NCTA Issue 2, 2018 by National Coal Transportation Association

ISSUE 2 | 2018

BLOCKCHAIN Could a Short Line be the Answer to Asian Coal Exports? Wyoming Integrated Test Center Goes International Reflections: Dennis Wanless

101

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Contents Could a Short Line RR Help Ship Coal to Asia?

Wyoming Integrated Test Center Launches onto International Stage

4 W. Meadow Lark Lane Suite 100 Littleton, CO 80127-5718 Phone: 303-979-2798 Fax: 303-973-1848 www.movecoal.org Editor: Melinda Canter Phone: 720-227-1049 melinda@movecoal.org Production By: Suckerpunch Creative Inc. info@suckerpunch.ca www.suckerpunch.ca ©2018 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.

Reflections: Dennis Wanless

FEATURES

DEPARTMENTS

Blockchain 101 Jason Lewis & Michael Loesch Winston & Strawn, LLP

Message from the NCTA President Emily Regis

Could a Short Line RR Help Ship Coal to Asia? Katherine Waring Slover & Loftus, LLP

Message from the NCTA Executive Director Tom Canter

3 6

Wyoming Integrated Test Center Launches onto International Stage Jason Begger, WY Infrastructure Authority

Message from the Incoming NCTA Executive Director Mark Ourada

Randy’s Railcar 101 Randall Thomure Rail Asset Advisors, LLC

2 6

Technology Junction Martin Lew, Commtrex

NCTA Welcomes its Newest Member

3 4

NCTA Memberhip Criteria

5 0

Membership List

5 0

Index to Advertisers

Calendar of Events

5 2

View from the Caboose

PUBLISHED BY: National Coal Transportation Association

ISSUE 2 | 2018

Reflections: Dennis Wanless By Mark & Merrillee Ourada

CONFERENCES 8

2 2

Spring General Conference Review Palm Coast, Florida, April 23-25, 2018 2018 O&M Conference Review Nashville, Tennessee, June 11-13, 2018

Spring General Conference Review

COAL TRANSPORTER | 1

President’s Report / Emily Regis

A Message from NCTA President, Emily Regis

INGENUITY AND KEEPING OUR COOL

t’s summer, a time when most people are getting ready for vacations and spending more time outdoors with the longer days and warmer weather. However, here in southeastern Arizona we are in now in full retreat from the heat, and tend to reverse our activities to spending time indoors during the middle of the day and outdoors in the early morning hours or late evening. I marvel at the hardiness of the people who lived in Arizona in the days before electricity and air conditioning were invented. We can live here comfortably now due to the availability of electricity and a wonderful modern convenience called air conditioning, something I don’t think I can live without, as well as something I’ve learned I appreciate more than ever. Because its summer and I’m spending more time indoors during the day, I find it’s a great time to catch up on correspondence and do things like go through files and pictures, and catch up on my reading. This all sounded like a very good plan when the thermometer starting reaching triple digits last week. However, this was also the time when the AC unit that serves my office at work broke down. This wouldn’t have been too bad since I still had a small fan I could plug in, and with the shades pulled down and a bucket of ice water nearby, I could make it through the day okay as long as I could go home at night to soak in an ice-filled bathtub with the AC turned up full blast. However, much to my chagrin, I came home to find the AC in my house also decided to quit working. The repairman came sooner than expected, but didn’t actually fix anything, and then came back two subsequent times struggling to diagnose the problem. He finally determined that a part had to be ordered and said he wouldn’t be coming back until the next morning. So after spending two sultry nights at home sweating and not sleeping, I devised a temporary solution to my “AC-less” situation. We have an old window air conditioner unit no longer in use since we installed central air at my house. I wrestled that monster out of the garage and

2 | COAL TRANSPORTER

dollied it over to the house. Unfortunately, the thing was too heavy for me to lift up to any of the windows. With my husband away for the evening I knew I wouldn’t get any help until a very late hour, so I devised a temporary solution. With much difficulty, I positioned the unit in front of the cat door (it’s really a dog door, but don’t tell my cats!) and propped it open. I plugged the unit in and it was soon wafting cool air throughout my living room. However, there was another problem. Since the unit was designed to cool only one small room, I knew I had to reduce the size of the interior cooling space and thus began gathering quilts and spare pieces of copper pipe to build a smaller tented space in front of the cat door. When my husband came home later that night he wasn’t sure if he’d walked into our living room or a padded cell, but at least we had the benefit of that small cool space for the evening. In the morning our repairman came, the AC got fixed and the cats got to have their door back. If nothing else, this proves how resourceful (and hot!) we are. And also that there is no problem that we can’t solve without a little ingenuity and a few quilts and an extension cord. Ingenuity is a unique quality I’ve been observing among the people who staff the coal and rail industries. I’m impressed with people who, in the face of tough times at work, or downturns in the markets that impact their jobs, or even when a personal issue (like the AC unit breaking down), keep their cool and come up with new ways to keep the power plants running and manage plant efficiencies while maintaining stability and reliability for the power grid and for the good of their community. All of this, while refusing to complain or blame others for what’s happening. Our people keep their eyes on the future, and that’s the spirit of the people who keep the lights on. So while it might be 103 outside and the steering wheel of my car has turned into a branding iron and hot water comes out of both taps, we can always find a way to keep our cool. s

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Executive Director’s Report / Tom Canter

A message from NCTA’s Executive Director, Tom Canter

TIME

s I reluctantly finish a season of life that I know as twenty-three happy and fruitful years at NCTA, reflection on my many blessings seems proper as well as commenting on time itself. I have been grateful to serve the many segments of the coal transportation industry. Innumerable associates have been advisors, mentors, helpers, staffers, and, most importantly, faithful friends throughout my tenure. Their assistance and trust in me has allowed an unexpected extension to a career in engineering, law, military science, and management. Yep, it has been a checkered, but always interesting career. I will use the first of clichés in this message – “It is now time”.

THE OBSERVATION OF TIME

Time is the continuum between a past eternity and a future eternity. Time is one of the three elements of the cosmos – that is, the elements of matter, space, and time. (Yes, the Greeks and modern musicians were wrong naming earth, wind, and fire as the elements.) This trinity of elements arising from intelligent design is inseparable and integrated within the whole. Each element can be identified or classified, but none of the three elements above can be truly placed into a separate selfexistence. The integral relationship of the elements holds true in Newtonian and nuclear physics and is noted by the Theory of Relativity. It is impossible to avoid time as a fundamental and integrated element of the universe to be both observed and experienced. No wonder both integral and differential calculus overwhelmingly specify time as the operative variable, and time always seemed to be the on the abscissa of every graph in school. So what? Well, time is the element of the universe that is the most experiential and observational to humans. Yep, look in the mirror or play basketball after 50 years of age and you will observe and experience time. The ancient Chaldeans noticed all of this and saw that the continuum of time needs an absolute standard by which to determine its passage. The Chaldeans looked to the heavens and witnessed the sidereal movements of the sun, the moon, and the stars. Although they did not develop a wholly accurate timekeeping process, we have an enduring system of seconds, minutes and hours, months, and years they developed and put in place. Every unit of measurement was a multiple of 6 because the Chaldeans used a mathematical system to the base 6. So it is, that we observe time, times, seasons, and accept the occasional tyranny of the clock and the calendar.

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To everything there is a season, and a time to every purpose under the heaven; Ecclesiastes 3:1 REFLECTION

Time is the necessary element allowing progress, change, transitions, and completed projects. Remember being a child with the great and impatient desire to grow up and undertake the wonderful adventures of your imagination. You simply urged time to speed up. Time allows the satisfaction of seeing the accomplishments of your children and grandchildren. Time allows love to blossom, grow, and mature. Time allows one to fully appreciate the gift of a loving and caring spouse and his or her dedication to your success. Time allows crops to grow, projects to be envisioned and completely built, cultures to change, and economies to mature. Time allows for retirements that are filled with meaningful and fulfilling activities. Upon reflection, time is a good thing allowing many wondrous events and successes to come into our lives. Yet, time is a taskmaster, and it brings the challenges, sorrows and afflictions that affect every life. Time waits for no man. I have witnessed the passing of many of my good friends at NCTA. I surely miss them. They are notable in my memory for contributing wisdom, wit, and plain good advice in the many joint endeavors on behalf of the NCTA membership. I have been blessed to surpass the Biblical allotment of threescore and ten years, and I am aware that time is a good, but imperfect, healer. Yes, it is now time to start a new season of life. I plan to be around and helpful to my friends and the industry. I ask that you give your support to Mark and Melinda as they continue the good work of leading our membership to fulfill our mission. Coal continues to be the affordable, secure, and fastest growing energy source in the world. I do not believe that coal is finished as an important and sustainable energy source for the United States. May God richly bless you and as always; have a safe day producing energy and wealth for the good people of North America. s

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Incoming Executive Director’s Report / Mark Ourada

A message from NCTA’s Incoming Executive Director Mark Ourada

AN INTRODUCTION

t’s hard to believe how rapidly the coal industry has changed in just ten years. When I first started at the American Coalition for Clean Coal Electricity (ACCCE) in July of 2005, the coal industry, and coal-fueled electric generation, was very robust. Ten short years later – when half of the ACCCE staff was let go – the impact of low prices on natural gas due to fracking, the continued incredibly well-funded attack from the environmental left, and an anti-coal regulatory agenda at the federal level (which, in my opinion, ignored states’ rights under the Clean Air Act at every turn) has had a devastating effect on coal, on coal-fired power plants, and most significantly, on the families and communities that have relied on this natural resource for their livelihood and prosperity. I’ll come back to that in a moment. Since this is meant as an introduction to who I am, here’s a little bit about my background, both personally and professionally. I grew up in rural southern Minnesota for my first 11 years, after which our family relocated to St. Paul for a few years then settled in Buffalo, MN, about 45 minutes west of downtown Minneapolis.

Mark and eldest daughter Erin in SF. 6 | COAL TRANSPORTER

My father was a physician in private practice for his entire career; my mother, a dental hygienist by education, was predominantly a mother and homemaker until we all got older. I am the fifth youngest of six children, all adopted except my youngest sister being the only biological child. Although my family and I have moved a number of times to variety of cities in or within about an hour’s drive from the Minneapolis/St. Paul metro, I have been a born-and-bred Minnesotan my entire life. After high school, I attended St. John’s University and earned B.A. in political science. While I didn’t know it at the time I selected political science as a major – it was more of a default than a ‘calling’ – it did prove to be a sign of where my life’s journey would take me. The beginning of that journey started with my mother’s involvement in politics. Once all her children were grown leaving her with more free time, my mom turned to volunteer activities; one of those was involvement in Republican politics. It was through this connection of hers that I ended up doing an internship for then-Gubernatorial candidate, David Durenberger,

Mark and daughter Alex at Twins game.

I look forward to bringing my knowledge, talent and experience to NCTA members in the coming years.

who later switched his efforts to the U.S. Senate race… and won. This internship put me in position to become a congressional district staffer for Congressman Vin Weber. The more I worked for an elected official, the greater my interest grew in being a chief of staff, rather than the ‘elected person’, until Vin convinced me to run for the State Senate at the tender age of 26. While I did lose, receiving only 47% of the vote, it was a strong showing and it convinced me that it was definitely something I knew I wanted to try again. Twelve years later, I did run again for the State Senate, this time winning with a slim 324-vote margin. I went on to be re-elected three times, happily, never again with such a slim victory! It was during my third year in the Senate that I secured a position on the Utilities Committee and became very involved in energy issues, and loved working this particular issue area along with my other priority – transportation. Prior to entering the Minnesota Senate, and part-time thereafter, I worked for a blacktop contractor as a lab technician, designing and testing asphalt mixes and aggregate bases. Although on a much smaller scale, this provided me with direct knowledge of mining issues, which included environmental impacts, and interaction with the public. After four terms in the Senate, I was recruited away to begin work at the American Coalition for Clean Coal Electricity. For the first six years, I covered the national organizations of Governors, Legislators, Attorneys General, and both utility and environmental regulators. For the last

Mark and Merrillee in Nashville. four years, a corporate re-structuring shifted me to the role of Regional Vice President where I managed a 12-state region that ran from the Midwest through the Rocky Mountains, while also still covering many national and regional groups. During this time, I had wide exposure to the issues, companies and groups surrounding mining, transportation and electricity generation. In fact, MANY of the NCTA membership are, or were, members of ACCCE during my tenure there. My years in the Senate, and then especially my tenure with ACCCE, have given me a strong working knowledge of both the companies and the issues surrounding the transportation and use of coal. This, naturally, is very helpful when it comes to dealing with the interplay, and natural friction, that occurs between the related industries. I believe we turned balancing those somewhat challenging dynamics into an advantage at ACCCE, and I know we can continue to do the same to bring greater benefit to NCTA as well! I clearly understand the challenges of the industry, and while I need to learn the finer details of transportation issues for coal, I look forward to bringing my knowledge, talent and experience to NCTA members in the coming years. My wife, Merrillee, and I will continue to reside in Buffalo. I am fortunate that both of my daughters live in the western suburbs of Minneapolis, so they, along with grandchildren Lennon and Lena, are close by. s

COAL TRANSPORTER | 7

2018 Spring Conference / Review

NCTA 2018 Spring Conference Hammock Beach, Palm Coast, Florida | April 23-25, 2018

hank you to all who were able to attend the NCTA 2018 Spring Conference. Held at the Hammock Beach Club Resort in Palm Coast Florida, we were fortunate to be treated to a beautiful beach setting for the three days of meetings. Attendees were able to enjoy many varied activities in the St. Augustine area. It was another excellent opportunity to network with business associates while absorbing important information and enjoying outstanding culinary delights while the palm trees swayed in the breeze. The opening Keynote was given by Russ Epting from CSX. A key theme of his presentation was “Principles in Changing the Culture” where Russ identified two of the several Culture Change principles. Those were a.) identifying new talent and b.) developing future leaders; he also explained that these changes in culture drove significant operational improvements for CSX. Russ also showed how streamlining management from nine Divisions to four Regions created changes that improved service for customers. The second day Keynote address was provided by the always entertaining and informative Jim Thompson of IHS Markit. Jim covered a wide range of subjects relating to the future of coal and coal transportation and left us with cautious optimism for coal to ponder. A thorough sprinkling of good philosophy and humor noting the human condition was also appreciated. Waterborne Transportation was covered by Steven Alley of Ingram Barge and David Ryan of Associated Terminals. David specifically zeroed in on a number of issues related to barge traffic on the Mississippi during his presentation; “Mississippi River: Ol’ Man with a New Outlook.” Both gentlemen agree that waterborne capacity is tight and the water is very busy with an optimistic outlook for the near future.

8 | COAL TRANSPORTER

Attendees listened to two separate sessions regarding the electric grid. The first was presented by Jordan McGillis from the Institute for Energy Research, who spoke about the “Bomb Cyclone” and lessons learned from the sustained extreme cold in the Northeast during January of 2018. Later in the conference, David Schweizer, Manager at PJM, looked at fuel mix and grid operations over the last several years and how they interact affecting both cost and resiliency to the grid. Martin Lew of Commtrex, gave a very interesting and energetic presentation called “Managing Your Rail Fleet with Changing Demographics of the Workforce.” A main tenet of his presentation was centered on the retiring baby-boomer generation, and on their replacement by technology-driven and social media savvy Millennials. He went on to discuss how their technological approach to both work and personal time will change how the industry works, explaining how this dynamic will continue to aggressively push change in the coal transportation industry. Ken Eriksen of Informa Economics delivered on our request to discuss macroeconomics. This was truly a review of the current economic climate in the world and the interaction of commodities from soybeans and corn to coal and wind turbines. Well done. We always want to address coal supply on a regional basis and this was expertly handled by Bob Burnham of Burnham Coal who addressed supply and demand of both the PRB and the Illinois Basin. This brief summary does not cover every presentation. Note some other compelling and informative talks during the conference: The Case for Rail Growth, Metallurgical Coal Market and Terminals, and an Update on Coal Shipper Issues, the Outlook for the Coal Generation Fleet, and an Eastern Coal Producers Viewpoint. As always, PowerPoint slides of the presentations are available to NCTA members on the NCTA website – www.movecoal.org. s

Karen Bramley, Ken Eriksen, Emily Regis, Dave Schweizer, and Casey Kaptur

Bill McNally, Jay Leadingham, Tom Clark, Bob and Caryl Pfeiffer

John and Sue Cruikshank and Lin and Lynne Midyett

Happy Birthday, Barb Porter

Kelvin Dowd

Linus and Emily Regis

Mary Sandlin, Sandy Winek, Kathy Benham and Kim Roach

Lee Clair

Kevin Koepke and John Mayer

Meg and Brian Fuller and Todd Nuelle

2018 Spring Conference Sponsors RECEPTION SPONSOR:

GOLF SPONSOR: Amsted Rail Tom Canter, “And we are off, like a herd of turtles!”

Martin Lew

BREAK SPONSOR: Appalachian Railcar Services, LLC WI-FI TECHNOLOGY SPONSOR: Commtrex PACKET INSERT SPONSOR: Eco Solutions BANNER SPONSOR: Argus Media

COAL TRANSPORTER | 9

BLOCKCHAIN Innovations / Blockchain

By Jason Lewis, of Counsel, Partner, and Michael Loesch, Partner, Winston & Strawn, LLP

hese days, it’s hard to avoid the hype surrounding blockchain technology. One fintech executive has likened blockchain technology to “e-mail for money.”1 The World Economic Forum stated as early as 2015 that “[t]he blockchain protocol threatens to disintermediate almost every process in financial services.”2 Technology analyst International Data Corporation has predicted that over the period from 2016 through 2021, blockchain spending will grow at a five-year compound annual growth rate of 81.2%, with total spending in 2021 of $9.7 billion3. Yet, as the New York Times Magazine reported earlier this year, “the hype cycles are so accelerated that billions of dollarsare chasing a technology that almost no one outside the cryptocommunity understands, much less uses.”4 Given the potential impact of these new technologies and the market’s enthusiasm for them, this article attempts to help newcomers with the challenge of separating the facts about blockchain technology from the fiction. We first explain some blockchain basics: what blockchain technology is; how it works; and how it relates to concepts like smart contracts, tokens and Initial Coin Offerings. Next, we describe the potential advantages and disadvantages of using blockchains in business processes. Part 2 of this article, which will appear in a future issue, will focus on applications of this technology to commodities, shipping and logistics.

10 | COAL TRANSPORTER

101

BLOCKCHAIN BASICS

Distributed Ledger Technology

Blockchains are a form of “distributed ledger technology,” often abbreviated as “DLT.” A distributed ledger is a secure database in a decentralized system that contains records of transactions among system participants. In its purest form, all participants have a copy of the ledger, and all records in the ledger are immutable, but no central authority (like a bank determining whether a check has bounced) ensures the accuracy of the database. Instead, the system uses cryptography – the art and science of secure communications – to maintain the security of the ledger. To some, this use of cryptography portends the elimination of centralized intermediaries like financial institutions. DLT boffins often imagine a “trustless” world, where one does not need to rely on the integrity of other market participants or financial institutions in order to transact. Such a trustless world might enable a wider range of ordinary business transactions across borders. But such technologies also threaten to reshape the internet itself, returning it once again to its “egalitarian” roots.5

What are blockchains and how do they work?

Blockchains rely upon a specific set of cryptographic techniques to link transactions on the distributed ledger in a manner that provides a unique promise of security. Below, we provide a brief summary of the principal technical concepts necessary to understand the potential applications of blockchains.6 In a blockchain, each transaction on the ledger is “hashed” into a “block” that refers back to a prior block, thus forming a “chain” of sorts. “Hashing” means that a certain type of cryptographic algorithm is used to take “input” data about the transaction and generate a string of characters that has a fixed length.7 The hash functions used in blockchains have a variety of properties that makes them ideal for such use. First, these hash functions are “deterministic,” such that the same result occurs every time you put the same input through a hash function, and hashes can be calculated quickly.8 Relatedly, the process generally provides each set of inputs with its own hash, which experts refer to as “collision-resistant.” 9 Second, it is infeasible to determine the original input from the output hash, which is known as “pre-image resistance,”10 or the “hiding” property of hashes.11 Third, small

changes in the input lead to significant changes in the output hash.12 Fourth, such hash functions are “puzzle friendly.”13 Puzzle friendliness means that the best strategy to a “search puzzle” using the hash function is to try random values until happening upon the solution.14 A search puzzle requires the solver to find an input to the hash function such that, when combined with a number chosen at random from a large distribution, the input results in a hash that falls within a specified range.15 Solving this type of puzzle is the goal of cryptocurrency “mining,” discussed in further detail below. A blockchain connects blocks by employing “hash pointers.” A hash pointer is a string of data that contains both the address of the previous block16 (i.e., its location on the blockchain) and a hash of the data inside that previous block. Each block in the chain contains data pertaining to the transaction that it is recording as well as a hash pointer referring to the previous block.17 In other words, the hash of any block depends on the data from the previous block in the chain. In the event that a system participant attempts to alter data along the chain – for example, to falsify a transaction on the ledger or “double-spend” a coin – the changed data will no longer match up with the hash that already has been recorded in the subsequent block. As discussed above, an output hash is sensitive to any changes made to the input hash. Therefore, any attempt to tamper with the ledger (i.e., by changing the contents of a prior block in the chain) should be readily apparent to participants in the blockchain.18 This ability to detect foul play is fundamental to the security of blockchains, which are thus considered to be “immutable.”

Blockchains threaten to reshape the internet itself, returning it once again to its “egalitarian” roots. Additional cryptographic techniques record blocks sequentially on a distributed ledger as transactions occur. Each “node” (i.e., party on the system) uses a “digital signature” to authenticate messages between it and the other party to a transaction.19 After the parties agree to transact with their digital signatures, a new block is added to the blockchain when the remaining nodes on the system validate the hash data for the new block through a “consensus mechanism.” Two common consensus mechanisms are Proof of Work (“PoW”), which Bitcoin uses, and Proof of Stake (“PoS”), a variant of which the Etherium community has proposed to adopt in the near future. The PoW mechanism incentivizes nodes to solve a search puzzle created by the proposed addition of a new block. It does so by rewarding a node with a small amount of newly created Bitcoin (and a small transaction fee) each time: (i) that node is the first to determine a value used only once (i.e., a “nonce”) that, when combined with the hashes of the previous transactions in the chain, generates a new hash within a certain numerical range, and (ii) the other nodes on the system accept the block formed with the newly determined data.20 This process of earning Bitcoin in return for generating new blocks is

called “mining.” By recruiting a robust network of nodes to participate in the process of validating blocks, and by pitting all the nodes against each other in a race to solve these search puzzles, this mechanism guards against the risk that a bad actor can control enough votes on the system to manipulate the consensus mechanism or otherwise destroy confidence in the ledger (also known as “51% attacks”).21 Unlike PoW, PoS mechanisms select one or more validators for a new block based on the amount of a deposit that the validator agrees to forfeit if it violates certain pre-set rules.22 In other words, nodes willing to risk a greater “stake” have a greater chance of being selected to validate transactions and earn fees.23 Once a block is validated using PoS, the validator (or validators, depending on the precise PoS scheme) earns a transaction fee.24 Because all the nodes on the system do not compete to validate every block, PoS uses computing resources and electricity more efficiently,25 while potentially producing faster results.26 PoS is controversial in the cryptocommunity, however, precisely because it does not permit all nodes to compete for rewards, like Bitcoin’s PoW mechanism, and may allow the largest players to dominate a platform by posting the greatest deposits. Blockchain networks exist in two general forms: “permissionless” blockchains and “permissioned” blockchains. In permissionless blockchains like Bitcoin or Ethereum, anyone may join the network and participate in the process of block verification.27 The existence of unlimited and unknown participants in such systems requires the careful design of consensus mechanisms to validate transactions, but advocates proclaim that such systems are less fragile.28 In contrast, permissioned blockchains limit the actors that can contribute to the system, and typically require a centralized third party to serve as the gatekeeper.29 The category of permissioned blockchains includes both “private” and “consortium” blockchain networks. Private blockchain networks are established and maintained by a single enterprise, while consortium networks are created by a group of companies collectively involved in managing the system.30 Systems also may exist in the future that combine features of permissionless and permissioned blockchains. COAL TRANSPORTER | 11

Smart Contracts: Neither Smart, Nor Contracts? “Smart contracts” are related to DLT, but are not one and the same technology. The term has two different meanings, however, and often is used imprecisely. First, the term may refer to a set of computer code (sometimes called “smart computer code”) that automatically executes one or more tasks upon the satisfaction of one or more conditions.31 Computer scientist and cryptography expert Nick Szabo famously described this type of smart contract by analogy with a vending machine: when a buyer fulfills the condition by inserting a sufficient amount of coinage, the vending machine executes the condition by dispensing the requested product and, where appropriate, change.32 Developers often embed this type of smart contract within a distributed ledger, such that the distributed ledger automatically records the execution (or not) of the tasks in question.33 Second, the term smart contract also may refer to a legally enforceable contract that either contains pieces of smart computer code or is constructed entirely of such code (sometimes called 12 | COAL TRANSPORTER

a “smart legal contract”).34 It has been said that “every smart legal contract can be said to contain one or more pieces of smart contract code, but not every piece of smart contract code comprises a smart legal contract.”35 Smart legal contracts thus are similar to smart computer code, but use that code within a binding legal relationship; upon a contractual breach, the aggrieved party can resort to the legal system to enforce that relationship. Smart legal contracts may be in written form, and contain traditional contractual provisions outside of those that have been programmed in smart computer code. Different models already exist for incorporating computer code into legally binding contracts, and given the close association between smart contracts and blockchains, are expected to mature as blockchain technology proliferates.36 Critically, however, any such provisions relying on smart computer code must be susceptible to an objective determination by a computer as to whether the relevant condition or conditions have been satisfied. (Where an outside source provides the information necessary for such a determination, such source is often referred to as an “oracle.”) Like the

vending machine analogy above, a smart contract can be designed to record a financially settled option transaction on a distributed ledger, for example, if the daily settlement price of a certain futures contract on a specified exchange (in this context, the “oracle”) exceeds a certain strike price. But without some objective criteria – like the proper amount of coins to be placed in the slot – a smart contract would not have the ability to determine when a party has used “commercially reasonable efforts” to perform a contractual covenant, whether a party has negotiated an open provision “in good faith,” or whether a “material adverse effect” has occurred.37 Traditional contracts also contain “non-operational” clauses that do not necessarily document the logic of the transaction itself, but rather describe the legal relationship between the parties, such as provisions that specify the governing law or the venues in which the parties must or may bring any disputes.38 At present, therefore, it may not be accurate to call such contracts “smart,” since computer code cannot implement these provisions. But developers are working feverishly to implement this technology in an increasingly complex range of products.

Cryptocurrencies and Tokens

The blockchain world has progressed quickly, and – adding to the confusion – in many cases without a fundamental agreement on the meaning of key terms. Two of those key terms are “cryptocurrency” and “token,” both of which have recently featured prominently in the news. A cryptocurrency is “a form of digital money that is designed to be secure and, in many cases, anonymous.”39 Cryptocurrencies use blockchain technology to record the movement of currency among all system participants in a distributed ledger, and typically use software protocols that are unique to that blockchain. Notable examples include Bitcoin (built on the Bitcoin blockchain), Ether (built with the Etherium blockchain), XRP (built on the Ripple blockchain), and Litecoin (a “fork,” or variation of, the Bitcoin blockchain). Compounding the confusion, cryptocurrencies are sometimes referred to as “coins” or “altcoins.” The term “token,” on the other hand, may sometimes refer to a cryptocurrency generally, but more precise definitions of the term typically refer to programmable digital assets that confer actual property rights outside the blockchain or access to a function within a particular platform.40 Tokens are usually developed using another blockchain (i.e., what some refer to as the “native” blockchain, like Bitcoin or Etherium) to facilitate the settlement of more complex “upper-layer” transactions on the relevant platform, and employ smart contracts to implement those transactions.41 The Etherium blockchain, for example, was specifically designed to facilitate the creation of tokens and the use of smart contracts, and includes features that allow developers to create standardized tokens without recreating key pieces of computer code.42 A token thus resembles a “store specific loyalty point,”43 like frequent flier miles or “Starbucks Rewards,” that can be redeemed only from that particular vendor. By way of analogy, many have compared tokens with a ticket at a fairground – within the fairground only, the bearer can redeem the ticket for cotton candy, ride the Ferris wheel, or play a game. Consider the following examples from three disparate industries:

• Basic Attention Token (BAT) The BAT was created in 2016, using the Etherium protocol, to improve the internet advertisement industry. To accomplish this, the creators of BAT developed their own internet browser, called Brave, which has the ability to assess the time and attention that users spend viewing advertisements. On Brave, advertisers pay publishers for advertisements using BAT, with the amounts increasing based on the amount of attention that users give to an advertisement, while users are compensated with BATs for viewing those advertisements. BATs are tradable between system participants. BAT tokens are not restricted to a particular use, but the developers have suggested that publishers could allow users to redeem BATs for premium content, such as premium articles or higher quality video or audio content, that users could donate BATs to charity, or that BATs could be used in online games. The “Initial Coin Offering” (or “ICO”) of the BAT in May 2017 generated approximately $35 million, and all of the tokens for sale had been purchased within thirty seconds.44

• TenX TenX is a cryptocurrency payment platform that seeks to enable people to use cryptocurrencies in their everyday lives. TenX issues debit cards to users or allows users to fund a mobile “wallet” with Bitcoin, Ether, Litecoin or (in time) others. When a user enters into a transaction with the debit card or mobile wallet, the TenX network rewards the user with 0.1% of the transaction value in the form of PAY tokens; on a monthly basis, 0.5% of the aggregate transaction value on the TenX network is distributed to holders of PAY tokens in the form of Ether. TenX also was developed using the Etherium protocol.45 In the June 2017 ICO of its PAY tokens, TenX raised $34 million in seven minutes.46

• Beercoins Beercoins may be “mined” by scanning QF, NFC or text tags (either inside a bottle cap, on a coaster, or on the check from a participating bar or restaurant); system users may transfer the tokens to other system users on the “Beerchain,” donate them to charity or redeem them through participating vendors for beer, discounts or merchandise.47 Beercoin also was developed using the Etherium blockchain.48 The Beercoin Foundation held an ICO that concluded on June 30, 2018; a second ICO is planned for September 2018.49

COAL TRANSPORTER | 13

Initial Coin Offerings

An ICO, another term that has appeared in the news of late, is a method of crowdfunding that acts like an initial public offering of stock (“IPO”). In an ICO, the creator of a blockchain-based platform offers a token to the public for sale, usually within a specified period of time. Like the examples above, the tokens typically are for use on the platform that is attempting to raise capital, and typically are tradable, which allows buyers to take advantage of rising prices or causes them to incur losses when prices move against them. An offeror of tokens usually details its proposed system in a “whitepaper” that it posts to its website for public review. These whitepapers set forth the business case in favor of the token, and explain how the relevant platform works, but can vary substantially in quality and transparency. Once the token sale has occurred, the proceeds of the ICO compensate the founders, much like an IPO, but also raise money for the development or expansion of the relevant platform. This atmosphere is ripe for predatory practices, since in many cases that platform has not yet been developed, and is simply a concept described at the time of the ICO in a whitepaper. Indeed, a host of legal issues have arisen as regulators around the world have considered the possibility for exploitative or fraudulent behavior in connection with ICOs and cryptocurrencies. The U.S. Securities and Exchange Commission in particular has taken an active role in reviewing proposed ICOs, and has determined that ICOs may constitute offerings of securities subject to its jurisdiction.50 Similarly, the U.S. Commodity Futures Trading Commission has determined that Bitcoin and other virtual currencies are commodities, that derivative contracts with respect to such commodities are subject to its jurisdiction, and that trading of Bitcoin in interstate commerce is subject to laws prohibiting fraud and manipulation.51 We expect these regulators and others to remain active as blockchain technology continues to evolve. 14 | COAL TRANSPORTER

Potential Benefits and Challenges

Blockchain advocates point to a wide range of potential benefits from using the technology. Chief among those benefits are the following: • Transactional efficiency. While it may not be the case today, enthusiasts can foresee a time when blockchain technology offers superior processing speeds and lower transaction costs. Blockchains also could reduce transactional friction from centralized authorities or other intermediaries like financial institutions; for example, by automating transactions through smart contracts, or relieving the need for duplicative data entry or records among participants in a supply chain. • Transactional transparency and reliability. As discussed above, the distributed ledger is generally open to all participants, and records are irreversible and immutable; therefore, all participants should theoretically have a high degree of trust in the integrity of the ledger. Such enhanced transparency and reliability reduces the need for a commercial relationship between a buyer and seller, and may enable a wide range of “trustless” business transactions worldwide that do not require the participation of central authorities. These features also provide enhanced protection against cybercrime and fraud. In some cases, blockchains may even be designed to help users authenticate the identities of their counterparties.

COAL TRANSPORTER | 15

• Audit trail. Because the distributed ledger is generally open to all participants, counterparties should have ready access to a full record of their transactions, thus enabling faster and more efficient reconciliation of settlement discrepancies and other disputes. Blockchains could revolutionize accounting, financial auditing or regulatory reporting as well. • New Business Models. These new technologies and the ongoing flood of investment will no doubt result in new business models. We have perhaps only begun to see the benefits of blockchains. On the other hand, several factors – in many cases, the same factors that confer advantages on blockchain-based systems – may challenge the widespread application of blockchains: • Slowness. Blockchain technology is currently not as fast as existing settlement methods like credit cards. Nonetheless, it may not be appropriate to compare credit card processing and block validations, since the processing of a credit card transaction does not result in the immediate payment of money, but the validation of a transaction on the blockchain represents the actual movement of cryptocurrency or tokens. Improvement in the speed of blockchain formation also is likely in the future. •

Security Issues. Like other information technology systems, blockchains can present attractive targets for hackers. In particular, blockchain-based platforms must be designed thoughtfully to prevent hackers from launching “51% attacks” or exploiting other vulnerabilities.

• Resource scarcity. Blockchains may result in the inefficient allocation of computing resources or electricity. The nature of a distributed ledger necessarily implies that every “node” on the applicable system will store the same information, which will increase in size as the ledger grows with new blocks. In fact, such redundancy is a security feature of distributed ledgers. But such redundancy could use an inordinate amount of data storage. Validation processes based on consensus models also require participation from multiple nodes in order to ensure the security of those processes – especially in PoW systems, as discussed above. PoW systems provide incentives to deploy ever greater computing power in a ceaseless arms race among nodes, and may divert resources or electricity from more socially beneficial uses.

These new technologies will no doubt result in new business models. We have perhaps only begun to see the benefits of blockchains. • Lack of standardization. Given the bloom of new blockchain applications across a wide range of industries, it is still too early to determine whether a single dominant platform will prevail in any industry, or whether multiple competing platforms will emerge. Potential users must therefore carefully evaluate the risks of early adoption. In the event that a user throws its weight behind a single platform, it is likely not clear whether that platform’s blockchain will ever be “interoperable” with others. For example, users are left to wonder what will happen if they wish to novate transactions in the future to a counterparty that has not yet adopted that particular platform. Users also need to ask what happens to pending transactions on the chosen platform if that platform fails. This lack of standardization among competing platforms may keep users on the sidelines, and has attracted attention at the highest levels of government. • Anonymity. Most blockchains are “pseudonymous” rather than anonymous, meaning that participants can identify other participants only by their “public keys,” which do not reveal their underlying identities. Such use of pseudonyms is consistent with a marketplace where collective trust in cryptography supplants personal relationships. But certain legal regimes include “know your customer” requirements to prevent money laundering and other criminal activity, and even a relative degree of anonymity may preclude compliance with these requirements. A permissioned blockchain might solve this problem, such that a central administrator can facilitate compliance with these obligations, but permissioned blockchains may confer only some of the benefits described above if they merely replace one set of intermediaries with another.

16 | COAL TRANSPORTER

• Lack of Confidentiality. As discussed above, a distributed ledger subject to review by all “nodes” can provide a powerful substitute for trust between market participants. But some transactional environments may require confidential treatment of contract terms or even the existence of a transaction. Unlike the problem with relative anonymity, described above, pseudonyms may not provide adequate confidentiality in these situations. For example, if a participant is able to correlate a transaction on the blockchain with its counterparty’s pseudonym, it may be able to discern the identity of that counterparty. Like the problem with relative anonymity, however, a permissioned blockchain may address this issue. • Regulatory oversight. Blockchains, cryptocurrencies and ICOs are potentially subject to regulation by a wide range of governmental agencies internationally, and pose significant regulatory challenges with respect to securities

and commodities laws, trade sanctions, and banking laws, among others. The manner in which regulators deal with these issues could impact the development of blockchain technology and its application in many different contexts. • Pre-existing solutions. In some cases, blockchain technology simply may be unnecessary, as existing, proven technology could accomplish a similar result. Therefore, despite the market’s ebullience, blockchain technology is, by any assessment, in the early stages of delivering upon its promises. As the applications of blockchain technology continue to evolve, it will likely become increasingly clearer to developers, users, and investors as to when a blockchain-based solution is best. In the meantime, much like the early days of the internet, we recommend that readers view the dizzying array of new business opportunities with a healthy degree of skepticism. s

We hope that this brief introduction to blockchain technology has provided readers with the background to approach the topic with greater confidence. In Part 2, that will be featured in Issue I, 2019, we will review some potential applications of blockchain technology, with a focus on commodities, shipping and logistics

1. Robinson, Edward And Leising, Matthew, Blythe

Masters Tells Banks The Blockchain Changes Everything, BLOOMBERG (Aug. 21, 2015), https:// www.bloomberg.com/news/features/2015-09-01/ blythe-masters-tells-banks-the-blockchain-changeseverything. 2. Id. 3. New Spending Guide Sees Worldwide Blockchain

Spending Growing To $9.7 Billion In 2021, IDC (Jan. 24, 2018), https://www.idc.com/getdoc. jsp?containerId=prUS43526618. 4. Johnson, Steven, Beyond The Bitcoin Bubble, THE

NEW YORK TIMES Magazine (Jan. 16, 2018). 5. Johnson, supra n. 5. 6. For a more detailed and complete description of

the basic concepts, see Narayanan, Arvind et al., Bitcoin and Cryptocurrency Technologies (Princeton University Press: 2016) at 1-20. 7. What Is Hashing? Under The Hood Of Blockchain,

BLOCKGEEKS (Last Visited July 6, 2018), https:// blockgeeks.com/guides/what-is-hashing/. 8. Id. 9. Id. 10. Id. 11. Narayanan et al. at 5. 12. BLOCKGEEKS, supra n. 7. 13. Id.; Narayanan et al. at 8. 14. Narayanan et al. at 8-9. 15. Id. 16. Id. at 10. 17. Id. at 11. 18. BLOCKGEEKS, supra n. 7; Narayanan et al. at 12. 19. Narayanan et al. at 15-18. 20. Id. at 104-110. 21. See, id. at 40-50. 22. Proof Of Work Vs. Proof Of Stake: Basic Mining Guide,

BLOCKGEEKS (Last Visited July 10, 2018), https:// blockgeeks.com/guides/proof-of-work-vs-proof-of-stake/.

23. Castor, Amy, A (Short) Guide To Blockchain Consensus Pro-

tocols, COINDESK (Last Visited July 10, 2018), https://www. coindesk.com/short-guide-blockchain-consensus-protocols/. 24. Id. 25. BLOCKGEEKS supra n. 23. 26. Kimathi, Basil, Game Changer: Proof Of Stake Is Coming

Fast, CRYPTOLINE NEWS (Feb. 7, 2018), https://cryptolinenews.com/2018/02/proof-of-stake-is-coming-fast/. 27. Annamalai, Deva, Blockchain – What Is Permissioned Vs.

Permissionless?, COREDUMP (Jan. 10, 2017), https://bornonjuly4.me/2017/01/10/blockchain-what-is-permissionedvs-permissionless 28. Id. 29. Id. 30. Buterin, Vitalik, On Public And Private Blockchains,

ETHEREUM BLOG (Aug. 6, 2015), https://blog.ethereum. org/2015/08/07/on-public-and-private-blockchains/. 31. ISDA and Linklaters, Whitepaper: Smart Contracts And Dis-

tributed Ledger – A Legal Perspective (Aug. 2017), https:// www.isda.org/a/6EKDE/smart-contracts-and-distributedledger-a-legal-perspective.pdf at 5. 32. See Szabo, Nick, The Idea Of Smart Contracts, NICK

SZABO’S ESSAYS, PAPERS, AND CONCISE TUTORIALS (1997), http://www.fon.hum.uva.nl/rob/Courses/InformationInSpeech/CDROM/Literature/LOTwinterschool2006/szabo. best.vwh.net/idea.html.

41. Id.; Taché, Adam, State Of Cryptocurrencies:

Summer 2018, HACKERNOON (June 23, 2018), https://hackernoon.com/state-of-cryptocurrenciessummer-2018-932016549375. 42. See How Ethereum Works, COINDESK (Last Visited

July 10, 2018), https://www.coindesk.com/information/how-ethereum-works/. 43. Chester, Jonathan, A New Way To Raise

Money: The Initial Coin Offering, FORBES (June 12, 2017), https://www.forbes.com/sites/ jonathanchester/2017/06/12/a-new-way-to-raisemoney-the-initial-coin-offering/. 44. Keane, Jonathan, $35 Million In 30 Seconds:

Token Sale For Internet Browser Brave Sells Out, COINDESK (May 31, 2017), https://www.coindesk. com/35-million-30-seconds-token-sale-internetbrowser-brave-sells/. 45. See generally, Buchko, Steven, What Is Tenx?

Beginner’s Guide, COIN CENTRAL (Dec. 2, 2017), https://coincentral.com/tenx-beginner-guide/; What Is TenX?, WEUSECOINS (last visited July 10, 2018), https://www.weusecoins.com/what-is-tenx/. 46. Iesho, Ashour, Tenx Ico Raises $34 Million In 7

Minutes, BITCOINIST (June 24, 2017), http://bitcoinist.com/tenx-ico-raises-34-million-7-minutes/. 47. BEERCOIN, https://www.beerchain.technology/ (Last

Visited July 10, 2018).

33. ISDA and Linklaters, supra n. 32.

48. Id.

34. Id.

49. Beercoin, The Beer-Based Cryptocurrency, ICOBE-

35. Id.

NCH (Last Visited July 10, 2018), https://icobench. com/ico/beercoin.

36. Id. at 13-18. 37. See id. at 12. 38. Id. at 11. 39. What Is Cryptocurrency, How Does It Work, And Why Do

We Use It?, THE TELEGRAPH (Last Visited July 10, 2018), https://www.telegraph.co.uk/technology/0/cryptocurrency/. 40. Aziz, Coins, Tokens & Altcoins: What’s The Difference?,

MASTERTHECRYPTO (Last Visited July 10, 2018), https:// masterthecrypto.com/differences-between-cryptocurrencycoins-and-tokens/.

50. See, Clayton, Jay, Statement On Cryptocurrencies

And Initial Coin Offerings, U.S. SECURITIES AND EXCHANGE COMMISSION (Dec. 11, 2017), https:// www.sec.gov/news/public-statement/statementclayton-2017-12-11. 51. See, Bitcoin Basics, U.S. COMMODITY FU-

TURES TRADING COMMISSION, https://www. cftc.gov/sites/default/files/idc/groups/ public/%40customerprotection/documents/file/ oceo_bitcoinbasics0218.pdf.

COAL TRANSPORTER | 17

Technical / Randyâ&#x20AC;&#x2122;s Railcar 101

ALUMINUM COAL CARS More Coal with Less Car

Randall Thomure, Rail Asset Advisors, LLC

18 | COAL TRANSPORTER

oday’s coal fleets are predominately aluminum bodied, but that hasn’t always been the case. In fact, it was just about 25 years ago the industry moved from steel bodied cars to the aluminum bodied. The switch didn’t happen quickly or without several false starts. Aluminum has had a very troubled history in the rail industry that made the transition very slow. The evolution to today’s aluminum coal cars can be the subject of another article. For this article, we will focus on the basic design considerations, limitations and factors to consider. Aluminum has several advantages for coal shippers; the first is the obvious weight advantage. The other advantage is less susceptibility to the corrosive effects of sulfur in coal. On the other hand, aluminum has various challenges for the designer, builder, user, car owner and maintainer. Some of the early aluminum railcars used the same design methods as steel cars, using standard shapes and welding them together. These early aluminum railcars had many issues, not the least of which were cost, poor fatigue life and insufficiently lighter. Coal car engineers had to learn about aluminum alloys and extrusions. Then the engineers had to

learn new joining methods, starting with the elimination of welding. Aluminum is not very tolerant of welding. Aluminum alloys can lose almost 50% or more of its strength when welded. In addition to losing strength, the welded connection becomes brittle which results in poor fatigue life. This was one of the biggest problems that the engineers had to overcome. We needed to learn how to join aluminum without welding during fabrication. Aluminum can be alloyed to increase strength and durability, but the tradeoffs can make it less suitable for rail applications. For example, 7xxxx aluminum can be treated to strength levels approaching high strength steel. Unfortunately, 7xxx series aluminum is difficult to make (i.e. extrude) and has relatively poor fatigue properties – a key requirement for railcars that have a design life of 50 years. 5xxx series and 6xxx series aluminum have found to be best suited for rail car applications. Railcar engineers eventually switched to aluminum extrusions and sheets. Aluminum can be extruded into very long complex shapes, perfect for railcars. Aluminum extrusions could be optimized to add metal where needed for strength or thinned when not required. The result was a much lighter

Extruded aluminum posts, sills and top chords gives structural strength at a lower weight vs steel.

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Side Removed to show Center Sill and Stiffeners.

car, that has greater resistance to the damaging effects of coal. Top chords, side posts and side sill have benefited from improved extrusion design. Welding was eliminated by using riveted/bolted connections. The greater use of bolted/riveted connections required changes in the production line. Manufacturing needed to develop methods to match drill aluminum sheets and extrusions. It is challenging to line up multiple holes on a long top chord to side sheet plus the side posts, side sills, end slope sheets, etc. Eventually, the builders developed tooling and fixtures to streamline the production process. Although aluminum is used extensively on the coal car body, steel is still critical for several components, primarily the steel center sill. The steel center sill is in direct contact with the aluminum car body, which creates another issue, galvanic corrosion. Steel and aluminum are relatively close in the Anodic Index (Steel 0.85 v and Aluminum 0.95 v) and would not typically require much of a barrier. But given the service and the design life, an insulating material such as a thin plastic film or thick coating is typically applied where aluminum and steel are in direct contact. High strength bolts or Hucks™ can be plated to minimize the corrosion issue for the connections. The use of plating, painting and film has minimized corrosion problems on modern coal cars. One other problem for aluminum bodied coal cars – thaw sheds. Aluminum is a great conductor of heat but 20 | COAL TRANSPORTER

FCA’s Hybrid Gondola with Stainless Steel on Lower Portion of Car Body.

is very intolerant of the high temperatures in thaw sheds. In the winter, many loaders will add an antifreeze to minimize sticking or frozen cold. It is important that any antifreeze does not contain any chlorine, which will attack the aluminum. The other solution to cars that routinely go through thaw sheds is the “hybrid” cars. These cars use stainless steel on the lower portions of the car body and then aluminum side posts, top chords and upper side/end sheets. Although heavier than an all-aluminum bodied car, it is a good compromise for cars in this service. The last “challenging” area is in repair. Unlike steel coal cars that can be easily patched or spliced, aluminum needs different repair methods. Again, welding cannot be used only bolted or riveted. Top chords, side posts, side sill extrusion cannot be spliced, but must be replaced as a single piece. Side, end and slope sheets can sometime be patched or spliced, but

IN THE NEXT ISSUE:

Draft Gear and Couplers

again the repair can not be welded; bolted or riveted only. Aluminum coal car designs have evolved and are proving to be a very reliable means of transporting coal. The benefits of longer life over steel bodied coal cars, lighter weight resulting in greater payloads and larger cars have served the industry very well. Future advances in new joining techniques such as friction stir welding will lead to further weight reduction and improved service life. s Randy Thomure has worked in the rail industry for over 45+ years. He started with a Class I railroad, moved on to West Coast leasing companies to lead the mechanical operations departments, later worked for two major railcar builders leading engineering and marketing departments. He currently is the head of Rail Asset Advisors (www.railassetadvisors.com) specializing in providing mechanical expertise to car owners.

2018 O&M Conference / Review

2018 Operations and Maintenance Conference

“Music City” Nashville, Tennessee | June 11-13, 2018 By Gayle TenBrink

he NCTA Operations and Maintenance Committee held its annual conference June 11 – 13, 2018, in Nashville, Tennessee at the Vanderbilt Marriott, located across from Centennial Park’s full-scale replica of the original Parthenon in Athens. The annual Country Music Awards were wrapping up as our meetings began, providing ample preconference opportunities for some honky-tonk fun. Three days of meetings began with the ever-popular Private Car Owner Roundtable session in which Utility (voting) members gathered to hold wide ranging discussions of issues they’re seeing and share ideas on best practices. The afternoon session was opened up to all attendees and the idea sharing continued. O&M Chairman Harry Mullins (Southern Companies) has often repeated his firm belief that our industry is constantly changing, and the O&M needs to be vigilant in continuing to educate its members. The Roundtable is a prime example of that philosophy in action. Our group was given a warm Nashville welcome by native Paula (Mrs. Barry) Clark (Railroad Friction Products), whose husband “volunteered” her to this service. Her love of this vibrant city was apparent in her description of its history and attractions. And there were probably a few wet eyes when we gave Tom Canter a standing ovation in thanks for his 23 years of service to the NCTA! O&M Program Chairman Kevin Johnson (Nebraska Public Power District) put together a roster of speakers covering topics from nuts and bolts to “The Cloud.” If you think that a coal car is just a box on wheels, time to think again! Technological advances in monitoring devices, machine visioning , data analytics and reporting are changing the world of railcar maintenance in ways few would have imagined even ten years

22 | COAL TRANSPORTER

ago. Kim Bowling, Director Car Monitoring and Diagnostics at CSX Transportation, asked the question: “Machine Vision – What Can the Cameras Really See?” The answer is – quite a lot! Taking the pictures is easy, but Kim pointed out that processing the images and knowing what you’re looking at is hard. Who said that Radiologists aren’t needed in railcar maintenance? The technology side of railcar maintenance was apparent in the alphabet soup of TTCI (Transportation Technology Center Inc.), Railinc, and AAR presentations that used acronyms such as EHMS, EW, DDCT, CRB, WILD, TSWC and more. Thanks to R.B. Wiley, Ron Tsolis, and Ron Hynes respectively for guiding us through the maze! Wheels continue to be the highest cost item in maintenance budgets, and Norfolk Southern’s Scott Keegan teamed with TTCI’s Scott Cummings to bring us up to date on Phase I of a test they are conducting on the correlation of air brakes to wheel wear: more to come! But never fear, it still takes people and their know-how to keep coal trains running, and we were interested to hear updates on coupling systems (no, don’t think Tinder for railcars…) and roller bearings, as well as tips for doing a railcar inspection and using data to best plan predictive maintenance. Big thanks to all our presenters: we really appreciate the time and effort you put into this. OK, I’m going to let you in on a secret, so promise not to tell: We also have fun at these conferences! Tuesday evening we were treated to Dueling Pianos, and the music talent in Nashville provided us with duelists of the highest order. And what happens in Nashville stays in Nashville, but I’m just saying that a few men of a certain age DO know how to dance. So get your moves together and be prepared to bust ‘em out in St. Louis next June for our 2019 annual meeting. Be there! s

L-R: TOP

2ND ROW

1 O&M Executive Committee

4 John and Lisa Jennings

2 I told you this was NOT Karaoke! Dan Hart and Jonathon Marlow

5 “Sing it” Carolyn Mayer

3 Gayle TenBrink and Tom Sedarski

7 Dwight Porter, Sam Crespo, Marc Failer

3RD ROW

4TH ROW

8 Justin Goertz, Trey Wilson, Robert Justice 9 Ken and Barb Brockway and Tom Canter

12 Sharon Pogue, Lisa Vyvlecka, Colleen Zbylut

10 RB Wiley

6 The “Man in Black,” Tom Canter

13 Kimberly and Kevin Koepke 14 Tim Carr and Curtis Dubose

11 Mrs. Paula Clark welcomed us to Nashville. COAL TRANSPORTER | 23

L-R: TOP

2ND ROW

3RD ROW

15 Tod and Deanna Boothe

18 Scott Cummings and Scott Keegan

22 Tom Sedarski, Jeff Klag, Cameron Lonsdale and Shane Picklesimer

17 Whitney and Fred Schulte

19 Rodney McGee and Sam Crespo

23 Trey Wilson, Kyle Speelman, Tim Carr, and John Zoller

BOTTOM

20 “The Pips” You know who you are!

24 Martin Lew, Scott Becnel, DeWayne Bradford and Fred Schulte

16 Wayne and Cenee Precure

21 Harry Mullins 26 Tim Wacker, Jerry Solt, Terry Hicks, and Chris LeFevre

Thank you to All Our Generous Sponsors

BLACK DIAMOND

24 | COAL TRANSPORTER

GOLD Alpha Products Iljin Bearing Lexair, Inc.

25 Justin Goertz, Jonathon Marlow, Harry Mullins, and Gary Rogers

2018 O&M Conference Sponsors |

PLATINUM Appalacian Railcar Services Trinity Rail Argus Media

SILVER Amsted Rail A. Stucki Company Miner Enterprises Standard Steel

Strato Inc. Timken Transportation Services Inc.

KEEP YOUR COAL TRAIN MOVING & REDUCE COSTLY KNUCKLE FAILURE E50BEV

E - Knuckle Average fatigue life reaches more than DOUBLE the AAR M-216 requirements

StratoMAX AAR M-216 E and F knuckles averaged over One Million fatigue life cycles during testing Customer billing data and ongoing test results validate dramatic maintenance cost savings Consistent dimensions and improved surface finish ensures ease of fit and performance durability

F51AEV

F - Knuckle The ONLY*F- Knuckle to pass AAR M-216 fatigue life cycle requirement *March 2017

StratoMAX Couplers’ average fatigue life exceeds 1.5 million cycles

E - Coupler

F - Coupler

SBE60

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Technology Junction / Martin Lew

TECHNOLOGY JUNCTION

Tinder, Rail and Millennials Have A Lot More In Common Than You Would Think!

By Martin Lew, CEO of Commtrex

26 | COAL TRANSPORTER

illennials. Who are they and how do they think about the world? And why should this matter? By 2020, Millennials will comprise 50% of the entire global workforce, and 75% by 2025. Managing them effectively will ensure success in the corporate environment. “In 2005, 75 percent of our employees were baby boomers,” says Diana Sorfleet, vice president and chief human relations officer at CSX Transportation. “Now, we’re about a third Millennials, a third Gen Xers, and a third baby boomers.” Born between 1980 and 2000, Millennials are the largest generation in U.S. history. They have come of age during a time of technological change, globalization, and economic disruption that has given them a different set of behaviors and experiences than their parents. They are the first generation of digital natives, and their affinity for technology will help shape how they operate in their personal and professional lives. They are used to price comparisons, product information, and peer reviews. For the first time, technology is ubiquitous. Functioning as global citizens is becoming an important part of how society functions. In the last 5 years, 87% of Millennials took on management roles, and these types of statistics are only accelerating as time goes on. This change in the workforce comes at

a time when the railroad and fossil fuel industries are looking to make a shift towards technology. Class I executives are looking for an improved, targeted quality process as their competitive advantage, and a way to put greater focus on capital efficiency. Miners and drillers are looking to leverage data sources through data scientists, artificial intelligence strategists, and other specialists to utilize technology while improving processes and systems. So how does this apply to the rail and coal industries? Until now, these industries have suffered from a lack of resources and incentive from senior management to implement the technology that will facilitate upgrades. Professionals have been forced to accept an overall environment of disconnected data, pricing discrepancies, and an opaque market which has made their processes highly inefficient and arduous. However, Commtrex has emerged as a leading developer of automated processes by providing secure cloud-based exchange technology available 24/7. On this type of online platform, industry professionals can negotiate deals, acquire market-based data, and access stored documents. It also becomes easy to facilitate shipper connections with lessors, storage facilities, railroads and service providers – e.g., repair facilities, transloaders, etc. Negotiations and RFP’s are expedited by as much as 85%, business decisions are bolstered with market insight, and companies find themselves more efficient and at a greater competitive advantage. There will still be some who are hesitant to learn technology, believing it has no material application to their job performance. The rail and coal industries have historically been relationship-based businesses, and rail logistics or fossil fuels TH_CoalTransporter_022011:Layout 1 2/17/2011 2:40 PM Page 1

managers have not needed the support of technology to be successful in their roles. However, taking the time to learn will help create bonds with the next generation and better understand how they look at the world. Never again will we see Fuel and Fleet Manager positions as long term career jobs. These roles will be transitory positions for the next generation, and technology will be essential to ensuring accurate knowledge transfer between individuals to facilitate successful transitions. The average Millennial stays in a job position for 2 years, versus a Gen Xer’s 5 years and a Baby Boomer’s 8 years. Based on that data point alone, it is incumbent upon those currently in the railroad and coal industries to ensure that the next generation of leaders leverages technology to facilitate information flow for the managers who will be in these transitory positions. We are currently undergoing the next major Industrial Revolution, and yet there are not enough skilled resources to address the future needs of the rail and coal industries. It is more important now than ever that we recruit the right talent from this next generation to safeguard the future of our industry. s

Commtrex is the largest online, open marketplace facilitating business between Rail Shippers, Storage Facility Providers, Rail Services, and Re-sellers. Our members have over $415M in assets available, more than 180,000 storage spaces listed, and over 3,000 service locations in our Directory.

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.

Attorney Advertising

COAL TRANSPORTER | 27

Transportation Law / Katherine Waring

Could a Short Line Railroad Help Ship Coal to Asia? Rail Operations and Federal Preemption

By Katherine Waring, Slover & Loftus, LLP

28 | COAL TRANSPORTER

sia’s demand for coal is growing,1 but lack of access to ports on the west coast is hindering U.S. coal producers’ ability to compete with the rest of the world for the Asian coal market. Largely this is due to state and local opposition and permitting hurdles as evidenced by the current disputes over potential coal exports out of the Port of Oakland, CA and the Port of Longview, WA.2 Meanwhile, Wyoming and Montana sourced coal is comparatively low in sulfur, and there is an interest in using this coal among countries in Asia, and specifically Japan, which after the nuclear accident in Fukushima is relying more on coal and is constructing new coal-fired plants that will fuel additional demand.3 So, is there a way to open western ports to low-sulphur Wyoming and Montana coal? Enter the humble short line railroad, as combining rail and terminal operations could provide a way forward.

In 2012, the economics didn’t work out for the shortline RailAmerica when it looked at shipping coal from Port of Grays Harbor in Washington,4 but it may be time to reevaluate this option, as federal preemption of conflicting state and local law applies to any rail common carrier – even a new railroad. So a group of interested parties could come together to fund a railroad for the express purpose of owning and operating tracks within and connecting to a port, along with a terminal that furthers the transportation purpose.5 This will be permitted as long as the new railroad holds itself out to the public as a common carrier and will be operating over main line or excepted track.6 Additionally, the railroad that constructs the track ultimately could be different from the end operator over the track, as the short line would have the option of providing trackage rights to other rail common carriers.

If the demand for coal exports holds, the idea of using a shortline is bound to be pursued by at least one savvy developer or groups of coal producers as railroads enjoy broad federal preemption. The Surface Transportation Board (“STB” or “Board”) pursuant to the Interstate Commerce Act as amended by the ICC Termination Act of 1995 (“ICCTA”) has exclusive jurisdiction over “transportation by rail carriers” as well as “the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the tracks are located… entirely in one State.” 49 U.S.C. § 10501(b). As such, provided that the transportation at issue is by a rail common carrier over track subject to the STB’s jurisdiction, “state or local actions that have the effect of managing or governing, and not merely incidentally affecting, rail transportation are expressly or categorically preempted under § 10501(b).”7 This includes “permitting or preclearance requirements that by their nature could be used to deny or unreasonably delay a railroad the ability to conduct rail operations.”8

Notably, both rail and non-rail parties already have asserted federal preemption arguments under ICCTA in support of the Longview and Oakland coal terminals.9 However, in both instances the railroad is not the operator of the terminal, which makes the argument for federal preemption under ICCTA less straightforward.10 Significantly, the STB in a decision issued in March 2017 provided guidance regarding federal preemption for rail operations at a port. In San Pedro Peninsula Homeowner’s United Inc., John Tommy Rosas, Tribal Administrator, Tongva Ancestral Territorial Tribal Nation – Pet. for Declaratory Order, parties opposing the transportation of hazardous materials over tracks owned by the City and permitted by the Harbor Department requested that the Board issue a declaratory order “finding that the transportation of hazardous materials over the [t]rack without an updated EIR

violates the terms of the revocable permit.”11 In issuing guidance, the STB stated that because it had jurisdiction over the track and because it was being operated over by a common carrier, “state entities such as the City and the Harbor Department are preempted from imposing requirements that could be used to restrict these rail operations” and specifically “any terms in the temporary rail permit that attempt to restrict rail operations, including the transportation of hazardous materials, are preempted.”12 A cautionary note: while the STB generally supports new rail construction and must approve a project unless it is “inconsistent with the public convenience and necessity,”13 the STB still must conduct a thorough environmental review and consider comments submitted by interested parties and agencies. Additionally, prior STB decisions granting construction and operation

COAL TRANSPORTER | 29

have included numerous, and in at least one case 100, mitigation measures that must be taken by the rail party.14 Nevertheless, moving the environmental review to the federal level by having as much of the project as possible include a rail component subject to STB jurisdiction may provide more certainty as to the responsibilities and costs for shipping coal from U.S. western ports. s 1 EIA, U.S. coal exports increased by 61% in 2017 as exports to Asia more than doubled, Today in Energy (Apr. 19, 2018), https://www.eia.gov/todayinenergy/detail.php?id=35852. 2 Washington State Terminates Coal Terminal Project, Trains (Oct. 3, 2017), http://trn.trains.com/news/newswire/2017/10/03-wash-coal-terminal. 3 Haley Zaremba, One developed country is moving back to coal, Business Insider (May 10, 2018, 8:10 PM), http://www. businessinsider.com/japan-moving-back-to-coal-2018-5; 4 Company shelves Hoquiam coal-export plan, Seattle Times (Aug. 14, 2012 9:03 PM), https://www.seattletimes.com/ seattle-news/company-shelves-hoquiam-coal-export-plan/. 5 The Surface Transportation Board (“STB” or “Board”) has jurisdiction over excepted track and track subject to Board licensing (i.e. main line track) and federal preemption would apply. San Pedro Peninsula Homeowner’s United Inc., John Tommy Rosas, Tribal Administrator, Tongva Ancestral Territorial Tribal Nation – Pet. for Declaratory Order, FD 36065 (STB served Mar. 6, 2017) at 5 n.9. However, while federal preemption applies, the Board does not have jurisdiction “over

celeb r

construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks.” 49 U.S.C. § 10906. 6 The Board has jurisdiction over excepted track and track subject to Board licensing (i.e. main line track) and federal preemption would apply. San Pedro Peninsula Homeowner’s United Inc., John Tommy Rosas, Tribal Administrator, Tongva Ancestral Territorial Tribal Nation – Pet. for Declaratory Order, FD 36065 (STB served Mar. 6, 2017) at 5 n.9. However, while federal preemption applies, the Board does not have jurisdiction “over construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks.” 49 U.S.C. § 10906. Such projects may be largely exempt from both federal and state/local permitting laws. 7 Washington & Idaho Ry. – Pet. for Declaratory Order, FD 36017 (STB served Mar. 17, 2017) at 4 (internal quotations omitted). 8 Id. 9 On June 19, 2018, BNSF filed as an intervenor-plaintiff in support of the Millennium Bulk Terminal project in Longview, Washington, asserting federal preemption under ICCTA and alleging “Defendants’ actions and inactions with respect to the Terminal have the effect of managing or governing rail transportation, including BNSF rail operations and Lighthouse’s subsidiaries’ request for BNSF’s common carrier service.” BNSF’s Complaint in Intervention at 20 ¶ 93, Light house Resources Inc. v. Inslee (W.D. Wash. June 19, 2018) (No. 3:18-cv-05005). Similarly, the Oakland Bulk & Oversized Terminal LLC (“OBOT”) raised the issue of federal preemption as it plans to establish the Oakland Global Rail Enterprise, LLC (“OGRE”) as a common carrier to get the coal to the terminal, but this appears to be separate from the construction and operation of the terminal and the court ultimately declined to

address preemption as OBOT won its breach of contract claim. Oakland Bulk & Oversized Terminal, LLC v. City of Oakland, No. 3:16-cv-07014, at *7-8, *37 (N.D. Cal May 15, 2018); Oakland Global Rail Enterprise – Auth. to Operate a Rail Line in Oakland, CA – Pet. for Exemption from 49 U.S.C. § 10901, STB Docket No. FD 36168. 10 “STB decisions demonstrate that where the railroad maintains the appropriate control over the transload facility, the STB exercises its exclusive jurisdiction and federal preemption applies.” Previously, “the STB [has] exercised jurisdiction where 1) the railroad owned the transload facility and built it with its own funds; (2) the railroad paid the transload operator a fee, rather than the operator paying the railroad a fee; (3) the railroad held itself out as offering the transload services as part of its common carrier service; and (4) the transload operator had no role in setting, *75 invoicing or collecting the transload fee.” New York & Atl. Ry. Co. v. Surface Transp. Bd., 635 F.3d 66, 74–75 (2d Cir. 2011). 11 Id., FD 36065 (STB served Mar. 6, 2017) at 3. 12 Id. at 5. 13 United States Dep’t of Energy – Rail Constr. & Operation – Caliente Rail Line in Lincoln, Nye, & Esmeralda Cntys., NV, FD 35106 (STB served Apr. 11, 2008) (Notice of Constr. & Operation Application & Adoption of Procedural Schedule) (Section 10901 requires the Board to grant a construction application unless the Board finds that the proposal is inconsistent with the public convenience and necessity.”) (emphasis added). 14 Alaska Survival v. Surface Transp. Bd., 705 F.3d 1073, 1077 (9th Cir. 2013) (“STB… imposed on ARRC the one hundred mitigation measures recommended by OEA to address the project's adverse impacts on surface waters, wetlands, fisheries, and recreational trail access.”).

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. 30 | COAL TRANSPORTER

Western Fuels

Real-Time Alerts; Dropping Demurrage Fees

Company Background Western Fuels is a not-for-profit cooperative that supplies electric utilities throughout the Great Plains, Rocky coal and transportation services to consumer-owned Mountain, and Southwest regions of the United States. Their membership base is made up of rural electric generation and transmission cooperatives, municipal utilities, and other public power entities and their services include coal mining, coal procurement, and transportation management. During 2013, Western Fuels was responsible for the production and/or procurement and delivery of approximately 17 million tons of coal on behalf of its members.

CHALLENGES Prior to using Lat-Lon, Western Fuels relied on Car Location Messaging (CLM), a type of data service used by the railroad industry to track the movements of railcars. They found that the CLM data was not always accurate, so they sought out a new solution. Another challenge they faced was being able to cut down on dwell time and unload their shipments at a faster rate. If a shipment was waiting just one minute past the allotted time, they would get charged a very high demurrage fee.

THE SOLUTION Western Fuels has been a Lat-Lon customer for one year and beginning with six Solar Tracking Units (STU’s) to monitor their 1500 railcars. While deployed on railcars, STUs report as frequently as every 10 minutes and collect information such as speed, course, exact location and coordinates. This information, along with maps, reports, and graphs, can be found in Lat-Lon’s web reporting system. Geo-fencing and tripwire capabilities create virtual boundaries around specific location and allow Western Fuels to run reports on units inside or outside of the geo-fences, or when they cross tripwires. In an effort to cut the demurrage fees they are faced with, Western Fuels utilizes Lat-Lon’s web reporting system to setup virtual tripwires. When a shipment crosses the tripwire, a message is sent in real-time to alert the plant that it will be arriving soon. This allows them to prepare to unload and avoid the costly fees. Real-time monitoring grants visibility into total trip time for each shipment, which allows Western Fuels to pinpoint inefficiencies in the operations.

RESULTS One plant heavily emphasized demurrage fees. Through management efforts, heightened focus, and Lat-Lon data, demurrage fees dropped 90%.

Find out how you can improve the visibility and efficiency of your fleet, contact us today. 877-300-6566

sales@lat-lon.com www.lat-lon.com

NCTA WELCOMES ITS NEWEST MEMBER!

he board of directors of the National Coal Transportation Association is pleased to announce that the application for membership in NCTA of the following coal industry participant was approved. They join NCTA’s existing member companies working every day through the NCTA to foster the cooperation needed to resolve issues faced by coal consumers, coal producers, transporters, rail equipment manufacturers, and services companies.

BENEFITS OF MEMBERSHIP • 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: movecoal.org/index.php/membership/current-members

U PG R ADED AND POSI TIO NE D TO MEET WORLD DEMAND F O R CO A L

To get specifications and learn more, contact Lorenzo Jolley at Lorenzo_Jolley@csx.com

As the largest coal transporter east of the Mississippi River, CSX has dedicated resources to enhancing coal facilities, optimizing processes and investing in infrastructure and equipment to ensure the best customer experience. CSX coal terminals support coal and iron ore movements on and off the international and domestic waterway systems, with access to 70+ ports.

Curtis Bay Piers Baltimore, MD

cxm263532_CoalAd_7.125x4.75_rSg2.indd 1 32 | COAL TRANSPORTER

TTI Maysville, KY

Toledo Docks Toledo, OH

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TreadGuard® HiCap™ Brake Shoes covers even more ground... NEW TreadGuard HiCap Features: - Performance Approved to the new AAR Specification M-997 Brake Shoe High Friction Tread Conditioning-High Capacity - Lower Wheel Operating Temperature offering a “cooler” operating brake - “Fade Resistant” for Heavy Grade Operation - Higher Capacity - Tons per Operative Brake

Traditional TreadGuard Features: - Extended Wheel Life through continuous “cleaning” of the wheel tread - Reduces High Impact Readings by removing minor tread defects before they become condemnable defects - Reduces Wheel Set Inventory - fewer wheels removed for tread related defects - Reduces Out of Service Time for premature wheel removals - Longer Shoe Life

Railroad Friction Products Corporation PO Box 1349 Laurinburg, North Carolina, USA 28353 (910) 844-9700

ISO 9001-2008 AAR M-1003 cobrabrakeshoes@rfpc.com www.rfpc.com

COBRA® and TreadGuard® are registered trademarks of Railroad Friction Products Coporation. HiCap™ is a trademark of Railroad Friction Products Corporation.

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. 34 | 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.

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.

Communications

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

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

The annual dues for membership in NCTA are $1,850 for Utility/Coal Producer 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 | 35

Technology / ITC Wyoming

WYOMING

INTEGRATED TEST CENTER LAUNCHES ONTO INTERNATIONAL STAGE

36 | COAL TRANSPORTER

Innovative Public-Private Partnership Testing Facility Dedicated By Jason Begger, Executive Director Wyoming Infrastructure Authority

n area that has long been the center of coal development in the United States has taken the next step in moving towards a new era of energy development. Concerns over how to meet an ever-rising global energy demand coupled with interests in controlling carbon emissions demands innovative solutions that will shape energy development for generations to come. One of just a handful of facilities in the world and only the second in the United States, the Wyoming Integrated Test Center (ITC) is taking a major step forward in driving the future of global energy development. Despite the growing influx of alternative forms of energy, coal is still the bedrock of US and global energy production. Home to massive reserves of some of the cleanest burning coal in the world, the Powder River Basin in eastern Wyoming produces more than 300 million tons of coal a year. The U.S. Department of Energy (DOE) predicts that coal will continue to account for the largest share of fuel for electricity production in the United States, with growing world economies including India and China continuing to favor coal as well. The future of energy will include coal and there is no better place to shape its future than the heart of coal country in Wyoming. What began as merely an ambitious idea, then given legs by the vision of Wyoming Governor Matt Mead and funding from the Wyoming State Legislature, is now coming to fruition in the form of the Wyoming ITC. The facility was opened and dedicated this spring in an unprecedented display of the effectiveness of a private-public partnership. The Wyoming State Legislature approved $15 million in funding for the design, construction and operation of the ITC in 2015. An additional $5 million commitment from the private industry was required under the appropriation, which has since been secured from the Tri-State Generation and Transmission Association in addition to $1 million from the National Rural Electric Cooperative Association. Along with hosting the ITC at their Dry Fork Station, Basin Electric Power Cooperative provided a number of additional services and technical expertise. What is demonstrated is a unified private-public partnership that wants to achieve lasting change by providing a foundation to study the capture, utilization and management of carbon emissions. Solutions are not going to come easy, but providing the grounds for innovation is the first step in ushering in a new age of low-carbon energy.

Wyoming ITC Officially Dedicated

May 16th, 2018 marked the official completion of construction and dedication of the Wyoming ITC. Over 100 people turned out to witness the unveiling of the pioneering facility and hear remarks from project partners and tenants. Governor Mead was joined by Chief Executive Officer of Basin Electric Power Cooperative Paul Sukut, Chairman of the Board for Tri-State Generation & Transmission Association COAL TRANSPORTER | 37

Rick Gordon, Senior Vice-President of Business and Technology Strategies for the National Rural Electric Cooperative Association Jim Spiers, Director of the Ministry of The Environment Government of Japan - Climate Change Projects Office, Climate Change Policy Division, Global Environment Bureau Yoshihiro Mizutani, President of the Japan Coal Energy Center Osamu Tsukamoto, and Senior Director of the NRG COSIA Carbon XPRIZE Marcius Extavour at the dedication ceremony. Each made remarks on the importance of the Wyoming ITC in advancing gamechanging energy technologies. “The opening of the ITC shows Wyoming’s commitment to discovering and developing economically feasible uses for CO2,” said Governor Mead. “It shows Wyoming’s leadership in advancing coal technologies. The XPRIZE and Kawasaki Heavy Industries bring knowledge, resources and innovation, and we look forward to their work at the facility. I thank and congratulate all who made the ITC possible – the Wyoming Legislature, Basin Electric Power Cooperative, Tri-State Generation and Transmission Association, the National Rural Electric Cooperative Association, and many others.” “This is about making coal viable for America,” says Basin Electric CEO and General Manager Paul Sukut. “More than ever, in our time, this is one of the most important projects for America.” The atmosphere at the dedication was one of optimism for good reason. The ITC offers an unparalleled ability to bridge to gap between lab and plant, offering real world testing at a functioning coal-fired power plant. Research at the center will help foster development of commercial carbon capture, utilization and sequestration while ensuring the viability of coal into the future.

Testing at the ITC

Among the many guests at the ITC Dedication, perhaps the most anticipated were representatives from the five teams that have advanced to the final round of the NRG COSIA Carbon XPRIZE competition. Down from 27 teams, the five remaining teams competing for the final prize will be completing their research at Dry Fork Station. “We are excited to be moving to the next phase of the competition and to get the finalist teams out to the ITC,”

38 | COAL TRANSPORTER

Wyoming Governor Matt Mead (left) with teams competing for the NRG COSIA Carbon XPRIZE at the Wyoming ITC Dedication.

From left to right, President of the Japan Coal Energy Center Osamu Tsukamoto, Chairman of the Board for Tri-State Generation & Transmission Association Rick Gordon, Chief Executive Officer of Basin Electric Power Cooperative Paul Sukut, Wyoming Governor Matt Mead, Senior Director of the NRG COSIA Carbon XPRIZE Marcius Extavour, XPRIZE Board of Trustees Member Lee Stein, Senior Vice-President of Business and Technology Strategies for the National Rural Electric Cooperative Association Jim Spiers & and Director of the Ministry of The Environment Government of Japan - Climate Change Projects Office, Climate Change Policy Division, Global Environment Bureau Yoshihiro Mizutani. said Jason Begger, Executive Director of the Wyoming Infrastructure Authority (WIA), the managing entity for the ITC. “The work that the teams competing in the NRG COSIA Carbon XPRIZE are doing is invaluable as we continue to move the needle forward on advanced carbon technologies and find real-world solutions to capturing carbon emissions.” The five teams that will be testing at the ITC hail from India, China, Scotland, Canada and the United States.

Teams are: • Breathe (Bangalore, India) – Led by Dr. Sebastian Peter, the team is producing methanol, a common fuel and petrochemical feedstock, using a novel catalyst. • C4X (Suzhou, China) – Led by Dr. Wayne Song and Dr. Yuehui Li, the team is producing chemicals and bio-composite foamed plastics.

Miles ahead In a “what have you done for me lately” world, being a century-old railcar manufacturer isn’t enough. And we know that our next century will require a focus not on quantity, but on quality: Quality of product, of service, of relationships, and most of all, quality of people. Today, our leadership is about investment and commitment. We are all-in. And that is reflected at each FreightCar America facility where our skilled craftspeople turn steel into commerce, blending thousands of years of collective expertise with state-of-the-art automated welding systems and modern robotics. With our 3.2 million square foot American footprint, nobody puts more heart into each railcar. At FreightCar America, the next century of our business is built on the quality of our relationships, putting our customers miles ahead.

You’re miles ahead with FreightCar America. freightcaramerica.com

• Carbon Capture Machine (Aberdeen, Scotland) – Led by Dr. Mohammed Imbabi, the team is producing solid carbonates with applications to building materials. • CarbonCure (Dartmouth, Canada) – Led by Jennifer Wagner, the team is producing stronger, greener concrete. • Carbon Upcycling UCLA (Los Angeles, CA, USA) – Led by Dr. Gaurav Sant, the team is producing building materials that absorb CO2 during the production process to replace concrete.

International Collaboration

Accompanying the five teams at the Wyoming ITC will be Kawasaki Heavy Industries, a partner with the Japan Coal Energy Center (JCOAL). Kawasaki Heavy Industries will be testing their solid sorbent capture technology. The Wyoming ITC provides an ideal place to research and test their new technologies. JCOAL operates under the supervision of the Ministry of Economy, Trade and Industry of Japan and is supported by more than 120-member coal-related businesses, including Kawasaki Heavy Industries, Mitsubishi Hitachi Power Systems, Nippon Steel and Toshiba. The organization works to promote overall coal activities, from coal mining to the field of coal utilization, toward a stable energy supply, sustainable economic

40 | COAL TRANSPORTER

growth and the reduction of the global environment emissions. The State of Wyoming and JCOAL have been working together since 2016, when Governor Mead and Osamu Tsukamoto, President of JCOAL, signed a Memorandum of Understanding (MOU) committing to cooperation in coal research and development of technologies and coal trade. Japan is committed to using coal to meet their country’s long-term energy needs and has been a strong partner with Wyoming in their collective efforts to find innovative and economical uses for our mineral resources through the development of carbon capture, utilization, and sequestration (CCUS). The technology developed at the ITC will have a positive impact on the global effort to advance carbon management technologies.

National Carbon Capture Center Partnership Earlier this year, the state of Wyoming took another important step in bringing innovative carbon capture technologies to commercial reality, partnering with the U.S. Department of Energy’s (DOE) National Carbon Capture Center (NCCC). Created by the DOE in 2009, the NCCC has logged more than 100,000 hours of technology testing for innovators in the carbon capture

sector. The Wilsonville, Alabama located facility was built at the site of the Power Systems Development Facility and has become known for its international efforts to close the gap between laboratory research and effective demonstrations. By focusing on promising carbon capture technologies for both natural gas and coal power generation, the NCCC has already cut the cost of carbon capture techniques by a third with the promise of greater future cuts. The alliance between the two carbon capture centers, the NCCC and the Wyoming ITC, offers a mutually beneficial exchange of techniques and ideas. The NCCC is a hugely valuable resource, an international leader in carbon related technologies and by partnering with them the Wyoming ITC will enjoy the ability to utilize technical guidance and cost-sharing. This organizational connection widens the scope of capability for carbon capture here in the US and increases international relevance, helping to make innovative carbon capture technologies a commercial reality. The first tenants of the Wyoming ITC are scheduled to being testing at the facility in early 2019. For more information on the Wyoming ITC, visit www.wyomingitc.org. s

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Reflections / Dennis Wanless

DENNIS WANLESS A Passionate Life By Mark and Merrillee Ourada

Proud “Papa” with the apples of his eye – his two granddaughters. 42 | COAL TRANSPORTER

early everyone who has the good fortune of meeting Dennis Wanless describes him similarly: He is the quintessential ‘likeable guy’. My experience was no different; as I liked Dennis from the moment we first spoke on the phone to arrange the in-person interview for this newsletter “Reflections” article. We live about an hour apart, so we decided to meet near the mid-point. When he asked about the meeting time and I suggested 8:30am, he responded, “How about 9:00? Now that I am retired, I don’t do meetings that early anymore!” I got a good laugh at that…a laugh that portended many more to follow when we met in person. Dennis Wanless truly is an easy person to like with his warm, comfortable and self-deprecating demeanor. His first comment, and one he would return to repeatedly, was that “it was always about the people I worked with; that’s really the essence of this whole [career] thing.” Just that one statement immediately tells you a lot about his character. Born in 1944, Dennis grew up on the Rosebud Reservation near Pierre, South Dakota. Most people didn’t stick around the reservation after high school because there were few opportunities there to make a living. So, after graduation, he left too; he joined the army and is deservedly proud of the fact that he served our country in that capacity! After his military service ended, Dennis travelled to Minnesota to visit his mother whom he hadn’t seen in five years. And then, since his family’s dairy farm was near Fargo, ND, he decided to go there to look for a car to buy. It was this decision that precipitated a chance encounter with an influential individual who opened the door for him to join Texaco’s dealer-training program. Texaco, impressed with the job he was doing teaching mechanics, not only encouraged him to go to college, but also added their financial assistance to the funds he received from the GI Bill to make it possible for him to attend Moorhead State University and earn a Bachelors’ degree in Business. Thus, it was that this single decision and a chance encounter launched Dennis Wanless into his multi-decade career, although it wasn’t apparent to him at the time. It was his job at Texaco that brought him to Minneapolis. There he became shop foreman for the upper Midwest – in charge of trucks, heavy equipment,

Dennis with Coal Scraper. transports and aviation equipment – and then superintendent until Texaco left the Midwest market during the energy crisis of the 1970’s. Dennis passed on a move to Chicago at this juncture because his wife had a good job as a nurse in Minnesota, and both of them wanted to raise their young son in a more rural community that was close to each other’s parents. This precipitated a change of career for Dennis and landed him at the State of Minnesota Department of Weights and Measures as an Inspector for five years. Feeling that work in state government was not ‘his calling’, to be polite, Dennis says that, when the opportunity to go to work for Northern States Power (NSP) opened up for him, he readily took it. At that time, NSP didn’t have anyone calling on the power plants and mines to ensure that the quality and quantity of fuel required was delivered on time, and NSP (now known as Xcel Energy) had numerous power plants intended to burn coal, both currently in service and in the process of being built. While attending an NCTA O&M Meeting in 1985, Dennis had already heard about air-pneumatic train cars when a senior vice -president reported significant safety concerns due to numerous accidents that occurred during unloading. Thus, when Dennis leased new, rapid-discharge cars, the ‘show and tell’ for the senior staff went very well! After this demonstration NSP got into the car-building business (1988), expanding their fleet to serve their coal plants, starting with four-car sets then expanding out from there.

Executive Committee members Dennis Wanless and Tom Sedarski after the conclusion of the annual Round Table, 2013. COAL TRANSPORTER | 43

Reflections / Dennis Wanless continued

Dennis and his friends Dwight Porter and Gayle TenBrink.

44 | COAL TRANSPORTER

Dennis became the go-to-guy for the building and purchasing of the new fleet, which previously had all been steel cars. It was just during this time that Dennis became a member of the Board on O&M. He commented that it was a great resource to have O&M where ‘all of us’ could meet and have conference calls with contractors and vendors, and work on the issues all of us were facing. “Oh we had lots and lots of meetings!”, Dennis laughed. With the new larger cars, which were now moving to aluminum construction, more issues arose. One example was that all the coal plants were constructed to receive the older, smaller cars hauling 263,000 lbs. gross weight on rail, not the new larger 286,000 lbs. cars. And, of course, the existing plants were not equipped for these new cars. Or, as Dennis commented, “the math didn’t work”; these were all the kinds of things that were coming on board, and all of us had to change and re-work the coal yards and re-work everything!” He cited, as one of the many examples, that they currently conveyed coal at 1,500 tons an hour and that the higher-capacity cars now jumped the volume to 4,000 tons an hour. With lower 8000-BTU western coal, the hoppers designed to run for 24 hours now had to completely change. “As soon as we went west and started using low-Sulphur coal, it was a whole new ball game…totally different!”

“When we blew the crusher building up at Sherco everybody said, ‘What happened, how did that happen? We’ve burning coal since 1903 and never had an explosion?’ What’s going on?” So now the industry had another significant new issue to deal with. As a result, many new studies were undertaken to learn how to handle this new type of coal. “Of course, I was all part of this. This was an absolutely fantastic career! We were growing and building and we couldn’t run hard enough, fast enough.” It was clear to me at this point, and at many points during our conversation, how much Dennis enjoyed his career. And, even though very difficult at times, how much he reveled in the changes and challenges that he, and many others, were faced with day after day. I found it quite interesting to hear that, while dealing with car issues did take a great deal of Dennis’s time, it amounted to only about half his total work load! The other fifty-percent was taken up dealing with the coal mines and coal yards. Dennis was “right in the middle of all of it” when it came to dealing with the coal-dust issues of western coal – with all the new problems surrounding surfactants and dust treatments, etc. Another first in Dennis’s career was dealing with the first contracts that used ‘mutual verification’, where the utility attended quarterly inspections of equipment, i.e., belt scales, coal samplers.

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Dennis convinced management to bring in things such as new belts, etc. and test them at the Sherco plant in Minnesota. Ramsey Technology brought in people from all over the world to demonstrate this new equipment. Dennis found this time to be so incredibly interesting. He referred to NSP as “a bunch of old farm boys who went to engineering school and happened to run a power company. It really was a great place to work from that point of view because they always wanted their company to be a leader.” These were interesting times for the industry and for Dennis. He clearly enjoyed working with the mines and railroads, figuring out the new cars and the new dumping facilities. The coal yards had to be upgraded as well because, as the plants got larger, all their systems had to be upgraded to increase the speed of unloading cars. Dennis facilitated meetings each month, along with a call EVERY morning to go over their unloading process and “every operational issue there was, including safety, because we wanted those trains in and out the door in 4 ½ hours at Sherco. Prior to the upgrading of the coal yards, many of our plants took several days to unload a coal train. Along with this push to increase speed, came concerns regarding safety. “My boss came to me and said that we needed to do something about safety. My response was to tell him, ‘well look at that crap you got running out there. It’s all junk. We’re 15 years behind in technology!” Dennis believed that they were their own worst enemy because, no matter what, even with bad old equipment, they always got the job done – with the result that the procurement of new equipment was never prioritized. But, in the end once again, “safety drove the bus to get us better equipment”. So now, again, Dennis was entrusted with a new directive and responsibility – that of buying new equipment for all the power plants. He tells how, “in just four years, we replaced every single piece of mobile equipment we had in the NSP coal yards and after the merger, across the entire Xcel system!” Dennis was astounded learning, when he first went to work for NSP, that they had no fleet price for trucks and equipment. But then he realized that when you weren’t buying anything, you really didn’t need one. Caterpillar was the only manufacturer of coal scrapers in the world, so NSP had them custom-build coal scrapers to configure them specifically to handle the density and weight of coal. It was around this time that Caterpillar did a survey of high school students and found that, as they rated jobs, Heavy Equipment Operator came in at the very bottom of the list. This precipitated a significant upgrade in heavy equipment design to help make the career more enticing to the young people just coming into the workforce. The first change was to move the cab forward and to use more glass, so the operator could see more clearly and be more comfortable. One of the other first things Dennis did was to put air conditioning, heaters, and radios in the cabs. After that, everything evolved to using a joystick-like operating mechanism to mimic the modern game technology this younger generation was already very familiar and comfortable with. This made it a whole new ball game because, now, the new dynamic made the job of being a Heavy Equipment Operator actually fun! C

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5:39

Reflections / Dennis Wanless continued Another interesting, though difficult challenge, Dennis had to navigate was the impact that the Japanese tsunami had when it hit in 2011. This impact was enormous because Japan was where all the tires for mining equipment were being made! He relates how, during this ‘time-out’, at the mines they were literally digging up tires from the pit, washing them, and then putting them back into service because they couldn’t buy even a single tire! Dennis says that, although many of the things he was involved with sound completely unbelievable, they are, in fact, true; this multitude of compounded challenges actually were part of his storied career and were just some of the things they had to deal with when it came to equipment. And he reiterated that, while all this time they were acquiring and/or upgrading their mobile heavy equipment, they were also continuing with the buying and upgrading of their train cars.

Dennis’ goal was to move the O&M Group from a reactive maintenance program to a predictive program utilizing new technology Dennis certainly had a wide variety of experiences, jobs and responsibilities during his tenure with Northern States Power/Xcel Energy, including work on the nuclear side of the business and managing ash landfills, among a variety of other things. Dennis stated that, throughout his career, the industry was chasing technology, from steel coal cars at 45 mph to now having aluminum coal cars at 60 mph and everything that goes with it… and it’s kinda cool! As we continued our conversation, Dennis referred to NCTA, including his involvement in the O&M Committee as a member and ultimately as the Chairman. He evoked thoughts of the early, utility only, ‘good old boys’ O&M

46 | COAL TRANSPORTER

meetings in a small conference room. Dennis recalled that when Tom Canter became the Executive Director they worked hard to take the group in a new direction. Vendors became integral to the conversation widening the scope of the group. During his tenure, Dennis’ goal was to move the O&M Group from a reactive maintenance program to a predictive program utilizing new technology. He observed that, what was ‘good old boy car knockers’ transformed to a dynamic, diverse workforce of modern, technology based professional fleet car managers. Dennis beams with pride that he was able to bring this to fruition. He continued to explain that Tom Canter was instrumental in integrating the outstanding new forces and voices to include Gayle TenBrink and Carmen Sparks, just to name a few that contributed greatly to the NCTA O&M. On the more personal side of his career… Dennis’s wife passed away in 2010 after 42 years of marriage, and, when he described that period as “a tough road”, it was clear that it most definitely was…and still is. With his characteristic positive attitude though, he immediately followed with, “But I have a great family. They have always been very supportive of me.” He also expresses much gratitude to the individuals in the fuel department for “riding with me during those tough times in my life.” He is also thankful to his friends, not only from the O&M Committee, but also the vendors who frequently came up to take Dennis to dinner and to make sure he was okay. He talked about how much that meant to him, saying, “I still haven’t forgotten them; they are, and always will be, in my prayers.” Since retirement, Dennis has made a very conscious and deliberate effort to stay busy. And busy he definitely has been! Throughout our conversation he included stories that illustrated how, his whole life, he has worked and played outside. He clearly has a love of the outdoors and values being able to spend so much of his time there, both at work and during his free time, as evidenced by his membership in Pheasants Forever, Minnesota Deer Hunters, Isanti Sportsman’s Club and a local

snowmobile club. He spends a great deal of time supporting and enjoying these organizations, and shoots on the trap league himself. When I asked him if he cared to divulge scores, he laughed and said, “BETTER THAN HARRY!” And, as we all know who Harry is, we both got a good chuckle out of that! He specifically loves to hunt elk and antelope and went on an elk hunt last fall in Utah, which, of course, included a stop in South Dakota, his birthplace, for pheasants! Through these various clubs, Dennis is very involved in teaching gun safety and safety classes for four-wheelers, and snowmobiles. Through the hunting club connections, those three groups supply all the ammunition and trap range time for the high school shooting team. He was clearly proud of that fact when he spoke about kids from Isanti being in the top ten during this year’s state tournament where 4,000 shooters participated, saying, “it was exciting as hell!” Dennis revealed that he is now traveling quite a bit and divulged that he has been dating and has a lady friend, both of whom lost their spouses suddenly. He talks about how that was a whole new challenge at this point in his life, He went on to say, “it’s a bigger club than you think, and not a good club to belong to. So, if you have a spouse, take good care of them. That’s always my motto.”

Dennis was always good at shooting the “bull!”

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Reflections / Dennis Wanless continued His recent travels have taken him to Alaska (Denali specifically), a Viking river cruise all the way from Budapest to Amsterdam that he called ‘unbelievable’, along with trips to England and Ireland. Last year took Dennis to Scotland. When I commented about him getting around, his response was, “I’m running as hard as I can, just like I did all the rest of my life.” Not slowing down one bit, he tells how he’ll be headed to Norway before this article gets published! Coming off the reservation, Dennis has what he describes as a ‘real reservation family’ with brothers, half-brothers and step-siblings. His one nephew said, “Dennis, we need to find out what we are,” so he gave him a membership to Ancestry.com for Christmas. It was through this site that his son traced the family name back to Scotland. So, Dennis used that as an excuse to plan a trip to Scotland. He says that it was a special moment to stand on the family farm of eight generations, and that he found it to be both an awesome and emotional experience! He kept a travel journal and had a book made recounting his adventures on the trip and gave a copy to each family member. “The only mistake I made,” he says, “was not including a piece of rock, a piece of the homeland to include in the book.”

Dennis and buddy make a great team.

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This is something his brother will likely remedy on his upcoming trip to Scotland. His only child, a son, has two daughters, and Dennis is clearly proud to be ‘Papa’ to his granddaughters. His son holds engineering and biochemistry degrees and an MBA. Dennis is very proud of his son who works at the senior level for Medtronic and his daughter-in-law that works in senior leadership at Polaris Industries. Their family lives in the Twin Cities. Dennis is clearly pleased that they come out to the country a lot to visit. Through all the family years, Dennis got a lot of experience building, expanding, and remodeling homes – he’s done at least four properties! This included tearing apart a house on Long Lake in Isanti County that was only four years old, and later, completely re-building a cabin adjacent to his existing property. Dennis Wanless is clearly a handy guy to have around! As we closed our conversation Dennis had some parting thoughts: “If there is anything I would like to end this whole thing with, it’s to say that I am eternally grateful to have had a fantastic career working at a very exciting time burning and transporting low Sulphur coal and being able to participate at this level. It’s been an exciting wonderful career! Lastly, Dennis wanted to sincerely thank all those on the O&M Executive Committee during his tenure for all their efforts and support! Carmen Sparks, Gayle TenBrink,

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

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. Wells Fargo Rail FirstEnergy Florida Power & Light Company FreightCar America, Inc. GATX GE Transportation Grand River Dam Authority The Greenbrier Companies Hall St. Coal Terminal Hendricks River Logistics High Country Railcar IHS - Energy Publishing, LLC iIRX Impala Terminals Burnside, LLC Kansas City Power & Light KCBX Terminals Co. Kiewit Mining Group Inc. Levin Richmond Terminal Lexair, Inc. LG&E and KU Energy Lighthouse Resources, Inc.

Locomotive Service, Inc. Lower Colorado River Authority Luminant Energy MCRL Coal Car Topping MEAG Power MidAmerican Energy Company Midland Railway Supply Midwest Industrial Supply, Inc. Miner Enterprises Inc. Minnesota Power MinTech Enterprises Mitsui Rail Capital, LLC Muscatine Power and Water Nebraska Public Power District New York Air Brake Northern Indiana Public Service NV Energy OG&E Electric Services Oglethorpe Power Corp. Omaha Public Power District Otter Tail Power Company PacifiCorp Peabody Energy Corp. Platte River Power Authority Portland General Electric Progress Rail Services, Corp Rail Link Railroad Financial Corporation RAS Data Services RESIDCO RungePincockMinarco

Salt River Project Sandy Creek Energy Station Santee Cooper Seminole Electric Cooperative, Inc. Shur-Co, LLC SMBC Rail Services LLC Southern Company Operations Standard Steel Strato, Inc. T Parker Host 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/ Railroad Friction Products 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 Appalachian Railcar Services, LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Associated Terminals, LLC . . . . . . . . . . . . . . . . . . . . . . . . Inside Back Cover Aventics Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 CDG Engineers, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Cloud Peak Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Cooper Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Crown Products & Services, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 CSX Coal & Ore Terminals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32 FreightCar America, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 ILJIN Bearing ART . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

50 | COAL TRANSPORTER

Lat-Lon, LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Lexair, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inside Front Cover NexGen Coal Services, Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Peabody Energy Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Progress Rail Services, Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Slover & Loftus LLP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Strato, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Thompson Hine, LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Wabtec/ Railroad Friction Products. . . . . . . . . . . . . . . . . . . . . . . . . . 33, 41 Xcoal Energy & Resources . . . . . . . . . . . . . . . . . . . . . . . Outside Back Cover

NCTA CALENDAR

OF EVENTS

2018

October 2018 Western Logistics and Planning Gillette, Wyoming Eastern Logistics and Planning Location TBD December 30th, 2018 Receipt at NCTA office of all re-certification forms for the UMLER Fee Waiver for Calendar Year 2019

2019

April 1st - 3rd, 2019 Spring Conference Hyatt Regency San Antonio on the Riverwalk, San Antonio, Texas June 10th-12th, 2019 Operations and Maintenance Conference Ritz Carlton, St. Louis, Missouri July 2019 Advertising and Editorial Deadline for Issue 2, 2019 of the Coal Transporter Magazine July 31st, 2019 Scholarship Application Deadline September 2019 NCTA Scholarship Awards David Laffere Scholarship Three Memberâ&#x20AC;&#x2122;s Children Scholarships

January 31st, 2019 Payment Due for 2019 Annual Membership Fees

September 2019 Forty-Fifth Annual Business Meeting and Conference Colorado

February 2019 Advertising and Editorial Deadline for Issue 1, 2019 of the Coal Transporter Magazine

December 30th, 2019 Receipt at NCTA office of all re-certification forms for the UMLER Fee Waiver for Calendar Year 2020

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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: Hi Pete. Have you seen all the 101’s in this issue of the magazine? Doesn’t anyone know anything in depth? On reflection, I enjoyed my Freshman year of college. I learned the most that year.

PETE: Well, she surely fits the description that Martin Lew uses to define a Millennial. She is quick, smart, and in a hurry to change the world. A really likeable young person.

PETE: Hey now, not everyone has been around since the time of the dinosaurs! What was college like back in Jurassic Park days?!

ANN: OK, I admit to being around a few more summers than some in the business. So, my experience has shown me that every generation learns the ropes and contributes information and perspective in ways we haven’t thought about previously.

ANN: I take offense to that comment, it is called knowledge. Knowledge combined with time and experience can lead to wisdom. PETE: My apologies my old, I mean learned and wise friend. Even YOU don’t know about blockchain. It is a new concept. ANN: Ok, I admit, I had to read it twice, but I learned a lot! I am looking forward to the second installment in the next issue. What did you think about the Railcar 101? PETE: It was very informative for wet behind the ears people like me. As Gayle reported on the O&M Conference, railcars are much more than a box on wheels. ANN: Speaking of wet behind the ears, who was that sweet young lady that we met at the last NCTA conference in Nashville? PETE: Wow, you are old! You can’t remember anyone’s name? Her name was Ellen Pea. ANN: Thanks for joggin’ the old noggin’. Just like our L&P conferences. I knew that I had a trick I was going to use to remember her name. I forgot both her name and the trick, now that IS really bad. What I do remember is that, she is a Millennial! 52 | COAL TRANSPORTER

PETE: Don’t tell me that she is going to embrace Block Chain logistics. Now I will have to study and understand new technological processes. ANN: Less time at the Lilliputian Pub will be a good thing. Actually, it may be a solution for eliminating some paperwork and increasing efficiency in coal transportation for all modes. It has to be good for export. PETE: I have an idea, let’s make sure that Ellen is involved in a potential implementation of Block Chain processes. This is an excellent assignment for the L&P Committees. You will remember they have worked on more efficient scheduling, tracing, and reporting for many years. There cooperative efforts with carriers has been successful. Her enthusiasm will be most helpful. ANN: Need to run. I am gathering my best material to “roast” Tom Canter at the Fall Conference. PETE: Ha, he provides sufficient material for “well done” time on the spittle. I look forward to it. I wonder if his friend Coaltar the Magnificent will show up. s

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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