530-acre smelter site has been underutilized. For the small town of Longview, in painful contrast to its more prosperous neighbors in Seattle & Portland, recessionera unemployment levels have persisted.

Meanwhile, Longview’s great geographical potential to be a bustling deepwater port city is not being fully realized.

Enter the Millennium project, representing $680 million in private investment. Millennium is working to clean up the brownfield site and redevelop it into a world-class importexport facility, creating jobs and badly needed new tax revenue in Longview and Cowlitz County. The coal terminal creates 2,650 direct and indirect familywage jobs and generates $43.1 million in state and local tax revenue during construction. The project will provide 300 direct and indirect jobs with $5.4 million in state and local taxes annually when the terminal is at full buildout.

The new coal export terminal will ultimately have the capacity to handle 44-million metric tons of coal annually – 48-million short tons for those who are metrically impaired.

Millennium is seen as a welcome step forward by the local community.

It’s fair to say that support took some time to manifest. It was a welcome sight to gain endorsement from the local newspaper and enjoy a headline of “We Stand with Millennium”.

From the mayor and city council to the local newspaper and labor unions to community groups and individual citizens, support has become overwhelmingly positive. In an era in which NIMBY – Not In My Back Yard – is a familiar acronym, this community welcomes the jobs, economic growth, and brighter future that Millennium will bring. Not to say that we don’t have a small group of local opposition – we chat with them at various neighborhood events and they tend to oppose all development on the river – so I can’t take that personally. Or as one of our local opposition noted as he kindly introduced me to one of his somewhat surprised friends: “Just because we disagree, doesn’t mean we need to be disagreeable.”

But the fact is that the reported busloads of opposition who are asserting a NIMBY-attitude and claiming “we don’t want this project here” don’t live in this town, this county or even this corner of the state. I find it ironic that the people that live here want this project in their back yard, but out-of-town interests are saying they can’t have it in “their” back yard. This raises the question: just how big is the back yard? And if that concept is so liberally defined as to include the entire state of Washington, then why stop there?

For the landlocked interior states, the West Coast can be considered a back yard too. And the only way for such states to get their products to profitable Asian markets is from that national back yard.

This explains why during our multiple public comment periods the agencies received comments of support not just from the States of Wyoming, Montana, and Utah, but also from North Dakota and South Dakota. These states view Washington as their back yard and direct path to get their energy and agricultural goods to market. Naturally, this group of neighbors is quite enthused about this project in their back yard.

The world-class Millennium port facility in Longview, Washington is the right project in the right place done the right way.

COAL TRANSPORTER | 15

The completed coal terminal will serve the right market with the right product.

Coal loaded and shipped through MBTL will come from the western United States.

Millennium is serviced by both the BNSF and the Union Pacific railway – able to provide export services for the coal fields in Montana, Wyoming, Utah and Colorado. The coal is destined for Japan and South Korea - both are among the world’s top five coal importers and both are among Washington state’s top five trade partners.

How strong is this market? The International Energy Agency (IEA) concluded in 2015 that Southeast Asia’s energy demand will grow by 80% by 2040, with electricity demand tripling in that time. The IEA also noted that the share of coal used in power generation will rise from 32% to 50% during this period. Market demand in Southeast Asia is clearly alive and well for the long term.

Japan and South Korea exemplify these trends in energy demand and increasing reliance on coal. Both countries lack meaningful domestic natural energy

16 | COAL TRANSPORTER

resources and must rely on imported sources of energy. Coal is a major source of energy in both countries for base load electricity. Both countries’ economies and planned economic growth depend on coal for a substantial portion of a stable, reliable energy supply, a dependence that will continue for decades to come.

Coal has always been an important part of Japan’s energy mix, and the postFukushima suspension of nuclear energy has lead Japan to announce the planned construction of 45 new coal-fired power plants. Historically, South Korea has also always relied on coal as an important part of its base load electricity. The country’s economic revitalization - the famed “Miracle on the Han River” - was in large part made possible by coal as a key energy source.

Japan and South Korea view energy security as a matter of survival, both economically and as a fundamental component of their national defense. With current coal import sources in Indonesia significantly changing, the need for consistent and diversified supply sources is intensifying. The Indonesian government recently announced that it expects

to reduce future coal export tonnages in order to supply their own domestic markets. South Korea and Japan are both interested in importing coal from the United States as a trusted ally and reliable trading partner. Today, neither country imports an appreciable percentage of its coal from the U.S. As a nation, the United States should welcome this interest from two major trade partners and key allies in a critical part of the world. The U.S. also has substantial trade deficits with both countries, and Millennium moves the trade imbalance needle in the right direction.

Millennium has encountered substantial resistance from those decrying the world’s continued reliance on coal.

Most recently, some of these objections have referenced COP21, the Paris Agreement of 2015. But that agreement does not specifically mention coal, any other fossil fuels, or any other energy sources.

It specifically acknowledges the importance of “equitable access to sustainable development and the eradication of poverty,” and focuses on the reduction of greenhouse gas emissions, not the elimination of coal.

Japan and South Korea, both signatories to the Paris agreement, are at the cutting-edge of utilizing and developing the most efficient coal burning technologies. Japan’s stringent environmental standards include a goal to operate all coal-fired power generation plants with ultra-supercritical pressure by the year 2020, moving thereafter to advanced ultra-supercritical pressure and integrated coal gasification fuel combined systems (IGCC). South Korea currently has one of the world’s largest shares of supercritical or ultra-supercritical power generation plants in its coal-fired power plant fleet.

These new technologies are each HELE: High Efficiency/Low Emission technologies for generating electricity from coal.

Further, Japan and South Korea have expressed strong interest in U.S. coal. That’s not surprising. Powder River Basin coal from Montana and Wyoming is lower in ash, sulfur and mercury than the available alternatives from Indonesia. In addition, while Japan already has the world’s highest efficiency coal-based electric generation system, it is also developing advanced clean coal technologies based on coal gasification. Because of

its distinct characteristics, coal produced in the Powder River Basin region of the United States is the most suitable fuel for the highly efficient gasification -based technologies. PRB coal is favored because of both low ash content and low ash fusion temperatures. In the gasification portion of the process, low ash fusion temps of PRB coal allow its ash to melt at lower temperatures and be eliminated from the process stream faster than with any other coal. This allows the gasification process to move at a faster rate than with any other coal.

What’s also been important to the success of Millennium is doing the project the right way.

Success in any operation is part engineering, part operating practice and a whole lot of leadership. From the start of the design phase Millennium was committed to utilize proven technology with environmental compliance as a design criteria. The project has been subjected to an unprecedented and rigorous environmental review process.

Both Japan and South Korea will continue to depend on coal for a stable, reliable energy supply for decades to come. The inscription on this poster, seen at the office of Japan’s Ministry of Economy, Trade and Industry during the Washington state trade mission in 2015, reads: “Coal, a gift from the earth.”

COAL TRANSPORTER | 17

Millennium Bulk Terminals-Longview capitalizes on the natural advantages of the current industrial location. This 530-acre site has been underutilized for more than ten years.

After four years of study, the state and county issued a joint Draft Environmental Impact Statement (DEIS) that’s nearly 4,000 pages long. A few months later, the Army Corp of Engineers followed suit with its own 3,000page report. Public comments have been received, and the EISs are scheduled to be finalized in the first half of 2017. The good news is that the design has been validated by these regulatory studies and the agencies have concluded that we can build and operate the terminal while meeting strict state and federal environmental standards that are protective of human health and wildlife.

Millennium is an operating port with a strong performance record. This workforce has achieved over 5 years without a lost time incident and we just surpassed 6 years on site with zero environmental violations. This has not been without challenges as this 75-yearold heavy industrial site was in severe disrepair when it was acquired.

Millennium operates in Longview and our employees are our best spokespeople for the company. We’re out in the community every day explaining what the project means, answering questions, joining in common community causes and contributing to solutions.

While there are important issues to resolve and more hurdles to overcome, we remain confident that our major permits will arrive in 2017.

18 | COAL TRANSPORTER

Coal Export Terminal Stage 1 Construct infrastructure to transport coal from trains to storage to ships

Coal Export Terminal Stage 2 Construct additional infrastructure on site to increase export capacity

Separate Potential Bulk Products Terminal Expanded bulk terminal with facilities to store and transport raw materials

Existing Rail Reynolds Lead

Dock 3

Dock 2

Columbia River

Dock 1 Coal Export Terminal Stage 2 Construct a ship loader on Dock 3 Increase export capacity to 44 million metric tonnes/year

Coal Export Terminal Stage 1 Construct Docks 2 and 3, with a ship loader on Dock 2 Dock 3 operated as a layberth Total export capacity of 25 million tonnes/year

This will be a big year for Longview and Millennium. It’s been a long and arduous journey together, but the destination is just up ahead. That’s what makes Millennium Bulk Terminals the right project in the right location done the right way. It may even be accurate to say that the Pacific Northwest is about to regain its luster. s

Separate Existing Bulk Products Terminal Millennium is maintaining Dock 1, which is currently used to receive alumina for transport by rail to Wenatchee Dock 1 to be used for additinal bulk products

Site Rendering MillenniumConceptual Bulk TerminalsLongview will be constructed in two stages. Following clean-up of the existing brownfield site, portions of current operations will be incorporated into the new port facility.

Join the largest Coal Users’ Group in the world for their Annual Conference! Through fast-paced presentations, innovative keynotes and collaborative panels, we’re covering human performance, combustion tuning, coal handling, wet dust extraction, low load and cycling operations, and lessons learned, lessons applied.

17TH ANNUAL MEETING

APRIL 10-13, 2017 MCCORMICK CENTER WEST CHICAGO, IL REGISTER BY MARCH 10TH WITH CODE NCTA17 TO SAVE $200 OFF THE FULL CONFERENCE ONSITE RATE! www.prbcoals.com

NCTA 2017 Spring Conference / Preview

NCTA 2017

Spring Conference Loews Ventana Canyon Resort, Tucson, Arizona | April 10-12, 2017

I

t has been a while, but the NCTA will return to Loews Ventana Canyon Resort in Tucson for its 2017 Spring Conference. The 21st annual golf tournament will be held Monday afternoon April 10th. The Monday evening dinner will allow plenty of time and space for networking. 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 $700.00 for attendees representing a member company and $900.00 for all other attendees when registering prior to March 24th, 2017. In addition to the conference, the fee includes Monday’s reception and dinner, and continental breakfast on Tuesday and Wednesday. Beginning March 25th, an additional $100 fee will apply for all late registrants. All registrations by a nonmember company for more than three individuals will be registered at the member rate. There are nominal fees for guests and the optional golf tournament.

SPONSORSHIP:

Conference sponsorship opportunities are available for many of the scheduled events including the reception, dinner, music, and breakfast. We recognize our sponsors in multiple ways before, during, and after the event. It is easy to pay online through the registration process or by requesting an invoice.

20 | COAL TRANSPORTER

PROGRAM:

As always, you can expect a robust agenda that will get you up to date on the many issues challenging to the coal, transportation, and utility industries. Confirmed speakers include: • John W. Eaves, Chief Executive Officer, Arch Coal, Inc. • Alan H. Shaw, Executive VP & Chief Marketing Officer, Norfolk Southern • Ian Yeates, Director, Supply Development and Carbon Capture, SaskPower • Finn Host, Management Team, T. Parker Host, Inc. • Jason Begger, Executive Director, Wyoming Infrastructure Authority • Dr. Karen Obenshain, Senior Director Fuels, Technology and Commercial Policy Edison Electric Institute • Wendy Hutchinson, VP Public Affairs, Millennium Bulk Terminal Longview • Dan Fapp, Senior Vice President, L.E. Peabody & Associates, Inc. • John T. Hanou, President, Hanou Energy Consulting, LLC • Daniel Rusz, Research Director, Wood Mackenzie • Report on the NCTA Coal Forecasting Process

ACCOMMODATIONS:

Nestled against the dramatic backdrop of the Catalina Mountains, the adobe-style Ventana Canyon Resort is the perfect blending of environment, nature and comfort. Known for its breathtaking views, the resort features 398 luxury guestrooms, including 27 suites. Guest rooms offer sitting areas, free Wi-Fi, flat-screen TVs, iPod docks, and Keurig coffeemakers.

Amenities that abound on the property include two heated pools with a Jacuzzi and two Tom Fazio-designed PGA championship golf courses that are just steps from the lobby. Guests can enjoy the lakeside spa, the fitness center, one of the eight lighted tennis courts or the many hiking and biking trails. There are four restaurants on property: the upscale Flying V Bar & Grill, the friendly Canyon Café, the poolside Bill’s Grill and the grab and go Vista Barista. The Blues, Brews & BBQ Sunday Brunch is a weekend institution at the hotel. The lobby’s Cascade Lounge with its two-story glass wall overlooking the pool and mountains is sure to be a favorite meet-up spot for attendees.

The usual resort charge of $25/day will be waived for NCTA attendees. The resort charge includes self and valet parking, Lakeside Fitness Center access, yoga and fitness classes, unlimited local phone calls, the shuttle to Sabino Canyon and one hour tennis court rental.

The block cutoff date for guaranteed reservations is March 20th. Loews Ventana Canyon Resort is located at 7000 N Resort Dr, Tucson, AZ 85750 s

RESERVATIONS: 1-800-234-5117 or 520-299-2020 ROOM RATES PER DAY: $169.00/day Single/Double includes internet access.

MONDAY, APRIL 10 8:00 am – 11:30 am NCTA Board of Directors Meeting 12:30 pm – 4:30 pm 21st Annual Golf Tournament Ventana Mountain Course 6:30 pm – 9:30 pm Reception and Cena de Celebración

TUESDAY, APRIL 11 7:00 am – 8:00 am 8:00 am – Noon Noon – 1:30 pm 1:30 pm – 4:00 pm

Continental Breakfast General Session Lunch by Individual Arrangement Breakout Sessions

WEDNESDAY, APRIL 12 7:00 am – 8:00 am Continental Breakfast 8:00 am – 11:30 am General Session COAL TRANSPORTER | 21

Waterborne Transportation / Outlook

By David Ryan, Vice President Associated Terminals

It’s a New Dawn…

I

t’s a new day and I’m feeling good”. And so Ms. Nina Simone sang. But even with her optimistic lyrics, the trepidation of her voice belied her outward optimism, and the haunting melancholy of the music also told a different story. And so, Nina called out to the birds, the sun, and the sky looking for affirmation in hopes of feeding the optimism. I think I know, right now, just how she felt.

Being on the waterborne transportation end of things as a mid-stream stevedore, I feel like we, along with the barge lines, are the bellwether of the economy since we touch a majority portion of the dry bulk commodities moving into, or out of, the country. If we’re busy, then the economy is good -if we are slow, then the economy is slow. This has never been more evident than over the last few years. With us handling virtually all types of dry bulk commodities, we’re typically hedged against the valleys of any single commodity–when one is down the other(s) are up, or at least steady. This hasn’t been the case over the last few years.

As you and I both know, our economy, despite what the talking heads have told us, has been a wreck. Imports and exports alike have been down. Commodity prices have been down. While coal has likely taken the hardest hit of all of the commodities, none of them have been spared. But we also all know there has been a government sanctioned war on coal. Calculated and instituted to appease the left, and propagated by the Greens. And it very quickly developed allies with the gas and renewable energy companies, after being lucky bystanders of the war, only to then quickly jump on the train.

22 | COAL TRANSPORTER

“Fish in the sea, you know how I feel” “River running free, you know how I feel” “Blossom in the tree, you know how I feel” Much like when the horns start to punch in Ms. Simone’s song, bolstering her feelings, strengthening her resolve, the horns started to blow for the waterborne transportation folks in September when the Water Resources Development Act (WRDA) was overwhelmingly approved by congress, clearing the way for funding and projects which will help improve the inland waterway system as a whole. The bill, in a nutshell, requires that eventually all of the funds collected under the Harbor Maintenance Trust Fund (HMTF) are allocated and used for the intended purpose of maintaining and improving the inland waterway systems of the United States. Increased dredging funds, repair or replacement of old dilapidated locks and dams, for example.

Further building towards the crescendo, something happened around November that seemingly changed sentiment in the entire market, and then prices of commodities started to incline, some small gains, others not so small. Subsequently, API 2 numbers jumped into trade/sell area and Coal has since been being exported at an accelerated rate. Detractors keep predicting the fall of API 2 with a drop in price, but seemingly with each downturn, a climb follows, keeping a fairly steady market (if your heart is strong enough to watch it day-to-day). That being said, from my own boots-on-the-ground perspective, my coal exports for Nov/Dec/Jan has surpassed what I’ve done in the previous 3 years combined. Others are seeing it as well. The optimists of the markets that I speak to are projecting steady numbers into Q3 already.

So, the question is… what happened in November that changed things? Was it the election? Was it the scale back by the Chinese? Europeans opting out of the nuclear program?

Well… yes, yes, and yes.

But while there are several factors that contributed to the immediate market uptick in Q4, I’d like to believe the market rebound is growing and it just may stay awhile. I believe the timing of the uptick alongside of some of President Trump’s proAmerican, pro-Business executive moves, could be the right mix at the right time to truly recharge the markets.

Crown-FEB2017-3-5x9-875-Coal Trans ad-vert-final.pdf

Among the notables since he has taken office, in addition to his promise to put miners back to work, he has identified his top 50 infrastructure and transportation projects. Here are a few of those projects listed (by rank on his list) that should have waterborne transportation folks, aboard the S.S. Optimism (pardon the pun) along with me: 3) National research lab for infrastructure 4) Locks & Dams 52 & 53 on the Ohio River 7) Deepening of the Mississippi River ship channel dredging to 50’ 19) Savannah Harbor Expansion Acceleration 32) Port Newark container improvements 37) Upper Mississippi River locks 20-25 38) Illinois River locks LaGrange and Peoria 41) IHNC lock New Orleans 42) Chickamauga lock 43) Soo locks reconstruction 45) Upper Ohio navigation improvements to Emsworth, Dashields, & Montgomery locks and dams 46) Monongahela River locks and dams You can see the entire list here: www.documentcloud.org/ documents/3409546-Emergency-NatSec50Projects-121416-1Reduced.html “Dragonfly out in the sun you know what I mean, don’t you know Butterflies all havin’ fun you know what I mean Sleep in peace when the day is done And this old world is a new world And a bold world” Of course it remains to be seen what the long term outturn is. But I’m seeing indicators right now that I haven’t seen for some time and so I too, am looking to the birds, the sun, the sky, but mostly to Washington for affirmation, but for now it seems…

“It’s a new dawn It’s a new day It’s a new life For me And I’m feeling good…” …or at least cautiously optimistic and hopeful. s

1

2/8/17

Innovative. Reliable. Driven.

Put a century of combined experience in chemical use and application to work for you!

Coal-Handling Solutions • • • • •

Dust Suppressants Side Release Anti-oxidants Rail Car Toppers Freeze Conditioning

Additional Products

C

M

Y

CM

MY

• • • • • •

Absorbents Fuel Treatment Additives Pile Sealants Road Dust Suppressants Belt Deicers Full Body-feed Freeze Conditioning • In-house dust suppression

CY

Comprehensive Service

CMY

K

• • • • • •

Needs Assessment Cost Analysis Specialty Chemicals Application Systems Parts Inventory Design, Build, Install, Maintain • 24/7 Service

David Ryan is a Vice President at Associated Terminals and on the Executive Board of Directors of the Mississippi Valley Trade and Transport Council and longtime member of the NCTA. dryan@associatedterminals.com linkedin.com/in/drdavidryan

CROWN PRODUCTS & SERVICES, INC. Corporate Office: 319 S. Gillette Ave., Suite 303 Gillette, WY 82716

(307) 696-8175

w

w

w

.

c

r

o

w

n

p

s

.

u

s

COAL TRANSPORTER | 23

5:39

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.

Eastern and Western Logistics & Planning The Western Logistics & Planning Committees met February 9th, 2017, at Peabody Energy’s offices in downtown St. Louis.

TrinityRail sponsored the breakfast and Peabody provided a buffet lunch for attendees.

Mike Siebers, Senior VP, Sales & Marketing for Peabody welcomed the group of over 40 attendees to St. Louis. Lexie Burgess, Peabody’s Supervisor of Transportation, in Gillette gave a safety briefing on the importance of CPR training based on a real life incident at NARM. Jason Plett of BNSF Railway and Jay Jensen of the Union Pacific provided updates on their respective rail operations. Two representatives from American Commercial Barge Line, George Piccioni and Kim Lucido, reported on the new normal following the integration of AEP River Operations assets and personnel.

The back half of the meeting focused on operational issues. Daniel Carre, a Director in the Environment and Energy Division at GHD, gave a very educational presentation on the profiling of coal as it loaded into railcars at the mine.

Measurements are taken in every train that passes through three different locations. If you need access to the data from the Coal Car Load Profiling System (CCLPS) for your trains, contact your BNSF representative. At this time, the data is not readily available to UP customers.

The meeting concluded with a presentation and discussion session on the NCTA Forecasting Process. The process has been working well for all parties but the increasing volatility in demand for coal has impacted ratability. Scott Yaeger,

Vice President Transportation for Peabody Energy and Jeff Zerkle, Manager Logistics for AEP have been spearheading this effort to get information in a more timely fashion to aid in planning, assure supply availability, and keep costs down. Both the BNSF and the Union Pacific have been involved in this process and better information will help them as well in managing crews and equipment. The BNSF is current updating their forecasting tool but has not been completely forthcoming on what changes they are making. Stay tuned for more on this effort.

If you have agenda ideas or audience response questions for future meetings please contact: Eastern Logistics and Planning: Chairman Edwin Fisher (Arch Coal) or Western Logistics and Planning: Chairman Jeff Zerkle (American Electric Power). s

Gayle TenBrink, Scott Yaeger, Mary Novosel

Waterborne Transportation Committee The Inaugural Waterborne Committee Meeting was held last April in New Orleans in conjunction with the NCTA Spring Conference. The Chairman of this working committee is Terry May of Associated Terminals and the Vice Chairman is Finn Host of T. Parker Host. Finn will be one of the featured speakers at the Spring Conference in Tucson.

24 | COAL TRANSPORTER

For an update on waterborne issues, see David Ryan’s excellent article on page 22 of this issue.

The committee does not have a date for the next meeting, but watch for Water Bulletins and meeting information in 2017.

To be included in all Waterborne Transportation Committee correspondence, please contact Melinda Canter at 720-227-1049 or nationalcoaltransportation@gmail.com s

Operations and Maintenance

Jeremy Bowers

Education Committee The Education Committee administers the NCTA scholarship program with Jared Wicklund of The Empire District Electric Company serving as Chairman.

Sharon Robinson of Blackhawk Mining is the new Vice-Chairman.

In September of 2016, four scholarships were awarded to students who are children of employees of NCTA member companies. Check out their bios in this issue. The university scholarships were suspended in 2016 for budgetary reasons and have also been suspended for 2017.

University of Wyoming, the University of Arizona, the South Dakota School of Mines and Technology and the University of West Virginia were the institutions participating. s

Harry Mullins (Southern Company) continues to lead as Chairman of the O&M Executive Committee. Kevin Johnson (NPPD) has assumed the role as Program Chairman for the 2017 Operations and Maintenance Conference, which will be held at the Eldorado Resort & Spa in downtown Santa Fe, New Mexico.

Cathy LeFevers (Duke) is serving as the Chairman of the Site Selection Committee. Her committee is working on a identifying a great location in the east for 2018. Jeremy Bowers (OPPD) is the newest member of the Executive Committee replacing Troy Smith of Consumers Energy. We do have one opening on the Executive Committee for a utility representative so if you’re interested in serving, please contact Robin Andersen at randersen@mrc-rail.com. Robin is chairing the Nominating Committee.

In addition to the annual conference, the O&M group offers members

great educational value through its series of webinars. In late February, Mike Lesniak, the Director of Asset Health for the Association of American Railroads (AAR), presented a webinar titled “Asset Health Strategic Initiative”. AHSI is a rail industry effort to tackle challenges related to rolling stock. If you would like to make a webinar presentation or have an idea for one, please contact Gayle TenBrink (TrinityRail) who chairs this educational outreach program. Gayle also serves as the Vice-Chairman and Secretary of the Executive Committee.

Tom Sedarski (Amsted Rail Faiveley) is heading the technical review group within the O&M Committee. The final deadline for submitting wheel removal data has passed and the data is currently being analyzed. If you have an issue that you just can’t get a handle (or a wrench) on, get in touch with the tech review committee for some expert help. s

Superior reliability.

Flexible leasing.

Dedicated support.

Just a few of the reasons why you get more with a railcar and lease from Mitsui Rail Capital.

More than railcar leasing.

More than a young fleet.

More than fleet management.

More than expected.

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

Chris Gerber VP of Sales & Marketing 312-803-8851 www.mrc-rail.com info@mrc-rail.com

COAL TRANSPORTER | 25

2017 Operations and Maintenance Conference / Preview

2017 Operations and Maintenance Conference Santa Fe, New Mexico | June 12-14, 2017

T

hey are both capitals of their respective states and separated by a mere 700 miles, but Austin, the site of the 2016 conference and Santa Fe, the site of this year’s event could not be more different. There are no gleaming skyscrapers in Santa Fe and no river running through the center of town. Instead there is Pueblo-Spanish and Territorial architecture with contoured adobe walls, flat roofs, vigas or beams and nichos, the small arches carved into the walls for displaying objects.

Here, the center of town is the Santa Fe Plaza, a National Historic Landmark, that combines local Spanish, Native American, and Mexican cultures, and that is filled at various times with music, jewelry, art, dance, and of course, souvenirs.

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 26 | COAL TRANSPORTER

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.

Getting to Santa Fe can be a fun adventure in itself. One can fly into Albuquerque and take the Rail Runner Express train to Santa Fe for only $10.

The shuttle from the airport to the train station is free if you buy your train ticket in advance. Once at the Santa Fe Depot, the Eldorado Hotel is only an 8 minute walk.

REGISTRATION

Registration is required for each attendee at the O&M conference. The conference fee is $600 for members and $800 for non-members. After May 22nd, an additional fee of $100 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, 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

The Eldorado Hotel & Spa offers you 219 beautifully appointed guest rooms and suites with views of downtown Santa Fe or surrounding mountains and sunsets. It is just two blocks from the historic Santa Fe Plaza where there are 100+ shops, galleries and museums. The hotel features the award winning Old House Restaurant, the sophisticated AGAVE Lounge and the enticing new CAVA Santa Fe Lounge.

Taxes are additional; however, there is no resort fee. Wireless internet access is included. The cutoff date for the NCTA room block is Monday May 22nd, 2017. Check-in time is 4:00 pm and check-out time is 12:00 noon. Parking is $18/day. The Eldorado Hotel & Spa is located at 309 W San Francisco St., Santa Fe, NM 87501. s

RESERVATIONS: 505-988-4455 or 1-800-955-4455

AGENDA

ROOM RATES PER DAY: $175.00 Single/Double includes internet access.

MONDAY, JUNE 12 9:00 am – 12:00 pm 12:00 pm – 1:30 pm 1:30 pm – 3:30 pm 5:30 pm – 6:30 pm

Private Car Owners Roundtable – Voting Members Lunch by Individual Arrangement Private Car Owners Roundtable – All Members Welcoming Reception – Presidential Suite Patio

TUESDAY, JUNE 13 7:30 pm – 8:00 am 8:00 am – 12:00 pm 12:00 pm – 1:30 pm 1:30 pm – 5:00 pm 6:30 pm – 9:30 pm

Continental Breakfast – Anasazi Ballroom General Conference – Anasazi Ballroom Lunch by Individual Arrangement General Conference – Anasazi Ballroom Dinner and Entertainment – Eldorado Ballroom B

WEDNESDAY, JUNE 14 7:30 am – 8:00 am Continental Breakfast – Anasazi Ballroom 8:00 am – 11:30 pm General Conference – Anasazi Ballroom 12:30 pm – 6:00 pm Golf Tournament – Towa Golf Club COAL TRANSPORTER | 27

WHO’S WHO in the New Trump Cabinet Rick Perry Department of Energy Born March 4th, 1950 in Paint Creek, Texas, James Richard “Rick” Perry served as the 47th Governor of Texas from December 2000 to January 2015, making him the longest-serving governor in Texas history. During his time in office, Texas saw a huge growth in population and economic expansion and it led the nation in job creation.

In the mid-70s, Perry served in the U.S. Air Force flying C-130 tactical airlift aircraft in Europe and the Middle East. Back home, he served as Texas Commissioner of Agriculture and was a member of the Texas House of Representatives before being elected Lieutenant Governor in 1998. He assumed the Governorship when George W. Bush was elected President.

What a better way to “drain a swamp” than to put someone in charge that at one time advocated eliminating the entire DOE as Perry did during his first bid for the White House.

He does know something about energy though as major growth in gas and renewables during his tenure has made Texas the No. 1 U.S. producer of both natural gas and wind energy.

While he supported coal through a clean-coal technology council and tax incentives for clean-coal plants and even tried to fast track some coal plants, the competitive forces were too big to overcome. He also pushed back against the federal overreach of the EPA. Transmission issues were also front and center as generation from windy West Texas needed to find its way to the large cities.

Perry graduated from Texas A&M University in 1972. He and his wife Anita Thigpen Perry, married since 1982, have two children, Griffin and Sydney. While he was never on the TV show The Apprentice, he did appear on Dancing with the Stars in 2016.

Ryan Zinke Department of the Interior Born on November 1st, 1961 in Bozeman, Montana, Ryan Zinke is a fifth generation Montanan. Prior to his appointment he was Montana’s only Representative to the US House.

Previously Zinke served as a state senator and is a 23-year veteran of the Navy SEAL program. On March 1st, Congressman Zinke was confirmed by the senate as the 52nd Secretary of the Department of the Interior. Zinke will oversee all 254 million acres of federal lands including all the resources on and beneath them.

In his confirmation hearing, Zinke stated, “I am absolutely against transfer or sale of public land,” but that doesn’t mean he won’t support drilling and mining. The prior administration used Interior to advance its renewable agenda by blocking drilling and putting a moratorium on new coal leases. As a Montana state senator where the federal government manages 37 percent of the land, he supported fossil fuel exploration with the support of ranchers, extraction industries and local tribes.

Zinke attended the University of Oregon on a football scholarship and graduated with a B.S. in Geology. He also holds a Master’s degree in Business Finance from National University and a Masters in Global Leadership from the University of San Diego. Ryan and his wife Lolita (Hand), have two sons, Wolfgang and Konrad, and a daughter Jennifer. Given that politics is akin to guerrilla warfare these days, Zinke’s experience as a leader on SEAL Team Six could just come in handy.

28 | COAL TRANSPORTER

Elaine Chao Department of Transportation Born on March 26th, 1953 in Taipei, Taiwan, Elaine Chao has been confirmed as the 18th US Secretary of Transportation. Chao’s family immigrated to the United States in 1961.

She spoke no English at the time.

Secretary Chao’s career spans the public, private and non-profit sectors. She previously served as the Secretary of Labor for the entirety of the second Bush Administration. She was the first American woman of Asian descent to be appointed to a President’s Cabinet. Her experience in transportation came as Deputy Secretary of Transportation under President George H.W. Bush. She has also served as Chairman of the Federal Maritime Commission, Deputy Maritime Administrator, and as a White House Fellow.

On the non-profit side, Chao served as Director of the Peace Corps where she established programs in the Baltic and the now independent Soviet states and as President and CEO of the United Way. Prior to her government service, she was VP of Syndications at BankAmerica Capital Markets Group and a banker with Citicorp in New York.

President Trump has made investing in infrastructure and rolling back burdensome regulations an important component of his plan to jumpstart the economy. The DOT will play a key role in making those investments.

In 1975, Chao earned an economics degree from Mount Holyoke College and a MBA from the Harvard Business School. She has been married to United States Senate Majority Leader, Mitch McConnell of Kentucky since 1993. One would think that heading both the departments of Transportation and Labor, and being married to a Senate majority leader would set her up for being a Final Jeopardy answer someday. But she is actually the second person that can make this claim. Can you name the other?

Scott Pruitt Environmental Protection Agency Edward Scott Pruitt was born May 9th, 1968 in Danville, Kentucky, and grew up in Lexington. He was confirmed by the U.S. Senate as the 14th Administrator of the Environmental Protection Agency on February 17th, 2017. Scott Pruitt was one of the more controversial Trump picks because of his history of suing the EPA during his tenure as the Attorney General of Oklahoma, a position he was elected to in 2010. Before being elected attorney general, he served eight years in the Oklahoma State Senate. From 1993 to 1998, Pruitt was in private legal practice specializing in constitutional and employment law.

If any agency in Washington was allowed to run amok during the Obama Administration it was the EPA. Pruitt, representing Oklahoma, sued the EPA more than a dozen times during his six years as attorney general, challenging both the EPA’s authority and the rules themselves as proposed to regulate mercury, smog, carbon emissions, and water.

Pruitt will likely seek to roll back regulations and turn some of the rulemaking making back to the states. In his confirmation hearing he stated “It is our state regulators who oftentimes best understand the local needs and the uniqueness of our environmental challenges.”

An outstanding second basemen, Pruitt earned a baseball scholarship. He graduated from Georgetown College in Kentucky in 1990 with bachelor’s degrees in political science and communications. He earned his Juris Doctor in 1993 from the University of Tulsa.

Pruitt married Marlyn Lloyd in 1992. They have a daughter, McKenna, and a son, Cade. From 2003-2010, Pruitt was a co-owner and Managing General Partner of the Oklahoma City Redhawks, a Triple-A baseball team, now known as the Oklahoma City Dodgers.

COAL TRANSPORTER | 29

Technology / ITC Wyoming

WYOMING TAKES THE REINS ON

ENERGY INNOVATION

30 | COAL TRANSPORTER

A

Public-Private Partnership to Advance Clean Carbon Technology Powers Forward

s global energy consumption soars to record highs, we are faced with a dilemma: how to meet our ever-increasing energy needs while addressing concerns over emissions. A major step toward a solution is currently under construction in Wyoming, the heart of America’s coal industry.

Coal is the bedrock of America’s power supply. In 2015, one third of electricity in the United States was generated from coal. Of the one billion tons of coal used per year in the U.S., roughly 40 percent is mined from the Powder River Basin in Wyoming. Because the Powder River Basin is the largest source of coal in the U.S. and home to one of the largest coal deposits in the world, Wyoming has been the leading coal-producing state since 1986. Coal sourced from the area is classified as sub-bituminous and is the preferred choice for use in power plants because of its relatively low sulfur and ash content. This makes Wyoming the perfect location to research future coal based energy solutions. And that’s exactly what’s underway at the Wyoming Integrated Test Center (ITC).

Wyoming Integrated Test Center

The Wyoming ITC is a next generation testing facility being built just outside Gillette, Wyoming at Dry Fork Station, which is jointly owned by Basin Electric Power Cooperative and the Wyoming Municipal Power Agency. It will provide researchers with pilot-scale demonstration sites to develop new ways of removing and utilizing carbon emissions from coal-fired power plants. The center will feature six test bays; five small bays providing up to 0.4 MW of flue gas, and one large bay which can provide up to 18 MW of flue gas. Each site will be provided with scrubbed flue gas directed from the Dry Fork Station. Researchers will also have access to electricity, water and waste disposal based on their specific project needs.

Upon its targeted completion in late Summer 2017, the ITC will be one of just a handful of facilities around the world, and only the second in the United States, capable of demonstrating the real world use of clean energy technologies at scale. Currently, most carbon capture technologies are developed in laboratories where researchers have to rely on simulated flue gas and are forced to transport technology between the lab and field to conduct tests. By putting researchers on-site, with access to coal fired power flue gas, the ITC will provide a nearly unmatched opportunity to advance and scale Carbon Capture Utilization and Sequestration (CCUS) technologies under real world conditions.

Carbon capture technology has the potential to revolutionize how we use fossil fuels. By transforming carbon dioxide emissions into valuable, revenue-producing products, CCUS stands to improve the economics of carbon removal. And when it comes to what carbon can be used for, the sky is the limit. Researchers have been looking at ways to repurpose carbon dioxide emissions into products like carbon negative bio-fuels, cooking oils, fish food, plastics, and enhanced concrete. Graphene is another potential repurposed product. This newly discovered, atomic-scale nano-material that has many remarkable traits including being 200 times stronger than the strongest steel.

A breakthrough in CCUS could be game changing for coal production, not only helping to boost production while addressing emissions concerns, but also in turning what was once deemed a waste product into a valuable commodity.

Public – Private Partnership

Such a groundbreaking project was made possible through the hard work and joint efforts of the State of Wyoming, Basin Electric Power Cooperative, Tri-State Generation & Transmission Association, National Rural Electric Cooperative Association and the NRG COSIA Carbon XPRIZE. The ITC has proven to be a model example of publicprivate cooperation. Everyone involved has come together with the goal of ushering in a new age of low-carbon energy at the Wyoming ITC. In 2014, with the support and encouragement of Governor Mead, the Wyoming State Legislature allocated $15 million in funding for the design, construction and operation of the ITC. An additional $5 million private commitment was secured from Tri-State Generation and Transmission Association. National Rural Electric Cooperative COAL TRANSPORTER | 31

Basin Electric Power Cooperative CEO Paul Sukut makes remarks at the April 2016 Groundbreaking Ceremony of the Wyoming ITC.

Wyoming Governor Matt Mead makes remarks at the April 2016 Groundbreaking Ceremony of the Wyoming ITC.

Association pledged an additional $1 million to the project. In addition to the host site, Basin Electric Power Cooperative is providing additional in-kind contributions including engineering and construction management services.

Governor Matt Mead and the Wyoming Legislature have made it a goal to expand Wyoming’s vast energy resources to new markets.

“We are making an investment in the future of coal. The research at the ITC will lead to new opportunities in petrochemicals and other commercial uses for carbon dioxide,” said Governor Mead. “We lead the nation in coal production. This facility allows us to provide the same leadership in research and to do all we can to make sure the coal industry can continue to serve Wyoming and the country for many years to come.”

Basin Electric, one of the largest electric generation and transmission cooperatives in the nation, has proven to be an invaluable partner in the development of the ITC. Beyond providing the ideal location at their state of the art Dry Fork Station, Basin Electric has also supplied their engineering and construction management expertise to the project. Founded in 1961, Basin Electric provides electricity to 2.8 million customers across nine states.

“We’re excited to be part of this project,” said Basin Electric CEO Paul Sukut. “When we built Dry Fork Station, we built it with the hope and intention of one day having the opportunity to test and potentially help advance coal technologies. That day has arrived, and the foresight our members and staff had in building a coal facility that could be used in this capacity further exemplifies their dedication to innovation and the continued use of coal, a vital part of our nation’s energy infrastructure, well into the future.”

The National Rural Electric Cooperative Association (NRECA) is a national service organization that represents more than 900 private, not-for-profit, consumer-owned electric

cooperatives. Founded in 1942, NRECA unites generation, transmission and distribution cooperatives that serve 42 million people across 47 states.

“The Integrated Test Center is a shining example of how America’s electric cooperatives are pushing the boundaries of innovation,” said Jim Spiers, NRECA’s Vice President of Business and Technology Strategies. “From distributed generation and renewable energy to cyber security and carbon capture, co-ops are collaborating with public and private interests to meet the needs of their member-consumers and increase economic prosperity in their communities.”

Tri-State Generation and Transmission Association became involved in the project early on after recognizing the need to improve the capacity to handle carbon emissions. Ellen Connor, Chief Technology Officer and Senior Vice President of Organizational Services at Tri-State, shared insights into the history of the project as well as Tri-State’s current involvement.

“Six years ago Tri-State began working on the idea that the country needed to explore new paths to manage the carbon, but we knew we couldn’t solve this problem alone,” Connor said. “Tri-State was proud to commit funds to ensure the ITC project could move forward. We are very grateful to Basin Electric Power Cooperative for making Dry Fork Station available for this project, and for our national trade association, the National Rural Electric Cooperative Association, for also supporting the ITC.”

32 | COAL TRANSPORTER

Tenants

XPRIZE, the world’s leader in designing and managing incentive competitions to solve humanity’s biggest challenges, will be the first tenant of the Wyoming ITC. The NRG COSIA Carbon XPRIZE is a global competition to develop breakthrough technologies that convert the most carbon dioxide emissions from power plant facilities into products with the highest net

Representatives from the Wyoming ITC’s public and private partners pictured at a Groundbreaking event for the project in April 2016. Pictured from left to right are Rick Gordon, Tri-State Generation and Transmission Association, Board Member; Paul Bunje, NRG COSIA Carbon XPRIZE, Principal and Senior Scientist, Energy & Environment; Paul Sukut, Basin Electric Cooperative Association, CEO and General Manager; Wyoming Governor Matt Mead; Mike Easley, Wyoming Infrastructure Authority, Board Member; Shawn Taylor, Executive Director of the Wyoming Rural Electric Association, Representing the National Rural Electric Cooperative Association; Jason Begger, Wyoming Infrastructure Authority, Executive Director. value. There are currently 27 teams representing six countries competing as semi-finalists for the $20 million competition.

Launched in September 2015, the NRG COSIA Carbon XPRIZE addresses global CO2 emissions by incentivizing groundbreaking solutions to convert CO2 from a liability into an asset. The four-and-a-half-year competition includes semifinalist teams from Canada, China, India, Switzerland, Scotland and the United States. Teams come from a number of different backgrounds including carbon capture technology companies, top-tier academic institutions, non-profits and new startups.

www.westernfuels.org

COAL TRANSPORTER | 33

“XPRIZE is excited to collaborate with ITC in this first-of-its-kind opportunity to bring low-carbon energy innovation to electric power, one of the most important technology challenges facing the world today,” said Paul Bunje, Senior Director and principal scientist of XPRIZE’s Energy & Environment team.

“ITC gives global innovators competing in the NRG COSIA Carbon XPRIZE a world-class space to test potentially revolutionary technologies that could change how we tackle carbon emissions and develop energy technology long into the future.”

The Wyoming ITC will be available for researchers to test their technologies.

The Wyoming ITC’s website contains the Request for Proposal (RFP), which provides technical information about the facility, and the latest information on when new proposals will be accepted. Accepted projects will be provided the opportunity to “lease,” at no cost, a test bay with flue gas slipstream from a coal-fired power plant. Individuals and groups in private industry, government agencies, government laboratories, university faculty and staff may submit proposals.

In January of 2017, representatives from the Japan Coal Energy Center (JCOAL) toured the Wyoming ITC and viewed the isolation damper as well as the site of the ITC’s largest test bay, where construction is currently ongoing.

TH_CoalTransporter_022011:Layout 1 2/17/2011 2:40 PM Page 1

We keep you moving.

No longer highly regulated, the transportation industry is a dynamic, innovative service sector presenting challenges and opportunities for shippers that shift and change frequently. Thompson Hine can help you navigate all of the commercial and regulatory complexities that impact shippers across the country.

Clients and peers rate our Transportation practice group among the very best in the United States, so you know you can depend on us to help keep your business on the move.

Thompson Hine LLP | Attorneys at Law | www.ThompsonHine.com Atlanta | Cincinnati | Cleveland | Columbus | Dayton | New York | Washington, D.C.

34 | COAL TRANSPORTER

Attorney Advertising

“We’re looking for the world’s best and brightest ideas to utilize this cutting edge facility and work on real-world solutions to address carbon emissions,” said Jason Begger, Executive Director of the Wyoming Infrastructure Authority. “The technologies created and perfected at the Wyoming ITC have the potential to change how energy is produced around the world. Collaborating with the ITC to share ideas, accelerate research and facilitate game-changing energy technology will benefit the advancement of clean energy.”

The ITC will be available for testing in Fall 2017. For more information on the Wyoming ITC, visit www.wyomingitc.org. s

Flue gas will be delivered to the ITC via a carbon steel duct, pictured right. A guillotine damper installed into the duct gives researchers the ability to open and close the duct when they need flue gas. The damper will pull the flue gas after removal of S2O and NO2, opening it and closing it as needed for testing.

Unsurpassed Quality | Competitively Priced | Prompt Order Turnaround

Your source

for parts WestRail has capabilities to cross reference coal car running marks to our parts catalog

• Complete line of aluminum replacement parts for 25 coal car models representing over 85% of the North American coal car fleet • Large inventory of ready to ship materials in-stock at our McPherson, KS warehouse • Servicing repair shops throughout the United States, Canada and Mexico • Helpful and responsive customer service

For more information contact: Mark DeBoer at 800-821-2376 WestRail Division, Aero Transportation Products, Inc. 924 W. 1st Street, McPherson, KS 67460

800-821-2376 westrail.aerotransportation.com COAL TRANSPORTER | 35

Surface Transportation Board / Update

Covering Up Coal Dust?

O

By Robert D. Rosenberg and Katherine F. Waring, Attorneys, Slover & Loftus LLP

36 | COAL TRANSPORTER

ver a decade ago, western railroads and their shippers experienced severe disruptions linked to coal dust from trains carrying Powder River Basin coal. The dust fouled and clogged track ballast, leading in turn to derailments, substantial track remediation, major service deficits, curtailments at coal-fired power plants, and higher costs. The railroads later required shippers to treat coal during loading to suppress dust or face a surcharge. While the controversy between railroads and shippers over coal dust has been largely quiescent, environmentalists have pursued coal dust’s role as a potential pollutant.

Coal dust resurfaced in litigation that the Sierra Club and other environmentalist groups brought against BNSF Railway in federal district court in Washington state in 2013 (2:13-cv-00967JCC). The environmentalists documented the presence of coal in the state’s waterways. They charged that BNSF’s unpermitted discharge of coal into the waterways constituted a violation of the Clean Water Act, for which they sought $4.6 trillion in damages.

The court denied motions for summary judgment, finding that the environmentalists had established standing for all Washington waterways at issue as all injuries could be attributed to BNSF as it is the only railroad that transports coal in the vicinity of the waterways. The case went to trial, but the parties reached a tentative settlement on the sixth day. As

of the date this article went to press, no final settlement has been submitted, but three key elements have been announced: • BNSF will pay $1 million towards conservation or restoration efforts in Washington; • BNSF will remove coal from and otherwise remediate certain areas near certain waterways; and • BNSF will fund a two-year study on the use of covers for coal railcars.

The third element, the two-year study on use of covers for coal trains, is the most significant for coal interests. The study will analyze the costs and benefits of using covers. The anticipated costs include the capital costs of acquiring the covers, the operating costs associated with placing, removing, and maintaining the covers and associated disruption to the loading and unloading processes, impact on the amount of coal that railcars can carry, and the risks that the covers may fly off or otherwise malfunction in practice. The potential benefits include not only the reduced impact on the environment from reducing dust emissions, but also the associated value of losing less coal in transit.

Another potential benefit is improved train fuel efficiency due to improving the aerodynamics of the coal cars.

The potential use of covers for coal cars is not recent, and analysis of the potential aerodynamic benefits goes back to at least the early 2000s. Railroads have

long used covered railcars to transport other commodities. For example, covered hoppers are typically used to transport products such as lime, flour, cement, mineral powder, clay, and cement, largely to guard against water contamination.

The study carries the risk that use of the covers could become mandatory, particularly if the ostensible environmental and other benefits exceed the costs. While the litigation was brought only against BNSF and only in the State of Washington, the claims are of a sort that could be replicated against other carriers and in other states.

In denying summary judgement, the court deferred addressing BNSF’s contention that the Clean Water Act claim was preempted. Under 49 U.S.C. § 10501(b), the jurisdiction of the Surface Transportation Board over transportation by rail carriers is “exclusive.” Furthermore, the remedies provided under the Surface Transportation Board’s governing statute “are excusive and preempt the remedies provided under Federal or State law.”

In practice, preemption often involves a balancing of considerations, especially where other federal law is involved. While an informed discussion of such preemption is outside the scope of this article, the preemption issue is a very significant one that has thwarted the application of other obligations that burden rail transportation in numerous instances.

The potential use of covers for coal cars is apt to remain yet another issue on the horizon for railroads and coal shippers. s

Surface Transportation

Board Update

These are the significant issues and events that have transpired at the STB since the publication of the Issue 2 2016 of the Coal Transporter. See the STB website for further details.

January 27th, 2017 – STB delays effectiveness of new railroad service performance reporting requirements in EP 724 (SubNo. 4) until March 21st, 2017, with first reports under the new rules to be filed March 29th, 2017.

January 25th, 2017 – President Trump appoints Ann Begeman (Republican) as Acting STB Chairman, replacing Dan Elliott (Democrat), who remains a Board Member.

December 14th, 2016 – STB adopts final rules for STB-initiated investigations in compliance with the STB Reauthorization Act of 2015 in EP 731.

December 9th, 2016 – Ann Begeman confirmed by the Senate for a second term as a Member of the STB, after being renominated

by President Obama on December 7th, 2016.

December 7th, 2016 – U.S. Government Accountability Office issues report required

by STB Reauthorization Act of 2015 on rail contracts and freight rail pricing.

November 30th, 2016 – STB adopts final rules for new railroad service performance requirements in EP 724 (Sub-No. 4), to take effect on January 29th, 2017.

October 25th, 2016 – STB holds economic roundtable on the InterVISTAS report in EP 736.

September 30th, 2016 – STB releases final arbitration rules in compliance with STB Reauthorization Act of 2015 in EP 730.

September 22nd, 2016 – STB releases InterVISTAS report on alternative rate case methodologies.

August 31st, 2016 – STB releases advanced notice of proposed rulemaking on streamlined rate reasonableness procedure for shippers of all commodities in small rate disputes in EP 665 (Sub-No. 2).

August 11th, 2016 – STB Members testify on STB Reauthorization Act of 2015 at hearing of the Senate Commerce, Science, and Transportation Committee hearing in Sioux Falls, South Dakota.

July 27th, 2016 – STB proposes new rules for reciprocal switching in EP 711 (SubNo. 1), and provides for ex parte meetings with individual Board Members following the submission of public comments.

COAL TRANSPORTER | 37

NCTA Scholarship Recipients

2016 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.

Rachel Kamm Kansas State University | Industrial Engineering

Recipient of the 2016 David Laffere Scholarship Award

Rachel Kamm is a junior at Kansas State University. Rachel will graduate in May 2018 with a Bachelor’s of Science degree in Industrial Engineering and a minor in Statistics. Rachel has always been passionate about helping others and plans to use her degree to work in the healthcare system. This summer she will be interning with Blue Cross and Blue Shield of Topeka and working as an internal consultant.

Rachel has been very involved on campus at Kansas State University. She has been a mentor in the Women in Engineering program for the past two years, currently serves on the Engineering Student Council, and is an active member in Christian Challenge. While attending Kansas State University, Rachel has been employed part time, working 20-30 hours a week. She is currently working as the office assistant of Goodnow Residence Hall. She also does research with Dr. Wu for the Department of Transportation.

Rachel has been successful because she was raised to have an admirable work ethic, a positive mindset, a heart for others, and has developed a strong faith. These qualities are what make her stand out as a student, employee, and a Christian.

Rachel is the daughter of Richard and Mary Kamm (Kansas City Power & Light)

Aubrianna Ansell West Virginia University | Criminal Justice/Psychology Aubrianna was born in Bogota, Colombia and currently resides in Parkersburg, West Virginia with her family. She is the first of twelve children and has always strived to be an outstanding and loving role model for each of her younger siblings and those around her.

Aubrianna is currently attending West Virginia State University and majoring in Criminal Justice and Psychology. Upon receiving her bachelor’s degree, she intends on pursuing her masters and doctorate degrees in both disciplines. Having always had a desire to work in a field that permitted her to help others, her ultimate career goal is to work with the Federal Bureau of Investigation.

Aubrianna is very involved with her church. She signed for a deaf population in her congregation for several years and is currently a group leader for her church’s Bible school.

She also helps organize and play in the “Praise Band” ministry in her church. Aubrianna is an accomplished pianist and has competed in state, national, and international piano competitions. She placed first in state and nationals and second in international competitions.

Being involved with her community is also very important to her. She has helped with the organization and fundraising for the “Light the Night” walk for those with leukemia. For the past three years she’s served as an organizer and team player for the annual fundraising 5K run for a local homeless shelter in Pennsylvania. She also volunteers and participates for a week each year with Franklin Graham’s “Samaritan’s Purse” project held in North Carolina.

Aubrianna is the daughter of Tim and Carla Ansell (Dynegy) 38 | COAL TRANSPORTER

Grant Lindblom University of Wyoming | Electrical Engineering Grant Lindblom was born and raised in Gillette Wyoming. His father’s background in civil engineering and coal mining provided him with a very close connection to the coal industry. He is currently a senior in the Electrical Engineering program at the University of Wyoming.

During his summer breaks from college, Grant has held two internships in Gillette.

He worked as a field engineer for Morrison-Mairele, Inc. where he spent the summer at a rural airport overseeing a runway and electrical rehabilitation project. This past summer, he worked as an electrical engineering intern for Cloud Peak Energy at their Cordero Rojo mine. Grant worked on several projects including a dragline rebuild, shovel motivator, and a new main substation plan. This is where he discovered that his passion lies in power engineering.

Currently at the University of Wyoming, he is working on the UW Microgravity project for NASA as his senior design project. The goal of the project is to replace the current earth based microgravity testing platforms with one that is more affordable. Grant likes to keep busy and always have something to do, but when he has free time he likes to hike, snowshoe, and fish around Laramie, Wyoming.

Grant is the son of Owen and Reba Lindblom (Cloud Peak Energy)

McKenna McCreary Black Hills State University | Math and History Education Scholarship recipient, McKenna McCreary is a senior enrolled at Black Hills State University located in Spearfish, South Dakota. She is majoring in Math Education with a minor in History. McKenna played high school volleyball in Gillette, Wyoming where she graduated as a Salutatorian. Facing a big decision between engineering and math education, McKenna found her heart was truly in the classroom.

McKenna is a “coal miner’s daughter” and worked for a summer at a large surface coal mine where she enhanced her appreciation for coal in the energy industry. With this background she plans to share the need for coal in her future classrooms.

McKenna worked at a local tourist site called the Vore Buffalo Jump giving tours on the unique history of the location. She also tutored students who were struggling with math at the Math Assistance Center on campus. She is currently in her final semester student teaching Algebra, Algebra II, and Pre-Calculus in a high school classroom.

As a lover of the outdoors, McKenna’s free time is spent skiing, biking, hiking, and camping. McKenna loves lifting weights and running outdoors, weather permitting. After graduation, she plans to live in Wyoming.

McKenna is the daughter of Tim and Lori McCreary (Arch Coal)

COAL TRANSPORTER | 39

NCTA / Member Sound-Off

Member Sound-Off The Coal Transporter asked members and associates to offer their opinions on a current topic in the transportation industry.

The Outcome Few Saw Coming...

Donald Trump’s victory on November 8th to become the 45th President of the United States of America was something very few predicted. While his opponent campaigned on the installation of half a billion solar panels nationwide by the end of her first term in office and happily putting miners out of work, Trump promised just the opposite. What this means for the coal industry remains to be seen.

One thing this election result will buy the industry is some time. Time to balance economics with ideology. Time for fuel markets to do something different than what everyone thinks they will do. Time to get some more use out of coal plants that are still in great operating condition. Time for cooler heads to prevail.

This issue’s survey touched on two important federal agencies that impact the coal industry and where our members and associates think they might be heading over the next few years.

Surface Transportation Board

The Surface Transportation Board Reauthorization Act of 2015 established the STB as a wholly independent federal agency.

Previously, the STB had been administratively aligned with the U.S. Department of Transportation.

While it is a regulatory agency, much of the STB’s work counterbalances the lack of competition that exists in certain areas of the country. President Trump will be appointing at least two new commissioners to the STB per the 2015 Act to bring the total number to five.

Do you see a shift coming in the direction of the Board?

Possible Shift in STB Direction 60%

Same balance as now

40%

20%

Environmental Protection Agency

The Environmental Protection Agency was the most aggressive arm of government when it came to the war on coal. It was clearly less concerned about protecting the environment than it was about picking winners and losers in the energy industry.

Early indications are that the new President will better balance environmental regulation and its impact on the economy. Just drive through Detroit and see what a bad economy can do to the environment.

We asked respondents how they thought things might change in three areas: 1) The calculation of the social cost of carbon; 2) The EPA’s practice of creating new regulatory burdens and bypassing public input through the settlement of lawsuits brought by environmental groups; 3) The Clean Power Plan.

The Social Cost of Carbon

50%

30%

Almost half of the respondents thought that the STB would continue on its current path of balancing the needs of the carriers with those of shippers. About 30 percent thought a new administration determined to reduce the regulatory burdens on businesses would translate into a net benefit for carriers. About 20 percent thought that America is at its best when markets are free so that opening up the system to competition would be something that may be promoted.

Less regulation to the benefit of carriers

10% 0%

40 | COAL TRANSPORTER

Open the system to competition

The Trump Administration will be taking a hard look at the “social cost of carbon” (SCC) which has been used to justify many of the EPA’s most expensive regulations including the Mercury Rule and the Clean Power Plan. Its use is not just confined to the energy sector. In 2013, the Obama Administration recalculated the SCC to be $36 per metric ton of carbon, up from their previous 2010 calculation of about $22. Of course there are radicals that argue that the number should be as high as $900 per metric ton, thus justifying every regulation anyone could ever think up.

Respondents were asked if they expect to see the SCC to change in the next few years.

The Social Cost ofofCarbon The Social Cost Carbon

they disagree with anything? Why not shop for a friendly judge that sees things your way? About equal numbers that it would not change or just become irrelevant.

0% 7% 33%

Sue and Settle

52% 8%

It will go up It will go down It will stay the same It will be mired in litigation It will be irrelevant

Like many things surrounding the climate change movement, the social cost of carbon is derived from one of those assumption driven models that can basically give you any answer you want. Personally, I think “peer reviewed” is the new code for group think.

Over half the respondents believe that it will go down.

Clearly this administration is interested in real rather than computer generated dollars. Absolutely no one thought that the SCC will go up. A fair number, 33 percent thought that it will be mired in litigation. Isn’t that what people do these days when

Contact Us: Mike Kelley 720.566.2906 Director, Sales and Marketing 307.685.6130 Mary Lou Risley 720.566.2915 Leslie Thorn 720.566.2909 Bill Wallace Corporate Headquarters: 505 S. Gillette Ave. (82716) P.O. Box 3009 Gillette, WY 82717 307.687.6000 Colorado Office: 385 Interlocken Crescent Suite 400 Broomfield, CO 80021

The EPA has skirted the normal rule making process through the courts in what has become known as “Sue and Settle.” This happens when a federal agency agrees to settle lawsuits with special interest groups behind closed doors and those settlements result in new rules and priorities without any public input.

Often the agency will agree to pay for the other side’s attorney’s fees. Respondents were asked what they thought would likely happen with “Sue and Settle”, specifically at the EPA, over the next two years.

Where goes the EPA’s Nasty “Sue and Settle” Habit?

40% 35% 30% 25% 20%

There will be more suing but less settling Settlements will continue but will be less onerous

15% 10% 5% 0%

The number of settled suits will be about the same

Lawsuits will decline once plaintiffs attorneys are no longer taxpayer funded

Providing low-sulfur, high-quality subbituminous coal. We deliver on quality, with a vision for the future. www.cloudpeakenergy.com COAL TRANSPORTER | 41

Of all the things that the EPA has done to push its anticoal agenda, this is one of the most egregious. While there is nothing wrong with settling lawsuits per se, this practice was just a backdoor means to circumvent the public process. It also enriched environmental litigants at taxpayer expense. There is nothing like a series of friendly lawsuits that you have no chance of losing to make a good living. So what will happen to this practice in a revamped EPA? Thirty-nine percent of respondents thought there would be more suing but less settling. The nod, nod, wink, wink, negotiations of the past are just that – history.

Another 28 percent chose as their best guess that settlements will continue but that they will be less onerous in that few if any new regulations will be imposed in the process. A smaller group, 22 percent thought maybe that the number of lawsuits may decline now that plaintiffs are not guaranteed a win and may actually have to put some time and money at risk. Only 11 percent thought that the number of settlements would remain about the same. An “other” choice was also offered but respondents appeared good with the four options given.

Clean Power Plan

On February 9th, 2016 the Supreme Court ruled to halt enforcement of the EPA’s Clean Power Plan (CPP) until its legal challenges were resolved. The 24 states that brought the suit argued that the new policy is far more ambitious than two earlier EPA air-pollution initiatives that the Supreme Court ultimately ruled were legally flawed. With the CPP still in legal limbo and without the support of the new administration, respondents were asked what they believed was the plan’s near term future.

Fate of the Clean Power Plan

OTHER CHANGES

Respondents were given the opportunity to Sound Off on other changes they see coming with respect to the coal and transportation industries both positive and negative. Here is what some of them had to say: “I see the focus being on easing regulations on oil and gas first and coal as more of an afterthought. The strategy of the environmentalists will be more on litigating and also on regulations at the state level. Any new regulations at the federal level will have a steep hill to climb.

It is disturbing though that Al Gore and Leonardo DiCaprio have such early access to the White House. Ivanka Trump is clearly sympathetic to their message and that is troubling given her influence with her father.

Overall though, things should be better with Trump for the coal industry than they would have been with Clinton. We need to be very cautious with our exuberance though given his lack of predictability and tendency to overstate his position.”

Kathy Brown, Arch Coal

“I see an increase in coal burn tempered only by competition from natural gas. I expect an increase use of natural gas for generation of electricity from increased production not regulations on coal.”

Ted Barker, Maxeefish LLC

“I would hope that the overbearing government regulation of coal, in an attempt to favor wind and solar generation, would be eliminated; giving rise to a subsidy and regulation-free level playing field on which coal can again successfully compete.”

Paul Linton, NCTA

80% 70%

Partial compliance some states will comply anyway

60% 50% 40% 30% 20% 10%

The current lawsuits will get played out

For now, it’s in the garbage can

0%

This question found the highest level of agreement amongst respondents’ across all questions with 61 percent believing that there will be partial compliance with the CPP regardless of its legal status. Some states just can’t help themselves. Twenty-two percent believe that it is garbage for now and the remaining 17 percent think the current lawsuits must get played out before its fate will be determined. s

“Positive - A favorable economic plan from the administration that may reduce the value of the dollar to increase coal exports.

Negative - Special Interest groups using the court system as stall tactics to delay administration’s action plans.”

Sean Craig, Dairyland Power Cooperative

“Less focus on fracking will delay potential regulation of natural gas production. Coal will have to compete with NG and wind in about the same way it does today. Coal volumes will continue to decline as long as renewables are subsidized by taxpayer.”

Bill McNally, OG&E

“With the executive and legislative branches controlled by the Republicans, there should be a long term energy policy developed to include coal, gas, and renewables.”

Jerry Solt, WHEELWORX, LLC

“Federal coal leasing will resume. The railroads finally understand they have taken too big of a piece of the pie and gas is winning. They will have to lower prices to grow the pie.”

Bill Wallace, Cloud Peak Energy

42 | COAL TRANSPORTER

NCTA CALENDAR

OF EVENTS 2017

July 7th, 2017 Advertising and Editorial Deadline for Issue 2 2017 of the Coal Transporter Magazine Summer/Fall 2017 Presentation of NCTA Scholarship Awards: David L. Laffere Scholarship Three Member’s Children Scholarships

April 10th-12th, 2017 Spring Conference Loews Ventana Canyon, Tucson, Arizona

September 18th-20th, 2017 Forty-Third Annual Business Meeting and Conference Grand Hyatt, Denver, Colorado

June 12th-14th, 2017 Operations and Maintenance Conference Eldorado Hotel & Spa, Santa Fe, New Mexico

December 30th, 2017 Receipt at NCTA office of all re-certification forms for the UMLER Fee Waiver for Calendar Year 2018

NCTA WELCOMES ITS NEWEST MEMBERS!

BENEFITS OF MEMBERSHIP

T

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.

• • • • • • •

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

A complete list of NCTA member companies can be found on our website: http://www.nationalcoaltransportation.org/ index.php/membership/current-members COAL TRANSPORTER | 43

Reflections / Doug Glass

DOUG GLASS In My Words

44 | COAL TRANSPORTER

I

am intrigued how life has an unpredictable and random way of unfolding. And yet there are marked turning points that weave through the years like a fine thread connecting milestones that help define your character and set your direction.

I never imagined leaving my beautiful home state of Colorado in 1976, or that I would spend 40 years at Union Pacific Railroad in neighboring Omaha, Nebraska.

I was born in Denver, Colorado on February 25th, 1953, to Rex and Ruth Glass. My father hailed from Strawberry Point, IA, a small northeastern Iowa town known for its big red strawberry sign. My mother was born and raised in Denver, Colorado. The war brought my father to Fort Carson, Colorado, where he met Mom while convalescing from an appendectomy. My mom was visiting the patient who was sharing a room with my dad. Love works in strange ways!

Since my dad joined the Army late in the war, he never left the comfort of his base at Fort Carson. My brother and I often asked about his experiences during the war, but he said the only engagement he saw was fighting off the secretaries from behind his desk. My dad had a great sense of humor. After the war ended, Dad went to work for Standard Oil’s refinery in Casper, Wyoming with my mother in tow. They decided that Wyoming winters were a bit too harsh and moved to Denver where he started a career with Samsonite Luggage Company, which was headquartered there.

As a young boy, I frequently went to work with him on Saturday mornings and enjoyed sitting in his big office chair. I remember a large marble on his desk that was inscripted with the Golden Rule. My father explained that the Golden Rule was the Samsonite founder’s corporate motto and he expected employees to practice it in business and life. Dad retired from Samsonite in 1989 as Director of Transportation and Distribution, a career that would closely parallel my own.

My mother’s family of German immigrants had settled near Golden, Colorado at the turn of the century, seeking new opportunities in America. Her grandfather, Nicholas, built and operated a boarding house in Golden, Colorado after receiving a loan from Adolph Coors, the founder of Coors Brewery. Coincidentally, the boarding facility was called Omaha House.

My grandfather farmed in Rolling Hills, a small suburb squeezed between Golden and Wheat Ridge, but lost the farm during the Great Depression.

Summer after Freshman year − 1972

Doug and Nancy after engagement − 1980

With children after daughter Jenna’s birth − 1993

Growing Up on the Front Range

I was the oldest of three children and grew up in a classic “Father Knows Best” family. My dad was the breadwinner and my mother was a stay-at-home housewife and mother. My brother and I greeted my dad every night at the door when he came home from work, excited to hear about his day. While our first home was a rental near Sloan’s Lake, my father’s advancement at Samsonite afforded him the opportunity to buy a small piece of property in Wheat Ridge down the street from

Doug and Nancy on their wedding day − 1981

COAL TRANSPORTER | 45

Reflections / Doug Glass continued

Doug at the Denver Fire Station − 1959

Doug, brother Dave and sister Nancy − 1967

Lutheran Hospital, where he built a custom home that he lived with my mother for 64 years. Looking back, I realize that my family was part of an amazing transformation spreading across the country at that time–realization of the “American Dream!!”

It was an exciting time and I have fond memories of that house and occasionally drive by when I am in town. My mother and father’s long marriage was imparted to my siblings and me, who have over 100 years of combined marital bliss.

My parents set high standards for their children and expected us to earn our own spending money and achieve good grades. My first jobs included mowing lawns in the summer and clearing snow in the winter. At 13, I acquired two paper routes and became responsible for over 100 customers. Delivering newspapers every day for three years instilled me with great responsibility and introduced me to the value of customer satisfaction, particularly around Christmas, when tips were distributed. At 16, I became the assistant manager at the Dairy Queen down the street from Elitch Gardens–my dream job, as I was quite fond of the product. By 18, I had my fill of the ice cream business and joined the Teamsters. I spent the next four summers loading freight onto trucks and railcars. Little did I know that “freight” would play a role in my future.

In Junior High School, a friend encouraged me to join the local Boy Scout Troop. During Colorado winters, our Troop skied every weekend at Winter Park and I recall spending several nights a season in a snow cave we dug not far from what eventually became the Mary Jane Ski Area. It was surprisingly warm, but I elected not to make a long-term practice of it. The Boy Scouts pushed me beyond my comfort zone and gave me confidence to take risks in other areas. Skiing would also become an important part of my recreational life, along with summer camping throughout the beautiful Colorado Rockies. As my skiing abilities advanced, I had an opportunity to join the Volunteer Ski Patrol at Winter Park, Colorado. All of my winter weekends were spent patrolling the slopes, where I learned avalanche training and first aid. I continued to volunteer ski patrol all through College and occasionally rode the ski train from Denver to Winter Park.

46 | COAL TRANSPORTER

HS Freshman − 1968

The ski train operated over a portion of the route used by UP’s eastbound coal trains.

By junior year, it was time to start thinking about college and a field of study. My parents said I could go anywhere in Colorado and they would pay for a four-year degree. I had no idea what I wanted to pursue, but my dad had always pictured me as a doctor and I often followed my father’s advice. He liked the idea of being your own boss and having a job that would be needed in good times and bad. After visiting several schools, I decided to attend the University of Colorado in Boulder. It was liberal, at the center of the hippie movement and had a close association with the Rocky Mountains. Boulder was also a great “bike” town and I often rode my bike from campus into the mountains on sunny days, wore huge mountain climbing boots to maneuver the curbs around campus (the fad back then) and grew my hair long. I was a classic counter-culture student–or at least I thought I was.

After two years, I realized that my heart was not in the medical profession and that created a dilemma. Coincidentally, I was participating in a leadership class on campus that was hosted by influential Coloradoans like Bill Coors, CEO of Coors Brewery. He spoke at one event about the mystique of Coors beer and their ambitious plans for expansion. I decided I liked the idea of pursuing a marketing degree and working in the beer business. I knew I was good at drinking it so why not sell it? I changed my major to business and my counselor convinced me to commit to an extra year and major in a science, given my two-year “sunk” investment in pre-med. My parents were dismayed by my decision and my father insisted that my 5th year at Boulder be on my dime. In 1976, I graduated with a degree in Business Administration and a degree in Economics. It was a proud moment for my once dubious parents, even though my dad’s dream of me becoming a doctor would soon be a passing memory.

The business climate in Colorado was tough in 1976. The 1973-74 oil embargo had taken its toll on the economy and there was very limited manufacturing and few attractive jobs for college marketing graduates. Colorado had a big tourism economy and I toyed with the idea of becoming a ski instructor, but I

decided that was not the most responsible thing to do and would only postpone a “real” job. I pursued a job opportunity at Coors Brewery and several other companies around the country. Coors was interested but said they would likely relocate me to another state and work in sales a few years.

I asked where and they said “Nebraska.” I had driven through Nebraska and I thought there was no way I could ever live there.

Marketing team staffed by industry experts.

I was impressed with the team and figured I could tolerate Omaha for a few years, gain some experience and move on. A week later I was offered a job and in August, packed everything I could fit into my 1971 Volkswagen bug and headed to Omaha.

My first job at Union Pacific Railroad was in the Market Research Department and my assignment was to determine whether domestic Nebraska, Really? and global demand for plastic would replace glass It was midsummer 1976 and I was getting close Doug as a Freshman bottles, a product important to Union Pacific, to graduating and making a decision about who originated soda ash from Green River, Wyoat CU − 1976 employment. One evening my father asked if ming, the largest source of natural glass making raw I had ever considered Union Pacific Railroad. I said “a railroad? materials in the world. The team liked the work I did on glass Why would I want to work for a railroad? What would I do? (no known family connection to the glass industry) and I was Run trains?” He told me that UP was building a marketing subsequently hired as a market analyst in the Equipment Plandepartment and was looking for college marketing majors. He ning group. My job was to perform the annual budgeting and thought he could get me an interview if they liked my resume. planning for freight equipment of all types. I remember employI was interested in the idea of working in marketing but was ing these large paper spreadsheets and laying out the months lukewarm about the idea of living in Omaha. Needless to say, of a year, equipment types and other data on the vertical and I sent in my resume and was invited for an interview. horizontal axes, with each cell manually entered by pencil. One When I visited Union Pacific headquarters I was surprised error and I had to make hundreds of recalculations by hand. by the changes they were making and the new role marketAfter a year on the job, excitement built around the arrival of a ing would play in their business model. The railroad industry new Wang Computer with its own built-in desk–the only one in seemed to have a bright future and was preparing for deregulathe department. None of us fully appreciated the implications of tion and transitioning from a Pricing Department to a office computers at that time, but admired the workstation like

COAL TRANSPORTER | 47

Reflections / Doug Glass continued

Daughter Jenna’s Baptism − 1993

Doug and his children at Vail ski area − 1997

it was a pagan god. A year later, IBM introduced the desktop computer and those spreadsheets I developed were converted to bits and bytes.

My career seemed to advance quickly at Union Pacific and I found myself working in several businesses. My twoyear threshold had long passed and I was enjoying work and Omaha was starting to grow on me. I discovered that one could appreciate the beauty of the Great Plains as easily as the Rocky Mountains. By 1981, the railroad industry was deregulated and everything changed overnight. In 1982, the other shoe dropped and Union Pacific merged with the Missouri Pacific Railroad, who moved freight north and south to complement our movement east and west. I remember many long hours were expected at the newly merged railroad, with weekends considered normal workdays. The change was huge and we moved people around the country, markets expanded and we brought on new customers. These events also invited leadership changes.

The railroad recruited a new CEO by the name of Mike Walsh, who was a Senior Vice President at Cummins Engine.

He had been successful in preventing Japanese giant Komatsu from penetrating the U.S. diesel truck engine market. Mike was a force of nature. He was young, aggressive and always had his sights set on bigger and grander objectives. He also had no prior railroad experience, an anathema in an industry filled with loyal employees and long careers. I thought of Mike as a one of a kind leader who could do anything and he introduced tremendous change to the railroad and embraced young and upcoming executives. Mike recruited a new marketing and sales leader from Xerox, by the name of Fred Henderson. Fred was an outsider and had a great reputation for changing the culture at Xerox, a very famous brand at that time. Fred was also profiled in a Harvard Business School Case Study about effective and ineffective leadership, which was intimidating for those of us who would be working for him. Word spread quickly that if Fred liked you, you were on the fast track. If not, you were probably out. Fortunately, I hit it off with Fred and soon found myself running the automobile business at Union Pacific in 1984 at the ripe age of 31. Union Pacific already had a great auto franchise

and my job was to grow our auto business domestically and expand with the Japanese and Korean manufacturers. It was an exciting assignment that lasted 7 years. Interestingly, Matt Rose was my counterpart and competitor at BNSF during part of my tenure. However, I learned that Matt was on a slightly different career path!

48 | COAL TRANSPORTER

Best Merger Ever

After my first 4 years at Union Pacific, a young woman by the name of Nancy Hurt started working in the Finance Department. Nancy had graduated from the University of Illinois and we became acquainted through bowling and volleyball leagues at Union Pacific. I thought between her financial skills and my marketing acumen, this would be a merger made in heaven! Actually, it was more romantic than that. I immediately knew she was the one and we were married in May of 1981. Nancy continued her career for several more years and then resigned to be a work- at-home mom. Life was great, but the loss of our first borne twin children, Brian and Lindsay, born prematurely at 26.5 weeks and passed away within two weeks, really set us back emotionally. While the grief hit us pretty hard, God soon blessed us with another son, Brandon.

By 1993, we had five healthy children, four boys and one girl– a big family by most standards. There is not a passing day that we don’t think about Brian and Lindsay and what their lives would be like had they survived.

Coal, Really?

By February 2005, I was responsible for managing our Industrial Development group, our Direct Marketing team of 30 young professionals and a department of 150 employees responsible for managing transload freight and intermodal services. I loved my job and assumed the last 12 or so years of my career would be spent managing these businesses and working for Jack Koraleski, who I had known since I started at UP. One day in early 2005, Jack walked into my office and asked “how would you like to manage our coal business?” I was shocked and my first response was “what is happening to Lance Fritz, the current

Attending Peabody Energy event in West Yellowstone Park, August 2005

Visiting with Bud Walker, Frank Clemente, and Duane Richards circa 2012

Vice President-Energy?” Jack said, “Don’t worry, Lance will be following two coal train derailments on the Joint Line in northjust fine.” On March 1st, 2005, after spending 15 years in the east Wyoming. The next two years were the most challenging chemical business and 7 years of my career in Automotive, I of my entire career as both western railroads and our customers found myself in charge of Union Pacific’s large coal business dealt with strong demand and a herculean effort by the railroads and a commodity I did not fully appreciate. I thought to myself to restore the roadbed, add new capacity and enhance service “How complicated can it be to manage one commodity?” Little levels to handle demand expected to come from the construcdid I know! tion of 300-plus domestic coal fired powMy first two months in coal were er plants that were in the planning stage, like drinking from a fire hose but the best as well as growing demand overseas. part was meeting all of the great people By mid-2007, the coal and power at NCTA and American Coal Council industry were thriving and the growth and my many wonderful customers. I cycle looked like it could last for many found the electric power and coal indusyears. I assumed leadership roles at try very welcoming and I was impressed American Coal Council and forged that everyone knew each other and actuimportant alliances with NCTA and ally socialized together. This was different other groups. I also worked with our than other businesses I had managed. then CEO, Jim Young, who became the There were many great relationships Chairman of the American Coalition for and, of course, many legendary execuClean Coal Electricity in Washington tives. I remember early phone calls from D.C., to raise political awareness for Doug attending a Mitch McConnell Tom Canter, Duane Richards, Betsy investment and policy support for low Fundraiser in 2015 Monseu, Mike Raphole, Ginny Farrow, carbon technology and promote an “all Jim Orchard, Bob Neff, Jim Campbell of the above” strategy for energy diversiand David Carlile, to name a few. These industry leaders had fication. During this time, our coal business grew to become the considerable tenure in the industry, were enthusiastic about the largest at Union Pacific and, of course, I considered my team as future and wanted to work closely with the railroad industry. one of the best in the industry.

I sensed this was going to be the best job of my career but my As if normal business challenges were not enough, the two-month honeymoon came to a close on May 8th and 9th, great recession of 2008 hit the U.S. economy hard and took an unforeseen and heavy toll on the electric power industry.

At the same time, natural gas fracking was emerging as a new and potentially meaningful source of supply and we knew that it could materially change the energy industry, even though most industry experts felt that coal would continue to play a prominent role in providing low cost energy to power Americas’ electricity industry. I continue to believe the U.S. needs to maintain energy diversity and strongly suspect that the developing world’s appetite for coal-based electricity will continue for many years to come. Having lived through several oil crises, years of natural gas price volatility and Fukushima, our country must be prepared for unexpected and unforeseen events. How this all plays out will be exciting to observe.

Doug and wife, Nancy, Visiting with Brian Galli at Florida

Coal Event − 2012 COAL TRANSPORTER | 49

Reflections / Doug Glass continued

Doug At Completely KIDS Event − June 2016

Art Aficionado or Piano Man? Maybe Both.

After a year into retirement, I still consider my new life as a work-in-progress, with new adventures ahead and much to accomplish. There are no motor homes in our future, or any trips to Tibet to visit the Dalai Lama. But I do have a passion for fast cars, great music and a good book now and then.

Nancy and I love living on the water just west of Omaha, at least what little bit we have in Nebraska and frequent excursions on our jet-ski or pontoon boat with Michael Bublé playing in the background are enjoyable activities in the warm weather months.

I believe in giving back to our amazing community and am current chairman of the board for a non-profit organization in Omaha called Completely KIDS, that provides before and after school care, education and nourishment to underprivileged children in Omaha. Working in the non-profit field has given me a much better appreciation for all of the dedicated and selfless social workers that are not motivated by money but by making society better one child at a time.

Our five adult children are all out of school and pursuing their own lives and that is exciting to watch. We have one married son, a daughter-in-law and a grandson who we are spoiling rotten.

I have always loved art and have been collecting regional artwork for over 35 years. I think I have filled every available wall and corner of our house with something interesting and could easily see myself working part time at a gallery (still waiting on an offer). I have also taken up piano lessons after abandoning the instrument over 55 years ago. My goal is to play solo at a piano bar–you have to have goals even if they are not realistic! Health consciousness has moved up on my priority list and food and drink have dropped a few levels–or at least food (wine is still considered healthy isn’t it?).

I love reading through the local newspaper, the Wall Street Journal and New York Times every morning–my favorite part of the day. Sadly, my golf game is about the same, but I still have visions of “birdies” and “pars” and a new driver in my future.

50 | COAL TRANSPORTER

Doug and Nancy − December 2015 My model trainset sits in the box in the basement, but I am still planning to run my own “model” railroad someday soon–just having a few construction delays!

I don’t know how my life will change under retirement or what new and unexpected twists and turns will materialize.

I can recite jobs held and business successes, but the most cherished memories are the people I have worked with and the relationships built throughout many industries and my 40 years of railroading. Yet my proudest accomplishments remain my five children and my 36-year marriage.

I occasionally reminisce about those Saturday mornings in my father’s office at Samsonite and the marble on his desk with the inscription “Do unto others as you would have them do unto you.” I like to think that I live my life in the spirit of this rule! s

Doug, Nancy and Family with Grandson, Auggie and Daughter-in-Law, Leigh − December 2015

The View from the Caboose

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

By Pete Moss & Ann Thrawsite

ANN: Hey Pete. I haven’t seen you since election day. I am anxious to hear what you thought about the night.

PETE: Well to be honest, I didn’t even watch the coverage given that the outcome was a foregone conclusion. I had a few hot (ahem) cocoas and went to bed early. I didn’t hear Trump won until the next day.

ANN: Well, that seems very unlike you to throw in the towel early.

PETE: True. If someone wants to bully me into silence by a bunch of name calling, I’m usually not their guy. I’ve grown immune to it over the years given that I’ve actually deserved some of it - nothing that ends in an “ist” though, ‘cause even ignoramus ends in “us.” But when people don’t deserve it, it’s just a stupid thing to do.

ANN: The coverage was quite entertaining. You should watch some of it on YouTube when you are bored. Someone tweeted that it was so quiet in Clinton headquarters that you could hear an email being deleted.

PETE: That’s a good one. Am I correct that an old tweet is called a twit? Grammar was always one of my strengths and that tweet is past tense. I can tell you though keeping up with what passes for the news these days is downright exhausting. I really need some R&R. ANN: Yes, there is the left leaning news, the right leaning news, and now the fake news. It’s enough to give anyone a headache.

PETE: Being a fake news journalist wasn’t a career choice when I was growing up. I’d like to think that I’d have been quite good at it.

ANN: Well if you really need some R&R, the first step is to take a break from it all. I’ve even sworn off Facebook for the time being.

There is just too much politics and not enough pictures of babies, family fun, and exotic vacations.

PETE: Oh, I love pictures of the wee ones!

ANN: Step two is to sign up for the NCTA Spring Conference in Tucson. Warm days, clear nights, great scenery, and good friends – it’s the perfect recipe for some rest and relaxation and you’ll even learn something new.

PETE: Great suggestion. I’ve seen all the conference announcements and I do have an issue with those weekly updates.

ANN: What’s that? I think they are very helpful.

PETE: The issue is that all those restaurants sound so yummy and all the activities so interesting, how am I supposed to do it all in three days and still show up in the meeting room?

ANN: Pete, it’s all about making choices. The good news is that with all the guidance from the NCTA, you can’t make a bad one.

PETE: See, there you are talking about NEWS again.

ANN: Oops. Sorry.

PETE: That’s ok. I actually like hearing good news. It’s about time the coal industry had some. I especially like the idea that for every new regulation they make, the bureaucrats have to get rid of two outdated ones and the result has to be cost neutral. It’s about time.

ANN: Yes, hopefully the rollback button on regulations will be helpful for everyone and will get the economy going. Plus, I’ve been worried that every time I take Wolfgang down to the dog park that he creates a new “Water of the United States.”

PETE: Hee hee. Ann, I think I’m rubbing off on you.

s

Have something to say to Pete?

Send comments or questions to pete@nationalcoaltransportation.org COAL TRANSPORTER | 51

NCTA Membership List A. Stucki Company AKJ | NALCO Alliant Energy Corporate Services Alltranstek LLC Alpha Natural Resources Alpha Products, 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 CDG Engineers, Architects, Planners CIT Rail City Utilities of Springfield Cleco Cloud Peak Energy Colorado Springs Utilities Commtrex CONSOL Energy Inc. Consumers Energy Company Contura Coal Sales, LLC Cooper Consolidated CPS Energy Crown Products

CSX Coal & Ore Terminals Dairyland Power Cooperative David J. Joseph Company Detroit Edison Duke Energy Dynegy, Inc. Ecofab Australasia The Empire District Electric Company Entergy Services, Inc. Exponent, Inc. First Union Rail FirstEnergy Florida Power & Light Company FreightCar America GATX GE Transportation 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 High Country Railcar IHS - Energy Publishing, LLC iIRX Impala Terminals Burnside, LLC JP Morgan Kansas City Power & Light KCBX Terminals Co. Kiewit Mining Group Inc. Kinder Morgan Terminals Levin Richmond Terminal Lexair, Inc.

LG&E and KU Energy Lighthouse Resources, Inc. Locomotive Service, Inc. Lower Colorado River Authority Luminant Energy Maxeefish LLC MCRL Coal Car Topping 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 MPL Innovations, Inc. Muscatine Power and Water Nebraska Public Power District New York Air Brake Northern Indiana Public Service NV Energy OG&E Electric Services Oglethorpe Power Corp.

Omaha Public Power District Otter Tail Power Company PacifiCorp Peabody Energy Platte River Power Authority Portland General Electric Progress Rail Services, Corp Rail Link Railroad Financial Corporation RAS Data Services

RESIDCO Romeo RIM RungePincockMinarco Salt River Project Sandy Creek Energy Station Seminole Electric Cooperative, Inc. Shur-Co, LLC SMBC Rail Services LLC Southern Company Operations Standard Steel Strato, Inc. T Parker Host Talen Energy Tampa Electric Company Tennessee Valley Authority Three Rivers Marine & Rail Terminals The Timken Company Transportation and Logistics Advisors, LLC Transportation Services Inc. TrinityRail Tri-State G&T Association TUCO/NexGen Coal Services Tucson Electric Power Company Wabtec Corporation WEC Energy Group Westar Energy Western Farmers Electric Western Fuels Association, Inc. Westmoreland Coal Sales Company WestRail a Division of Aero Transportation Products Xcel Energy Xcoal Energy & Resources

Index to Advertisers Alpha Products Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Amsted Rail. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Appalachian Railcar Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Cloud Peak Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Cooper Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Crown Products & Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Lexair, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inside Front Cover Mitsui Rail Capital, LLC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 New York Air Brake. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Outside Back Cover

52 | COAL TRANSPORTER

NexGen Coal Services, Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 PRB Coal User’s Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Progess Rail Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Slover & Loftus, LLP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Thompson Hine, LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Western Fuels Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 WestRail a Division of Aero Transportation Products. . . . . . . . . . . . . . . . . 35 Xcoal Energy & Resources . . . . . . . . . . . . . . . . . . . . . . . . Inside Back Cover

+1 (724) 520-1630 or xcoal@xcoal.com

A leading, worldwide supplier of U.S.A. origin metallurgical and thermal coals.

• Supplying low, mid and high volatile hard coking coals, semi soft coking, PCI and anthracite coals to steel customers and thermal coals to electric utility and industrial customers, globally.

• Creative solutions to meet shifting global raw material sourcing patterns • Innovative logistical processes to maximize vessel efficiencies • Export throughput capacity at multiple U.S. East Coast ports

43.4298° N 89.1589° W

DESTINATION:

INCREASED PRODUCTIVITY FEWER FALSE, COLD-WHEEL READINGS? NOW YOU’RE GETTING WARM. New York Air Brake’s innovative DB-60 II Control Valve with Brake Cylinder Maintaining™ (BCM) improves the accuracy of these hot/cold wheel detection systems – identifying cars with worn and dangerous brakes, while avoiding unnecessary set outs: • Brakes in good condition remain fully able to respond and ‘run warm’ – earning a passing grade at automated inspection stations.

• BCM maximizes car in-service time while increasing safety by restoring up to 85% of braking power that would otherwise be lost due to brake cylinder leakage.

Get there. Learn how our DB-60 II Control Valve with BCM can help reach an ideal balance of safety and uptime – call us at 315.786.5271 or e-mail Vincent.Moore@NYAB.com for a copy of our position paper, How Cold Wheel Detection Systems Work.

Engineered to Outperform

www.nyab.com | 315.786.5431 | 748 Starbuck Avenue, Watertown, New York 13601