NCTA Issue 1, 2019

ISSUE 1 | 2019

Wisdom Shared by George H. W. Bush 1980 Address to NCTA

Blockchain 201

Reflections:

CHARLIE MCNEIL NCTA Scholarship Winners

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Contents Randy’s Railcar 101

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Blockchain 201

ISSUE 1 | 2019

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Reflections: Charlie McNeil

FEATURES

DEPARTMENTS

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2

Message from the NCTA President Emily Regis

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Randy’s Railcar 101 Making the Connection: Couplers & Draft Gear Randall Thomure Railway Supply Institute

George H.W. Bush Addresses the NCTA as the Republican Candidate for Vice President of the United States, September 1980

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PUBLISHED BY:

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STB Update: Thomas Wilcox Principal, GKG Law, P.C.

National Coal Transportation Association

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Blockchain 201 Jason Lewis & Michael Loesch Winston & Strawn, LLP

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Reflections: Charlie McNeil In His DNA

By Caroline Riley

Technology Junction Moving Rail into the Digital Revolution Martin Lew, Commtrex

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NCTA Welcomes Its Newest Members

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Calendar of Events

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2018 NCTA Scholarship Recipients

4195 S. Pennsylvania Street, Suite 100 Englewood, CO 80113 Phone: 720-227-1049 www.movecoal.org Editor in chief Melinda Canter Phone: 720-227-1049 melinda@movecoal.org

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CONFERENCES

Production By: Suckerpunch Creative Inc. info@suckerpunch.ca www.suckerpunch.ca

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©2019 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.

Spring Conference Preview

San Antonio, TX April 1-3, 2019

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Membership List

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Fall Conference Review

44

Index to Advertisers

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O&M Conference Preview

St. Louis, Missouri, June 10-12, 2019

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2018 NCTA Washington Visit

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Western L&P Review

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President’s Report / Emily Regis

A Message from NCTA President, Emily Regis

THRIVING AND SURVIVING WITH EXTREMES

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s I sat down to write my report for this issue of the Coal Transporter, I recalled the last time I was writing my report, and how I was dealing with extreme hot weather and a broken air conditioner at home. It is ironic that at this time in early January, my home furnace is on the fritz, right on cue for the coldest weather we’ve had around here in years. Snow has been falling steadily all day with the temperature outside at or below freezing and no sunshine at all. Typical for January you say, except I’m writing this from southern Arizona where the thermometer rarely dips below freezing and we see the sun pretty much all of the time. Didn’t she get her heating and cooling unit fixed about six months ago, you might ask? Well I’m asking the same question as we wait for repair parts that have been delayed by the holidays and that I’m not certain will even arrive by the end of the week. However, I am certain of one thing – we are living in a time of extremes.

Don’t worry, I’m not here to spread warnings about climate change or the dangers of over indulging on holiday treats and snacks. But word to the wise, if you aren’t prepared for the most extreme eventuality, when things break down, you’ll experience the utmost discomfort. Thankfully we have a good supply of firewood, provided for by the seemingly endless supply of fallen tree branches on our acre of property in St. David, Arizona. With our newly remodeled fireplace now furnished with a beautiful antique oak mantel that we found in the back room of a Tucson antique store last year, we have been able to stay warm enough even for our two cats who, after observing the snowfall outside, decided to take a long nap until winter is completely over.

While warming up in front of a crackling fire of mesquite logs, and sipping a glass of eggnog, I reminisced about the trip my husband and I took this fall to Cornwall in the southwest of England. It was a fabulous trip where I learned to drive on the wrong side of the road so that we could visit castles, port towns and see spectacular views of the coastline cliffs above crashing sea waves. The weather was chilly, but fortunately we were able to warm up before a gas or electric fire in the many interesting pubs we found along the way. I noted how in England you will almost never see a wood fire; wood being understandably in short supply in a country that man has

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London welcomes “THE Emily” inhabited since the Paleolithic period. You won’t see a coal fire either, even though it was coal that replaced wood as the country’s primary fuel back in the 16th century. Coal still provides about 30% of England’s power, with about 45% supplied from natural gas and the remainder a mix of nuclear and a growing resource of wind turbines that are now dotting the English landscape. Cornwall is a windy place and in the off season when tourists aren’t contributing to the economy by lapping up the cream teas and Cornish pasties, wind energy is there to help out. I don’t think I’m ready to trade in my fireplace for a wind turbine just yet, but I can appreciate the sacrifice the English people are willing to make by trading their picturesque landscapes for the benefits of a little renewable energy.

So while we await the repairman and the wood supply holds out, whether it’s hot or cold, ice or fire or any combination of extremes, I must say one must always be prepared for the worst. Stockpile your fuel supply. Keep your equipment in good running order. Be willing to try new things. And don’t forget to stock up on the eggnog! s

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NCTA 2019 Spring Conference / Preview

NCTA 2019

Spring Conference Hyatt Regency Riverwalk, San Antonio, Texas | April 1-3, 2019

PROGRAM

The Spring Conference will feature a robust agenda that will keep you current on the many issues challenging the coal, transportation and utility industries.

The Western Logistics & Planning Committee will host a break out session on Tuesday with a working lunch.

Confirmed speakers for this event at the time of press include: • Our favorite lawyer in cowboy boots~ Mike Nasi, Jackson Walker, LLP • Warren Lasher, ERCOT • Bruce Rew, Southwest Power Pool • Andrew Bradford, BTU Analytics, LLC • Tom Wilcox, GKG Law, P.C. • Emily Medine, EVA

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REGISTRATION

Registration is required for each attendee at the NCTA Spring Conference. The fee is $700.00 for attendees representing a member company and $900.00 for all other attendees when registering prior to March 8, 2019. In addition to the conference, the fee includes Monday’s reception and dinner, breakfast on Tuesday and Wednesday and the working lunch at the Western L&P Meeting. Beginning March 8th, an additional $100.00 fee will apply for all late registrants. Dinner guests are welcomed and encouraged to attend, please sign up your guest at the time of registration. Additional fees apply.

Photos: Courtesy of Visit San Antonio

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he NCTA will hold its Spring Conference at the Hyatt Regency Riverwalk along the festive banks of the Riverwalk.

The 23rd Annual NCTA Golf Tournament will be held Monday afternoon, April 1, 2019, at the historic Brackenridge Park Golf Course. Monday evening there will be a Texas welcome, at a “Lone Star Cocktail Reception,” sponsored by TrinityRail, at Boudro’s Private Event Center located a short walk from the hotel. Dinner will feature the inspirational marriage of the traditions and history of South Texas with the finesse of the world’s most excellent restaurants through the interpretations of the Executive Chef Danny Ibarra.

SPONSORSHIP

Conference sponsorship opportunities are available for many of the scheduled events including the reception, breakfasts, session breaks and golf. You can also elect to include your advertising materials in the conference packets or show your support through a conference banner. We recognize our sponsors in multiple ways before, during and after the event. It is easy to pay online through the registration process or by requesting an invoice.

ACCOMMODATIONS:

Hyatt Regency San Antonio Riverwalk RESERVATION: 800-233-1234 or direct 210-222-1234 or visit www.hyatt.com and use the group code G-coal.

ROOM RATES PER DAY: $219.00/day.

The room rate includes complimentary internet. The block cutoff date for guaranteed reservations is Friday, March 8, 2019. s

MONDAY, APRIL 1 8:00 am NCTA Board of Directors Meeting 11:45 am 23rd Annual Golf Tournament & BBQ at the Brackenridge Park Golf Course 12:30 pm 23rd Annual Golf Tournament – Shotgun Start 6:30 pm NCTA Reception and Dinner at Boudro’s on the Riverwalk – Private Event Center

TUESDAY, APRIL 2 8:00 am – 12:00 pm Plenary Session 12:30 pm – 3:30 pm Breakout Session: Western Logistics & Planning Working Lunch

WEDNESDAY, APRIL 3 8:00 am – 12:00 pm Plenary Session

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Special Feature / George H. W. Bush

George H.W. Bush

Addresses the NCTA PRESENTATION BY: HONORABLE GEORGE BUSH Republican Candidate for Vice President of the United States

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ll too frequently, we only recognize and appreciate true accomplishment and greatness after a remarkable leader and statesman passes. I believe this is the case with President George Herbert Walker Bush, the 41st President of the United States. Consider a life that included being a teen-aged combat pilot in WWII, captain of a college national champion baseball team, marrying his high school sweetheart, spurning a possible life of comfort to be an oil field risk taking wildcatter, becoming a Congressman, Director of the CIA, Ambassador to China in uncertain times, Vice President for two terms, and a resolute President facing down tyranny in Kuwait and Panama. During all of this, he and Barbara reared a close-knit family that included two governors and a President.

Our magazine cover shows his funeral train 4141 with photos provided by our friends at the Union Pacific, and provides additional reflection on this extraordinary life.

During September of the 1980 Presidential Campaign, George Bush then a candidate for Vice President, agreed to speak to the Western Coal Transportation Association, the predecessor to NCTA. The transcript of that presentation follows, and is only minimally edited for purposes of clarity and brevity. Mr. Bush clearly reflects the promise of coal in the energy mix looking forward from 1980. Some context from 1980 – inflation was raging, home mortgage rates were nearing 20%, GDP was less than 1%, Iran still held the hostages from our Embassy, the U.S. military was fast-becoming an empty shell, radical environmentalism was ascending with oppressive regulation, two Mideast oil embargoes, and everyone knew we were running out of oil and natural gas. Renewables were not close to being competitive, and conservation and curtailments on natural gas growth were mandated. This has a “déjà vu” feel, does it not?

Finally, the conventional wisdom declared all of the foregoing as the “new normal”, and the American Century was over. This is the context of Candidate Bush who takes a positive and optimistic view of the economy and the future of coal. Note his prescient view of China’s economy and the policy changes being made.

Enjoy reflecting and reading the transcript.

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Mr. Bush: Let me address myself to the field of energy,

if I might. I was in the energy business; I was in the offshore drilling business, and to a modest degree in the production business. I do have some feel for it. I have travelled enough around the world, and I have seen other countries enough to have a respect for our productivity.

I also have a conviction, not with a sense of over-promise, but a conviction that we have the resources in this country to be self-sufficient in energy after a respectable period of time for development of our own resources.

I look at the People’s Republic of China and I see in that country a tremendous resource, particularly in offshore drilling and gas, but it transcends that; it’s going into coal. Here is a country that has been diverted by revolution and war, that is in a different century in terms of their ability to produce. Then, about three years ago the Chinese made a decision; that they were going to use western technology and reach out to the West in order to develop their resources.

Why do they reach out to the West?

Because, they know that we know how to produce. They know that we know how to mine. They know that we are far ahead of them, and what’s happening in China today makes me feel there’s a totalitarian system. A Marxism-Leninism system that is really learned from our heritage and from our strengths. My concern is that while we are going towards regulations and lots of control in some ways, they seem to be reaching out to a system that permits coalitions - offshore coalitions and corporations. That wouldn’t be possible under their old system and way of thinking.

As we look at energy, I think we have to apply certain broad principles. I know that a legislation bill (The Staggers Act – Editor) affecting transportation has just been passed. I realize that bill is controversial. I would make this point, regardless of the fact that some of you may have serious reservations about it as shippers, it is essential that we recognize in a general sense that we have too many regulations in this country, and we have to do something about it.

COAL TRANSPORTER | 7

In some areas, I think this issue transcends Republican and Democrat. I think we have to give President Carter credit and I’m not giving him much credit for hardly anything these days. But in some areas I think it’s fair, knowing that Secretary of Transportation Brock Adams is in the room, there has been some forward movement in the sense of deregulation.

That’s where my concern is - that due to the Congress, largely, and certainly the President in some areas, we haven’t moved far enough.

So what will you do about it? In the first place I, with some background in industry, recognize that there is a danger in what I am about to say, but I believe we ought to get rid of presidentially-appointed regulators who don’t believe that this country can grow and have a sound environment. I believe that they have to go.

The idea that we say to the poor people in this country, people that have been bypassed by our system - no growth. I am sorry, that’s just not good enough for the United States of America.

The second thing I think needs to be done in this regard is that we have to tighten up legislation so that the non-elected bureaucrats are not given leeway beyond the intent of the Congress. That means that the President is going to have to have a staff that is acutely attuned to what I have said, and then sends back legislation, or gets good enough relations with Congress himself, to inject himself into the process before we have legislation passed that gives too much leeway to the regulators themselves.

“Old guys can still have fun and still do stuff.”

– George H. W. Bush

8 | COAL TRANSPORTER

Then, third thing we need to do is have a review of existing regulations to eliminate the excesses. I’ll bet you that everybody here can give me a horror story about the excesses of regulation. I recall in the early days of my business, contract drilling, we needed two permits to drill. I’m told now that it’s twelve. I don’t know whether that’s accurate or not, but it’s reasonably close, and it has grown and proliferated. So, we have to review the existing regulations, not just with cost effectiveness in mind, but with the whole idea as to whether they are helpful or, indeed, overly restrictive. I happen to be one that has a strong belief that we moved away from the states having a lot to say about regulation, and I was enthralled with the Wall Street Journal editorial this morning that talks about the interpretation of legislation where coal producers really have been overwhelmed by Washington environmentalists. I recognize, again, there is a danger when you are in the political arena of being colored as anti-environmental, but I commend to you this editorial because I think there is a lot of evidence that the states are not having enough say in controlling their own destiny in terms of regulation.

The next thing I am convinced that we have got to have is have a thorough review of our public land policy. We have heard a lot about Jimmy Carter’s “War on the West”. I think there is enough smoke and evidence there that we need to review it, and I’m talking now about developing resources. Leasing is too often determined by the whim of bureaucrats, too often driven by a concept of no growth or anti-business sentiment. I believe the

use of sound environment practice has got to be the hallmark of this. I realize that many megabucks are required for private sector investments as we go into ultimate sources of energy. We have to do it today. Coal is 19% of our energy mix; oil, domestically 25%, imported, 21%; gas, 24%; nuclear about 4%.

As we look ahead in going about our quest for independence, you are going to have to move to new energy sources, and tremendous amounts of money are going to be required for those. Yet in some ways, the Government recently has been moving away from our ability to produce.

I remember in the early days of offshore oil in Texas, Louisiana, there was a thing called the Cat Group. Some of you remember. There was a coalition of oil companies that got together and formed a group and did exploratory work that none of them felt they could do on their own. This was in the primary days of that industry. Today that kind of group is impossible under the regulations. You are not permitted that.

“...there is something worse, and that is big Government getting into the energy business...”

What I am concerned about is in this anti-business climate that exists, we are failing to recognize that megabucks are required and that we are putting demands, capital demands, on individual companies that they can’t meet; and, there is less exploration, less innovation than if you could form coalitions.

celeb r

The worst politics in the world is to stand up for big business, but I am suggesting there is something worse, and that is big Government getting into the energy business any further So I want to see a review of these regulations that will permit an efficient exploration. I talk about China. One of the reasons China is going to catch up fast-not as fast as some of its strongest supporters would have you believe, but one reason it’s going to catch us fast is it is moving, as they go into geophysics and as they go to exploration, into these syndicates or coalition of private interests; and as we in this country with a handful of liberal senators up there assaulting the energy business have compelled ourselves not to be able to have these coalitions, I think we have moved just in the wrong direction. I think these regulations ought thoroughly to be reviewed.

In transportation itself, clearly there is a government role that is broken. The only advice I have or the only way that we would be coming at it if elected, Governor Reagan and myself, would be that in our view it ought to be assistance, not ownership. It ought to be initiative, not grants and loans where possible. Those two things ought to govern; it seems to me, assistance to transportation where you have factors of obsolescence.

The fourth point is that the main thing administrations can do, and this really is the first point, is to initiate an economic program, to set a course and stay with it. My big argument, as one who did have experience in business and has been in Congress, is that under Jimmy Carter we have had five economic programs in three and a half years. We have not set a course and stayed with it. We have changed and shifted direction over

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President George H. W. Bush’s casket aboard the funeral train in Spring, Texas and over again, and no business person can make the proper long-range planning if you find these violations and these shifts in economic policy. So our course, the course discussed

by Governor Reagan yesterday, would have as its objective the following points: One, we would endeavor certainly to increase productivity in this country. When President Carter came in, productivity was building up at about 3.5% per year. I believe that’s the number, and now last year it was minus .9%. That just isn’t good enough for the United States. Our need for participating in the existence of regulations in the Federal Register and the result in taxes higher and higher, result in a decline in productivity. More productivity, less regulation, and I ‘m not talking about taking everything and deregulating it all at once and leaving the consumer open to monopolistic practice. Nobody is suggesting that, but the thrust should be towards legislation, more real growth clearly, gets rid of this idea that the United States can’t grow, can’t increase the pie. I’ll tell you the helplessness of that suggestion that we are not going to grow. I think it is-so cruel to people in this country that are out of work or can’t find jobs. It’s unconscionable.

Inflation, we give lip service to it, but all I ask you is to review the economic program that Governor Reagan talked about yesterday, take a look at what’s happened to inflation recently, what’s happened under this administration since Jimmy Carter came in. He just brutalized Gerald Ford in the last campaign, 4.8 percent. That’s unconscionable. I’m going to do something about it. He did, and I think that we now have to recognize that we need a consistent economic policy that is going to go after inflation. Clearly one of the results will be more jobs, and part of the Reagan program is less waste. Everybody gives it lip service. I believe it’s got some ideas there that are outlined that 10 | COAL TRANSPORTER

it could be useful, and so this is a broad program, and the broad matrix of this meeting in a sense is goo transportation. But there is no industry, or there is no mix of industries, that gets together, where the matrix is something other than inflation. The administration wants us to believe that the increase in the price of oil from the Middle East is the prime cause, and if you listen to their rhetoric, it is the sole cause of inflation in this country.

This President, as we have learned, is an expert in taking and shifting that responsibility. (Brock, you’ll have to excuse me for a partisan comment.) When I listened to that Democratic convention, I didn’t hear a word about their own record. All I heard was an effort to destroy Ronald Reagan. I don’t blame them. They cannot talk about their own record in a positive nature; but this shifting of responsibility; the American people are not going to let them get away with that.

In this instance, a simple comparison of the U.S. rate of inflation with, say, West Germany, blows the administration’s economic argument out of the water. West Germany, a country that’s also felt the oil crunch, imports all but a drop of its oil; the rate of inflation in 1980, 7.5% - the increase in consumer prices in the Federal Republic between December of ‘78 and June of this year, 9.8%. In this country, the comparable figures are 15.4% for ‘80 and a staggering 22.7% for December of ‘78 to June of this year. Given an oil price that’s affected the countries about equally, inflation in Jimmy Carter’s United States, if you will, is running at more than double the inflation rate of the Federal Republic of Germany, and they import far more of their energy than we do.

No one questions the fact that oil price increases have had an impact on the cost of goods and services. They have. But, when the President and the members of his administration try to excuse their failure to reduce inflation by blaming it all on

the oil crunch, I think it’s just a cop-out. I frankly think it’s unfair. I think it’s an insult to the intelligence of our people The problem is much, much more than energy prices. The problem is largely Government spending and declining productivity. I mentioned the numbers when Carter came in, 3.5% in productivity. This last year, at least, it is minus .9.

Productivity has declined in six straight quarters, and so what do we propose? What does the Reagan proposal encompass? It encompasses limiting the growth of spending. What we are talking about is holding that growth of spending, and this is the economic point, substantially less than the rate of inflation, and that is a key point. We can grow but we simply can’t grow as recklessly or as fast as we have, in the future.

A third point would be an all-out war on waste. It’s easy to give lip service to it, but it’s something that has to be an ingredient of this program.

The fourth point, and one that is considered by some to be very controversial, is meaningful tax cuts. The program was attacked yesterday by Jimmy Carter as favoring the rich. Let me tell you something. We calculated on the plane coming over here that a family making $15,000 with one wage earner would get a reduction, under Jimmy Carter’s plan, of $2-the rebate, the tax reduction, to offset the Social Security increase. I saw on NBC, which is my new authority, last night about $75, but nevertheless minimal under the Reagan plan; $15,000, the family would get a cut of about $150. Now, $15,000 is a lot of money. Don’t get me wrong, but I don’t think under the inflated economy that we have, that that is favoring the rich. I also feel that it is perfectly proper to have an across-the-board cut, because I do believe that we will probably move towards increasing savings and, thus, increasing investment. That’s the hallmark.

That’s that underpinning of this program. So you need meaningful tax cuts, not this stop and start. Jimmy Carter said in March

“We know what works. Freedom works.

We know what’s right. Freedom is right.”

– George H. W. Bush

of this year, I will never propose tax cuts until that budget is in balance; I will not permit it until it’s in balance. Then, he sees the Democrats on the Senate Finance Committee get out front on Republican tax cuts. Incidentally, almost unanimous-I believe it was unanimous on the Senate Finance Committee going forward with the - roughly the kind of tax cut I’m talking about here. So then he comes forward and says, we’re going to have a tax cut and we will do it next year. There have got to be cuts that are meaningful, and I believe the schedule pointed to yesterday by Governor Reagan, will do just that, and then we will stimulate investment in capital formation.

Then the last point is the acceleration of depreciation, this whole concept to stimulate investment and thus stimulate the private sector of the country and hopefully to stimulate things, and, indeed, productivity. It is a sensible tax program.

It will stand the light of day. When you hear people like Allen Greenspan and George Schultz and Charles Walker out there advocating this, it isn’t any makeshift quickie thing. It’s sound, sensible economics. It is a very different economic approach than we have had in this country for three and a half years. It’s one that the Congress is beginning to understand.

Many, many of the big spenders and those high centralized Government people are now talking like newborn, born again supply side economists. Why? Because they know the American people are overtaxed and that we are underproducing. We have problems in the transportation industry.

We’ve problems in the energy industries, but unless we address ourselves fundamentally to the problems of the American economy, unless we chart out a course that we will stay with and a course that does this stimulation, we are going to be in serious jeopardy in the Eighties.

I happen to be an optimist about the United States. I guess it was my experience in business that anybody dumb enough to go into the offshore drilling business in about 1958, ‘56, or whatever it was, would have to either a screw loose or be an optimist, because it was very, very competitive in those days. And nobody knew whether we were going to make it or not, because there was a lot of innovation. There were a lot of capital formation problems. There was a whole industry where nobody knew much about it. Not today - look where we are because of the success and the risk taking in that business.

That business experience drove home to me more clearly than anything else in my life the need to have the economy such that we can form capital, take risks. I hope that you will take a sensible look at our economic approach. I hope you will not be persuaded by simplistic criticisms. I hope you will look at the overall record of the man that is doing the criticizing, and I think if you do, you will find that we are offering this country some hope at a time of gloom.

I think you will find that we are the side that says, we can solve problems in the future and offer people a better life at home and inasmuch as what we do in interaction with our friends abroad because of the size of the world and the dependency of the world on the United States. I think if we embark on the program and start on it and stay with it, get support for it in the Congress; we can in a large way regain the respect that we have lost in the international trade circles abroad. That’s important, too.

Thank you very, very much. s COAL TRANSPORTER | 11

NCTA 2019 Operations & Maintenance Conference / Preview

NCTA Operations & Maintenance

Conference Preview Ritz-Carlton – St. Louis, Missouri – June 10-12, 2019

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he NCTA Operations & Maintenance Committee will hold its annual conference June 10-12, 2019, at the fabulous Ritz-Carlton in Clayton, Missouri. The city of Clayton is the premier hub of business, dining and shopping in the St. Louis Metropolitan area. Make your list now to try all of the St. Louis originals, including St. Louis barbecue, gooey butter cake, frozen custard, St. Louis style pizza, and toasted ravioli. For an absolute culinary delight, you do not have to leave the hotel; a Ritz-Carlton specialty is the filet served on a Himalayan salt block in the Grill. The hotel is located in a cul-desac ringed with flowers, foliage, a coffee shop, and restaurants.

PROGRAM:

The conference will include sessions dedicated to the study of the technology, design, maintenance, operations, and repair of railcars in unit train service. The traditional private car owner roundtable will allow attendees to discuss challenges and review best practices. The roundtables will consist of two sessions on Monday, with the early morning session open to NCTA utility members, and the mid-morning session open to all NCTA members. The conference will feature the opening night reception, breakfasts, dinner for the attendees on Tuesday evening and will conclude with the annual golf tournament.

Confirmed Speakers at the time of press include: • Kerry Sauter with FreightCar America addressing corrosion issues on coal cars • Mark Viz with Exponent, Inc. focusing on galvanic interaction between dissimilar metals • David East with Wabtec, presenting on truck maintenance • Erick Graves with Miner Enterprises on draft gear inspection and maintenance

Companies invited to have speakers include: • Progress Rail

• Lexair, Inc.

• AAR

• A. Stucki

• Union Pacific

• TrinityRail

• BNSF Railroad

12 | COAL TRANSPORTER

SPONSORSHIP:

Conference sponsorship opportunities are available at five levels of support, from Double Black Diamond at $6,500 to Silver for $1,000. Show your company colors at a level that fits your budget. Please contact Melinda Canter at 720-227-1049 for additional details on sponsorship and company recognition.

ACCOMMODATIONS:

Entranced by stunning chandeliers, graceful marble, and deep, rich woods, one immediately understands how The Ritz-Carlton, St. Louis became an icon in this city dubbed “The Gateway to the West.” Amid the warm ambiance of our luxury hotel in St. Louis, Missouri, guests are transported to an elegant and refined era, one that is alive and well in this adventurous Midwestern city. Suddenly you feel inspired to linger over a martini, close a business arrangement, or just give wild abandon to the senses.

Treasured by residents for its famed Lobby Lounge featuring a martini bar with over 200 martinis and hand-rolled sushi, private cigar club, and gracious service, it is no surprise that The Ritz-Carlton, St. Louis has consistently earned the distinguished Four-Star rating from Forbes Travel Guide Star Awards.

Each room features a spacious 530 sq ft. floor plan with a Juliet balcony, flat screen TV with fully integrated technology, built-in electrical outlets and broadband connections on the desktops, wireless internet access, in-room gourmet coffees and teas, Comfort Essentials feather beds, marble bathrooms, European toiletries and complimentary daily paper. Check in is 4:00pm and check out is 12:00pm. With the NCTA-negotiated rate self-parking is complimentary and valet is $25.00 per day.

RESERVATIONS:

To book your room, please visit www.ritzcarlton.com, enter the St. Louis location and the group code NCTNCTA-Deluxe or call 314-863-6300.

ROOM RATES:

Embrace the luxury of the Ritz-Carlton. The group rate of $199++ per night single/double will be honored from June 5, 2019 - June 15, 2019. The cutoff date for the NCTA room block is May 17, 2019. The Ritz-Carlton is located at 100 Carondelet Plaza, St. Louis, Missouri. s

JUNE 10, 2019, MONDAY 8:00am Utility Roundtable 10:30am All NCTA Member Roundtable 12:00pm Reserved for private functions 6:00pm Welcome Reception JUNE 11, 2019, TUESDAY 8:00am General Session 6:30pm Reception and Dinner JUNE 12, 2019, WEDNESDAY 8:00am General Session 11:30am Conference Adjournment 12:30pm NCTA Golf Tournament

Harry Mullins, O&M Chairman, has retired as of March 2019, from Southern Company. Mr. Mullins brought unparalleled expertise and knowledge as an operator and fleet manager, as well as his collaborative management style to the committee. His vision for the committee was to always try to build consensus. He would often ask, ‘What do WE want to do?’ and then would wait for everyone to speak their mind or give a suggestion. His kindness and generosity of spirit in all he did will always be remembered and greatly appreciated.

Education and knowledge were always emphasized and seen as something to share with others in order to bring everyone along to a higher level of expertise.

Harry, we wish you many points on the buck, a tug on your fishing line, many pheasants, a straight shot at the course, and lot of hugs from the Grandbabies. Your presence, friendship, and guiding hand will be sorely missed! With the utmost respect and gratitude, we say good health and happiness until we meet again.

COAL TRANSPORTER | 13

Technical / Randy’s Railcar 101

COUPLERS & DRAFT GEAR Making the Connection

Randall Thomure, Railway Supply Institute

Image 1: Pulling the pin

‘‘P

ulling the Pin” is a great railroader expression for going home or quitting for the day. Railroaders have expressions for everything, most are rooted from something in the past. For example, in the early days, cars were connected using a link and pin connection. So, when you “pulled the pin”, you unhitched the car from the train.

The link and pin connection was a simple and reliable but highly unsafe way to connect cars to make up a train.

Fortunately, today we have a very robust system to connect cars, couplers and draft gears. Every time a car gets switched into another car, the couplers on each car take the impact of the collision, but also must engage or lock together without any additional actions. To minimize the effects of the coupling forces, draft gears are designed to help mitigate some of the damaging effects of these impacts. This article will be a basic primer on how couplers operate and how the draft gears work to minimize the abuse from switching and in-train forces.

Before we get to the couplers and draft gears of today, here is a quick review of the evolution of railroad coupling methods. The early method was the old link and pin, as pictured on Image 1 and Image 2.

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It goes without saying, OSHA wouldn’t approve of someone standing between two cars, holding a link to guide it into a slot. Brakemen of old tended to lose some body parts or worse.

Approximately 38% of railroad worker injuries were attributed to coupling accidents. It is no wonder that that the government got involved to protect workers.

Image 2: The Link

Figure 1

Figure 2

The “Janney” coupler, patented in 1873 by Eli H. Janney (U.S. Patent 138,405), was one of the first successful versions of what would be known as an “automatic coupler. Major Janney was a Confederate veteran of the Civil War. After the war, he was a dry goods clerk and used his lunch hour to whittle wooden prototypes Here are a few pictures from the original patent application. Figure 1 shows the left coupler knuckle closed and the right coupler knuckle open. Figure 2 shows both coupler knuckles closed and locked, as depicted by the shaded portion. Figure 3, shows the interaction between two closed knuckles, which prevents engagement. Although the drawings are rudimentary, it established the template for our modern couplers. The early Janney couplers were also known as “Buckeye” couplers because the couplers were cast in Ohio, the “Buckeye State” by Ohio Brass Company.

The Janney (Shown in Image 3) coupler started the revolution leading to the standardization of the design by the Master Car Builders Association in 1888. Eventually the U.S. Congress passed the Railroad Safety Appliance Act of 1893 which mandated the replacement of pin and link couplers with an automatic coupler by 1900. As a result of the elimination of the pin and link connection, the railroad worker injury percentage from coupling attributable to coupling incidents dropped from 38% to only 2% by 1902.

There were many alternatives offered for the Janney coupler, especially during the transition period. One feature of these designs was a slot in the face of the knuckle (Shown in Image 4). The link would be guided into the slot on the knuckle and the pin in the vertical hole in the knuckle. We no longer have the slot in the knuckle, but the vertical hole is still included in today’s knuckles.

Figure 3

Image 3

Image 4

November 23, 1897 - Inventor Andrew Jackson Beard Patents the design for the “Jenny” railroad car coupler helping to revolutionize the railroad COAL TRANSPORTER | 15

American Steel Foundries [ASF] (now Amsted Industries) developed the Type D coupler in 1913. It was adopted as the industry standard by the Master Car Builders Association in 1916. A lighter version of the Type D coupler was the “Alliance” coupler because it was casted at ASF’s Alliance, OH foundry.

One of the main features of the Type D coupler was the interchangeable parts, which simplified the maintenance.

The Type “E” coupler was made a standard by the American Railway Association, (predecessor to the Association of American Railroads [AAR]) in 1930. The E coupler head was virtually the same as the Type D, but was not interchangeable with the Type E. Here is an excellent wooden model of a sectioned coupler to show some of the parts of the standard Type E coupler (Shown in Image 5).

The design and operation of a coupler is a perfect application of the best KISS engineering principle.

The knuckle, showed in the closed position, is locked by the Lock Block (we try to even keep the naming simple too).

To uncouple, the Lock Lifter, moves the Lock Block up, and allows the Knuckle to open. A key feature is that it is impossible for the knuckle to open when there is pressure or force on the inside face of the knuckle (draft load).

Couplers are only part of the story. The next device that comes into play is the draft gear. There is the old adage – “It ain’t the fall that kills you – it’s the sudden stop at the end.” The same holds true for freight cars. When a rolling 286,000-pound rail car hits a standing group of cars, that sudden stop would be very damaging to the railcar and its contents, if not for the draft gear.

The draft gear is another simple, but critical device on a railcar. Its job is to take that sudden impact force from

switching to spread it over a longer time interval to lessen the overall effect. Draft gears employ various methods to do this task, but it must do it in a very small window. The standard draft gear has a maximum travel of 2-3/4 inches. Draft gear designers use friction wedges and/or elastomeric components to slow down the transfer of force from the coupler to the car body. To go into engineering nerd-land for a moment, energy can not be created or destroyed; but can be managed. So that peak energy transfer from the rolling railcar that suddenly stops, is through the coupler, smoothed out by the draft gear to lessen the effects on the railcar body and lading for both the rolling freight car and standing freight car.

This same method is used to lessen the effect of when there is a sudden pulling load (draft load) versus the impact load (buff load). How this one group of devices can be made to work in both the draft and buff loading conditions is again an engineering KISS solution.

Here is a cutaway of the standard draft system starting at the end of the coupler (Shown in Figure 4). The coupler transmits impact or “buff” loads into the draft gear through a thick metal plate (“Follower Plate”) that is between the end of the coupler and the front of the draft gear. As the draft gear compresses, it is spreading that impact buff load to lessen the peak force. The resulting force is transfer to the car body through the rear draft lugs attached to the center sill.

When a pulling or “draft” load is applied to the coupler, the load is transfer to the draft gear through the flat bar (“Crosskey”) that goes through a slot in the rear of the coupler body through the Yoke, which wraps around the end of the draft gear. As the draft gear is again compressed by the draft

Image 5

Ken Quast Model Makers kenquast@kenquastmodelmakers.com 16 | COAL TRANSPORTER

Figure 4

load, the front of the draft gear thick metal (“Follower Plate”) to Front Draft Gears attached to the Center Sill. The coupler, yoke and draft gear components along with the associated draft stops and plates make the single system handle the load in either direction. A simple solution.

A few of other notes on this diagram. The draft gear shown is also partially cutaway to show the internal springs that are used to return the draft gear to its neutral state. Not shown are friction wedges or other means that is used to slow down the either peak buff or draft loads. Springs only service as a return method and have little value in lessening the coupler loads. Miner Enterprises has an excellent animation of a draft gear in operation. Here is a link to the video: minerent.com/Draft_Gear-Overview.php. It really does a much better job than my words could ever do.

There are many variations in couplers. Type E couplers with top and bottom shelfs are standard on tank cars. Type F coupler with an interlocking head design and a vertical pin versus a flat bar to connect to a yoke and draft gear to allow for the coupler to swing more freely. Type F with interlocking head and a rounded shank versus a vertical pin for rotary dump cars.

Couplers with longer shanks for longer cars to allow the couplers to swing laterally. Some longer shanks still could be similar to the standard Type E by a few inches, but longer couplers require a Type F with the vertical pin. Then there are the Type E/F couplers, a Type E head but due to the length a Type F vertical pin; pretty common on longer intermodal cars. Regardless of the type or length, the end result is the same.

Draft gears also have variations both within the standard draft gear arrangement and hydraulic cushioning units. End of car [EOC] hydraulic cushioning units come in various lengths and “pre-loads” to accommodate certain performance requirements. Center of car [COC] are either hydraulic or friction plates are contained in a standard center sill and connected to the car through a “sliding” center sill. Both EOC’s and COC’s use the longer travel to lessen the peak energy transfer from buff and draft loads. The same basic principle as the standard draft gear, but further minimizes the peak loads going into the car

body and lading. COC’s have fallen out of favor with the advancement of EOC’s and the inherent weight and maintenance issues.

A couple of final notes in closing about draft systems.

There is a designed “weak link” in the system, the knuckle. The knuckle is the most exposed to the first impact from buff loads and pulling from draft loads. The knuckle is designed to fail first when the buff or draft loads are excessive.

This feature helps to prevent excessive loads from being transferred to the car structure. All locomotives and cabooses (when they were around) carried a few spare knuckles. A locomotive engineer with poor train handling skills made a lot of work the head brakeman.

The second design feature of the draft system is the gap or slack when cars are coupled together. The slack between couplers allow for some freedom of movement between cars. It is also critical feature when starting a train. Even with modern wheel slip technology on locomotives, attempting to start a standing block of 120 fully loaded coal cars require more force than the first car behind the locomotive could handle, which would result in a failure of the knuckle as mentioned above.

But with a little slack between each car, the locomotives could basically start each car individually. Locomotive engineers know that it takes a bit of distance from the time the locomotive starts moving until the last car starts to move. If the locomotive engineer doesn’t take that into consideration when starting, there is the very real possibility that by the end of the train, a knuckle could fail. It’s like cracking a whip. Another reason that locomotives carry extra knuckles, to replace those that fail due to an overzealous engineer. And why the brakeman’s job is still the worst job on the railroad when they need to do the dirty job of correcting the engineer’s mistake.

AAR has established standards for coupler and draft gears, as well as inspection and replacement rules. These are contained in AAR’s Manual of Standard and Recommended Practices Section B Freight Car Draft Components, Section S-III Coupler and Yoke Details and Rules 16 thru 21 in the Field Manual of the AAR Interchange Rules covering couplers, draft gears and the other components in the draft system. If you want to learn more about couplers, draft gears and other draft components, it would be a good place to start. Vendors including Amsted, Miner Enterprises, Stucki, McConway & Torley and Strato are great sources of information about their products.

In summary, the coupler and draft gear system is a critical; but seldom noticed system on a railcar. It is really a tribute to the early work of Major Janney that is still in evidence today.

Modern draft systems handle the very tough and unheralded job of dealing with constant abuse with minimal notice.

We need to thank those early pioneers and for those that have come after that give us such extremely durable devices in a very tough and unforgiving task. s COAL TRANSPORTER | 17

Technology Junction / Martin Lew

TECHNOLOGY JUNCTION Moving Rail into the Digital Revolution

T

By Martin Lew, CEO of Commtrex

he development of railroads was arguably one of the most important technological innovations of the Industrial Revolution. Through the formation of the U.S. rail network, this mode of transportation brought profound economic, social, cultural, and political changes to a country entering the next phase of growth. By 1880, the U.S. had 17,800 freight locomotives carrying 23,600 tons of freight, and 22,200 passenger locomotives. In 1916, there were a record 254,000 miles of railroads traversing the country. During this time, the U.S. railroad industry was the nation’s second largest employer, and effects on rapid industrial growth included the creation of the modern system of management.

Fast forward to 2019 – without railroads, the world would be a different place. As an economy, we have come to depend on rail to connect population hubs and move freight across the 50 contiguous states. Each day the US freight system transports 48 million tons of commodities and goods that are vital to the US economy, from energy sources such as coal and oil to everyday products like food, motor vehicles, and electric appliances. Although the importance of efficiency and profitability has remained the same for more than a century, the focus has shifted. While constructing railroads and developing physical infrastructure was the primary objective in the past, building data modules and developing innovative digital technology systems is the future.

It is highly evident that the transportation industry in the US, just like every other industry, is either being disrupted or enabled by technology. Innovative technologies are improving operational efficiencies in freight transportation across every mode. Technological advances, such as self-driving trucks, are becoming more than just an experiment. They soon will be a prevalent part of the trucking landscape. For rail to continue to remain competitive, railroads, asset owners, service providers, and

The US Department of Transportation (DOT) estimates that there will be an 88% increase in rail freight demand by 2035.

18 | COAL TRANSPORTER

the entire rail ecosystem needs to become easier for shippers to navigate. The US Department of Transportation (DOT) estimates that there will be an 88% increase in rail freight demand by 2035. In order to meet that demand, the rail industry will need to aggressively focus on improving operational efficiencies.

Otherwise, they could see their competitive edge decrease over a material share of their baseload traffic.

There are many ways the rail industry can be competitive and stay in lockstep with trucking technology. The industry should be investing more capital and resources into understanding how technologies such as Blockchain, Internet of Things (IoT), and Big Data can remove inefficiencies in fleet management and freight movement within the rail network.

Technologies such as Blockchain will eventually end paperbased communications and eliminate error-ridden processes, such as recording shipping manifests and waybilling multiple car shipments. Advanced predictive systems could help reduce fleet maintenance costs while also fully optimizing the management of the rail assets. The data that is collected by railroads and shippers are immensely underutilized and needs to be leveraged to create greater insight into improving applications, behavior, and decision making. We are still in the early stages of understanding the true application of how big data can be utilized, but companies like Commtrex are well on the way to making activity-based data analytics accessible to rail professionals. Many companies have already begun to reap the benefits of Commtrex’s online rail marketplaces and data analytics. They TH_CoalTransporter_022011:Layout 1 2/17/2011 2:40 PM Page 1

have found that this type of technology can effectively bridge the gap between raw data and meaningful insights in the interests of providing tangible results.

The next generation of shippers will not look at data as merely one of their tools to help make better decisions, but they will rely on it to extract insights, identify trends, improve productivity, decrease maintenance costs, and gain competitive advantages for the products they are shipping. The future success of the rail industry will highly depend on significant investments into not only constructing/upgrading the physical rail network, but also embracing the integration of a digital infrastructure that will help provide real-time intelligence for shippers, railroads, lessors, and service providers. The continued development of technology in the rail industry will prove to be one of the most critical competitive strategies for continued growth in the current Digital Revolution. s

Commtrex is the largest online, open marketplace facilitating business between Rail Shippers, Storage Providers, Assets Owners, Railroads and Service Providers. Our members have over $510M in assets in the system, more than 180,000 storage spaces listed and over 3000 service locations in our directory. Commtrex has the rail industry’s first exchange-based pricing index for rail storage and leasing rates.

We keep you moving.

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

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

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

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COAL TRANSPORTER | 19

Annual Visit/ Washington D.C.

2018 NCTA Visit to Washington, D.C. BY: Tom Canter, NCTA Executive Director Emeritus

T

he annual sojourn by NCTA Board Members and NCTA Staff to the “Washington Swamp” was conducted from Oct. 3-5. The purpose, as always, was to promote the public image of NCTA to government officials and national associations; and to deliver and receive pertinent information, data, and narratives. The group visit was an efficient, informative, and meaningful series of meetings to exchange thoughts on the current issues. We heard directly from the “movers and shakers” who spend their days in the policy arena. It is always a great opportunity to distribute our quality magazine, The Coal Transporter, to government and association offices.

Over the years, the proven itinerary is to visit governmental offices, but invite associations, consultants, and law firms to come to us by our hosting a luncheon named “The Big Cheese Luncheon” for many years. Our friends in D.C. look forward to an invitation to our roundtable each year.

We are most appreciative of the National Mining Association for providing a beautiful venue for our meeting with a view of the Capitol Building.

This year, the Executive Director arrived early and was pleased to attend the first “Railroads + Shippers = Solutions” conference in downtown D.C. This one-day conference is the creation of Dan Elliott, the Chairman of the STB for several years. Dan was a frequent speaker at NCTA conferences. The concept of this new conference is to create a platform for better communication between shippers and carriers undergirded by an improved STB regulatory authority. Again, Dan believes this will lead to better solutions with less litigation. A major topic was how to increase the use of arbitration by setting parameters to ensure more equitable bargaining power between captive shippers and carriers. There were many ideas, but practical solutions are still to be found.

Our first meeting was with an official from the Environmental Protection Agency. This was our first visit in many years as coal industry representatives were manifestly not welcome during “the war on coal”. There is now a commonsense approach to protect the environment. The reform of the Waters of the US Rule (WOTUS) and the publication of the Affordable Clean Energy Policy (ACE) Rule are the topics of great interest to the coal industry. Since

20 | COAL TRANSPORTER

both the WOTUS and the so-called Clean Energy Policy were not codified by Congress, they were subject to being overturned, modified, or placed in a new rulemaking. The Administration is intent to conduct the rulemaking on ACE deliberately with good science, and in accordance with the Clean Air Act. If done properly, the rule cannot be overturned easily.

Three NCTA Board Members and other NCTA member companies have representatives on the Rail Energy Transportation Advisory Committee. Brian Fuller of Southern Company is a Co-Chair of this group. Various groups and interests report to RETAC at the semi-annual public meeting.

Brian used information developed by NCTA and analyzed by NCTA staff to present a PowerPoint showing an update from an electric utility perspective.

Several of our entourage slipped around the corner to visit the Association of American Railroads senior staff. We discussed some fond memories and good battles while pleasantly saying farewell to outgoing President Ed Hamberger. It was a great opportunity to directly inform Ian Jefferies, the incoming President, about the functions and importance of NCTA. Our friend and perennial NCTA conference speaker on economics, John Gray, was also in attendance.

The annual “Big Cheese Luncheon” is a roundtable of associations, lawyers, and consultants conducted by NCTA. A multitude of subjects are covered to let everyone know “what is hot, and what is not”. Surprisingly, the attendees strive in the same arena, but seldom have the chance to hear each other in a noncompetitive environment. Among participants were: CFACT, Freight Rail Customer Alliance, American Waterways Council, Institute for Energy Research, Energy Ventures Analysis, GKG Law, American Coalition for Clean Coal Electricity, Slover and Loftus, Edison Electric Institute, L.E. Peabody, and the American Chemistry Council.

Some topics discussed were Water infrastructure issues and progress, the plans and policies of the Administration, the ongoing challenges for captive shippers, the growing export market and its logistical challenges, updates on STB initiatives and personnel, coal markets and demand analyses, and much, much more. The information gained along with the networking makes this three-hour working luncheon equivalent to a mini-conference.

As always, we provide time for “one on one” time with the STB Commissioners, Chair Ann Begeman and Vice Chair Deb Miller and some of their staff. Both meetings were educational allowing for the NCTA team to discuss industry issues and ideas.

Our final visit was at the Forrestal Building meeting with several ranking officials of the Office of Fossil Energy. We thanked DOE for their wise position regarding the importance of the coal industry. The major part of the discussion focused

Gayle TenBrink, Melinda Canter, Deb Miller, Emily Regis & Tom Canter at the STB

Seth Schwartz

Networking at the ”Big Cheese” Luncheon

on coal logistics and expanding the export opportunities for coal to Asia. A welcome discussion without easy answers, but we agreed to be a resource for their analyses.

Yes, there was time for fun. Economics drove our staying in Alexandria and using Metro, Uber, and taxis. We all ate with Epicurean delight at Filomena’s Ristorante in Georgetown. We always invite some non-Board members to join us. Let us know if you are interested in attending next year. s

The “Big Cheese” Luncheon

Robert Rosenberg

Newest Board Members Terry Hicks & Gayle TenBrink

COAL TRANSPORTER | 21

NCTA 2018 Fall Conference / Review

NCTA ANNUAL

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Business Meeting and Conference Omni Interlocken - Broomfield, Colorado | September 10-12, 2018

he NCTA Fall Conference activities were held overlooking the iconic Boulder Flatirons at the Omni Interlocken Resort in Broomfield, Colorado. The stunning backdrop set the stage for education, networking, and a fond farewell.

The industry continues to move forward with optimism looking for ways to innovate, expand to new markets, and create a brighter future. The conference opened with an overall view of the US economy by John Gray of the Association of American Railroads. Bob Yu from S&P Global painted a picture of continued flat natural gas pricing based on his analysis of supply and demand, taking into account natural gas storage, usage, and LNG exports.

A detailed report by Wendy Hutchinson from Millennium Bulk Terminals provided an update on the progress and challenges of their effort to export coal out of Longview, Washington. As of this publication date, the project is now in the seventh year of the approval process, while a grain terminal site next door, received approval in a mere two years. We applaud Millennium’s tenacity as they inch toward approval of the terminal and fulfill their vision of enriching our country while supporting our allies abroad.

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Mike Nasi of Jackson Walker, LLP, and Paul Seby of Greenberg Traurig, LLP provided updates on the Trump Administration’s efforts to repeal the flawed Clean Power Plan and replace it with the “Affordable Clean Energy Rule,” known as the ACE Rule. The rule seeks, in part, to address the constitutionality questions of the Obama Era Clean Power Plan. There is an expectation that more actions will be taken by the Trump Administration’s EPA to restore balance to the rules it makes with a greater emphasis on science-based objectivity in its rulemaking process.

Mr. Nasi turned our attention to the topic of energy resiliency tying it to the PJM Bomb Cyclone Case Study, and the need for transparency in our electric bills.

He cited the hidden cost of renewables in current pricing structures. Presenting a full picture to consumers will allow them to fully understand their statement and how much they are paying for their electricity choices and usage. Mr. Nasi has been spearheading a project called, “LIFE Powered,” whose goal is to reframe the national discussion concerning the country’s energy portfolio and the importance of an “all of the above energy policy” in providing reliable, abundant, affordable energy.

These pillars are necessary to maintain the American quality of life and to help to advance the human condition globally.

The weaving of humor and sobriety punctuated the presentation of David Batz of the Edison Electric Institute.

His address on cybersecurity provided us with awareness and tips that we should all utilize as standard operating procedures to make ourselves and our companies safer from phishing, cyber breaches or attacks.

Martin Lew, the founder of Commtrex, LLC presented a ‘Blockchain for Logistics 101’, that sifted through the complexities by using the example of his brother stranded in Mexico needing money. His clever story helped simplify an abstract concept.

NCTA appreciates and thanks all the speakers that sacrificed their time and talent to enrich our membership with their knowledge.

The 44th Annual Conference also served as a reflection point, hosting Tom Canter’s Appreciation Reception and Roast. Tom served as the Executive Director for NCTA for over 24 years, faithfully guiding the organization with integrity, resolve and humor. Past Presidents and retired members joined the festivities, sharing memories and expressing good wishes. Thank you, Tom, for carrying and protecting the NCTA mantle. Fair winds and following seas! s

2018 Fall Conference Sponsors Breakfast Sponsor

Coffee Break Sponsor Tom Canter and Mark Adkins

Paul Linton

Ken Brockway

Banner Sponsors

GATX The Timken Company Transportation Services, Inc Argus Media Jerry Wess

Mark Adkins

Bob Neff

Steve & Sherry Holloway, Judy Canter, Duane & Donna Richards

Doug Glass

John Mayer, Terry Hicks, Donnie Peake, Kevin Koepke

Tom Canter and Emily Regis

COAL TRANSPORTER | 23

Western Logistics and Planning Meeting / Review

Western Logistics and Planning Meeting Gillette, Wyoming | October 9-11, 2018

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CTA attendees flew, while the snow blew into Gillette, Wyoming to attend the three-day Western Logistics and Planning Meeting. Committee Chairman Mark Adkins of TUCO/Nexgen, and Scott Yaeger of Peabody Energy worked closely with the mines to create a robust agenda, including educational tour opportunities.

Wednesday morning kicked off with rail carrier performance updates from both Jason Plett of the BNSF Railroad, and Matt Pick of the Union Pacific Railroad. Their participation is always welcomed and appreciated. Peabody’s Don Curtis presented a review of the wet weather challenges that the pits can face in the Basin. Brian Reents continued the morning by informing the group on the status of West Coast exports. Snow on the ground provided the appropriate setting for the discussion of side release and other cold weather products from Trey Cranfill, AKJ/NALCO and Dave Undlin, Crown Products. The morning drew to a close and it was time to get on the buses for the tours.

First stop- Basin Electric’s Dry Fork Station and the Wyoming Integrated Technology Center. We were welcomed by Tom Stalcup, the plant manager and our tour guide. Dry Fork Station is a 385MW coal-fueled power plant with pulverized coal technology. The plant is equipped with low NOx burners, an activated carbon injection system and has a backend fluidized bed scrubber and a fabric filter baghouse. Wyoming Integrated Test Center Public-private partnership developed an Integrated Test Center (ITC) with the site hosted by Basin Electric. The ITC provides space for researchers to test carbon capture technologies utilizing a 20MW flue gas slipstream from Basin’s Dry Fork Station.

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Next stop- BNSF’s Donkey Creek Yard. Jason Plett was our knowledgeable tour guide. Donkey Creek is a multipurpose yard located 12 miles east of Gillette Terminal on the Black Hills Subdivision. The yard has multiple tracks both through and sub-tracks used for filling trains, sitting out bad orders, repairs, etc. At tour’s end, the group gathered at the Gillette Community College for dinner and networking.

Thursday morning was a mine tour with Jamie Torske at Arch’s Black Thunder Mine. She began with a safety briefing and history of the mine. We donned our safety gear and loaded the vans for the experience. We were fortunate to have the deluxe tour allowing us to go into the pit, enter the cab dragline, and view the loadout and the topping spraying facility.

Thank you to all attendees, presenters, tour guides and coordinators. We could not have done it without you! s

Dave Undlin

Ryan Burdick and Zachary Leingang

BNSF Donkey Creek Yard

Corporate Headquarters: 748 T-7 Rd. P.O. Box 3001 Gillette, WY 82717 307.687.6000 Colorado Office: 385 Interlocken Crescent Suite 400 Broomfield, CO 80021

Mark Kinney

Tim Bishop

Jamie Torske, Bill Luther, Mike Kissinger, Amy McBrayer and Kevin Johnson

Scott Yaeger

Observing boiler combustion

Providing low-sulfur, high-quality subbituminous coal. We deliver on quality, with a vision for the future. www.cloudpeakenergy.com COAL TRANSPORTER | 25

Surface Transportation Board / Update

Surface Transportation Board Update

A

Thomas W. Wilcox, GKG Law, P.C.

s 2019 began the Surface Transportation Board started its work with only one member out of its allotted five; Chairman Ann Begeman. This inauspicious start to the New Year was due to the United States Senate failing to confirm three new Board members who had been vetted and approved for service as Board members in mid-2018: Patrick J. Fuchs, Michelle A. Schultz, and Martin J. Oberman. It was also due to the one year holdover term of Vice Chairman Deb Miller expiring at the end of 2018 and her not being re nominated by the Trump administration before the end of the 115th Congress. What’s more, Chairman Begeman was literally the only person in the STB offices for several weeks in 2019, as the STB was closed as part of the partial government shutdown that began on December 22, 2018 and ended on January 25, 2019. The Chairman was there answering phones and in case of emergencies requiring the STB’s attention.

On January 2, 2019, the Senate finally confirmed Fuchs and Oberman, and Chairman Begeman received permission from the White House to swear them in on January 17 and January 22, respectively. On January 30, Mr. Fuchs was named Vice Chairman of the STB. As for the two vacant Board seats, Ms. Schultz, a republican, despite being fully vetted and ready for confirmation since April 2018, had to be re nominated at the beginning of the 116th Congress and begin the process all over again. This was reportedly because the Senate was waiting until the final Board position reserved for a democrat is filled by either Ms. Miller or a new candidate. Ms. Shultz was re nominated on January 16, 2019, but no confirmation hearings have been scheduled for her or other nominees. Former Vice Chairman Miller has not yet been re nominated and would also have to go through the vetting and hearing process again. An introduction to the three new Board members is provided below:

Patrick J. Fuchs

Patrick J. Fuchs, 30, was most recently employed as a senior professional staff member on the Senate Committee on Commerce, Science, and Transportation, where he was very active in the development and enactment of several pieces of major railroad legislation, including the STB Reauthorization Act of 2015. He was also a policy analyst and Presidential Management Fellow at the Office of Management and Budget, where he managed railroad and maritime regulatory reviews. His educational background is in economics and political science, and he earned a Masters in Political Administration from the University of Wisconsin. Mr. Fuchs is known to be very data oriented and very knowledgeable about the railroad industry, primarily in the agricultural and chemical industries, but also passenger rail service.

26 | COAL TRANSPORTER

Martin J. Oberman

Martin J. Oberman, 73, comes to the STB after a career as a trial and appellate lawyer in Chicago, Illinois for nearly 50 years. He also served on the Chicago City Council for 12 years, and for several years was Chairman of Metra, Chicago region’s commuter railroad Metra. He attended Yale University and the University of Wisconsin Law School.

Michelle A. Schultz Michelle A. Schultz also most recently comes from a commuter rail background as deputy general counsel for the Southeastern Pennsylvania Transportation Authority (SEPTA). Previously, she was an attorney for the Philadelphia-based law firm of White and Williams, dealing with bankruptcy and commercial litigation, and a law clerk with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania. Schultz earned an undergraduate degree in English from Penn State, a master’s degree in government administration from the University of Pennsylvania, and a law degree from Widener University. Her husband, James. D. Schultz, served as associate White House counsel to President Trump from January 23, 2017 to November 2017.

MAJOR POLICY ISSUES AWAIT

The new Board members will inherit a sizeable backlog of important policy matters and proceedings that were shelved

by Chairman Begeman when she was appointed in early 2017, reasoning that action on policy matters should only be taken after consideration by the full five-member Board approved

by Congress. At that time the belief was that she would not have to wait long for the President and Senate to act. However, maintaining this position for all of 2017 and 2018 while the nominations languished has resulted in uncertainty and frustration on the part of industry stake holders. Due to the fact that there will now be even further delay in having all

five Board members in place, Chairman Begeman has recently indicated that the Board as constituted will resume work on all matters before it, including major policy matters. There are primarily three major policy and regulatory initiatives that have been on hold for some time:

Review of and Modifications to Rate Reasonableness Rules.

A large majority of rail shippers believe that the Board’s current rules for determining maximum reasonable rates are broken.

This view has been expressed by rail customers for many years, and it is supported by the lack of complaints filed challenging rates under any of the current methodologies despite widespread high freight rates in all commodity groups. The Board began a series of proceedings five years ago to modify its procedural rules aimed at making processing a case less onerous, and it made slight modifications to some of its substantive rules. Some of the changes were commanded by Congress, and some were developed by the Board. But for the most part the Board has yet to propose any significant modification to its rate reasonableness rules, particularly the rules for analyzing rates under the Stand Alone Cost test.

In January 2018, the Board created a Rail Rate Reform Task Force for the purpose of “developing recommendations to reform and streamline the Board’s rate methodology for large cases, and to determine how to best provide a rate review process for smaller rate cases.” In 2018 the RRTF sought and received a wide range of input from industry stakeholders and has reportedly engaged in substantial internal deliberations on a variety of substantive ways to modify the existing rules to make them more useful and accessible.

“... rail shippers believe that the Board’s current rules for determining maximum reasonable rates are broken.”

COAL TRANSPORTER | 27

EP 711 (Sub - No. 1), Reciprocal Switching The original Petition for Rulemaking filed by the National Industrial Transportation League proposing new rules governing “competitive switching” was filed July 7, 2011 in STB Docket EP 711. The petition proposed a means to amend the existing rules governing competitive access set forth at 49 C.F.R. §1144 and §1145 and to overturn older agency precedent which was so restrictive it had resulted in no party seeking access to another railroad via reciprocal switching or terminal trackage rights outside of the rail merger context for over 30 years.

On July 27, 2016, the Board granted the petition in EP 711 in part and published proposed rules in a new sub-docket, EP 711 (Sub-No.1) that would govern requests for reciprocal switching in certain circumstances. Between the two dockets, a voluminous administrative paper record was developed by the Board over a six-year period. Moreover, in 2017 and 2018 the STB and its staff participated in numerous meetings with industry stakeholders on the rulemaking after a change in the Board’s rules prohibiting ex parte communications on pending rulemaking proceedings. However, no further action has been taken on the rulemaking.

EP 722, Revenue Adequacy Beginning in 2014, the Board began a series of proceedings to take comments on various aspects of railroad revenue adequacy. Very generally defined, a railroad is considered “revenue adequate” by the Board if its revenues exceed its cost of capital. While there has always been controversy over the Board’s formula for determining whether a railroad is revenue adequate, even by that formula most of the Class I railroads have been found to have consistently achieved that status for multiple consecutive years.

Consequently, establishing the appropriate regulations and policies to apply to revenue adequate railroads have become more significant because (1) many provisions of the Staggers Rail Act of 1980 – most notably the provisions empowering railroads to charge shippers without transportation alternatives higher rates

28 | COAL TRANSPORTER

“The Board’s policies regarding the regulation of revenue adequate railroads, particularly rate regulation, are presently far from clear.” up to a maximum reasonable rate - were based in large part on the premise that such “differential pricing” was needed to help railroads achieve revenue adequacy; and (2) once revenue adequacy has been achieved for a particular railroad its need to differentially price arguably diminishes, if not disappears altogether.

However, the Board’s policies regarding the regulation of revenue adequate railroads, particularly rate regulation, are presently far from clear.

Among other things, clarification of these policies and applicable rules could result in the Board’s existing rate reasonableness methodologies (Stand Alone Cost, Simplified Stand Alone Cost, and Three Benchmark) being substantially simplified or even completely replaced with a rate reasonableness standards that take into account the defendant’s revenue adequate status. In addition to seeking written comments, the Board held public hearings on revenue adequacy-related issues in July 2015. It closed the paper administrative record August 18, 2015. However, on March 18, 2018, after the change to the ex parte communication rules, the Board included the issues in EP 722 among the topics that could be discussed with the Rail Rate Reform Task Force.

NEW ISSUES PRESENTED BY “PRECISION SCHEDULED RAILROADING” IMPLEMENTATION

In addition to these and other policy matters pending before it, the Board in 2019 is faced with a significant new policy and regulatory issue: whether and how to regulate the simultaneous efforts of multiple Class I railroads to implement massive changes to their operating and service plans in order to reduce their operating ratios and increase shareholder value. Currently, Union Pacific Railroad, Norfolk Southern Railway, and CSX

Transportation are all in various stages of some version of so-called “precision scheduled railroading,” an aggressive and dramatic program pioneered by the late Hunter Harrison that aims to reduce operating ratio and boost revenues and stock prices through the cutting of railroad personnel, assets, and equipment, combined with drastic changes in traditional railroad service operations.

The prior effort of Canadian Pacific Railway to implement these changes, and the early stages of CSXT’s efforts in 2017 – both spearheaded by Mr. Harrison as Chief Executive Officer - resulted in the railroads achieving efficiencies, but also caused widespread service failures, lost production and plant shutdowns, and economic harm to rail shippers. So far in 2019, the efforts of UP, NS, CP and CSX to implement some version of “precision scheduled railroading” have resulted in the railroads achieving their desired goal of lower operating ratios, higher revenues, and efficiencies. However, some of the measures the railroads have taken to achieve these results raise regulatory and policy issues that the STB may be asked to consider, such as the reasonableness of: • Directing a customer to make significant changes to established operating arrangements and course of dealing on short notice, subject to significant monetary penalties in the event of non-compliance; • Substantially increasing existing accessorial charges and adopting numerous new and costly accessorial charges.

• Unilaterally terminating unit train service for certain commodities and to certain locations after customers have made significant capital investments to accommodate the railroad’s prior requirement that service would only be provided in unit trains.

• Adopting significantly more stringent car storage and demurrage policies and higher charges on short notice, resulting in significantly higher demurrage and storage invoices for shippers who operationally cannot comply with the new terms.

• Unilaterally reducing the days on which the railroad will agree to provide service to a facility.

The absence of reciprocity, meaning that a rail customer is afforded no relief if it has difficulty complying with the railroad’s tariff terms but the railroad has no liability to the customer if its behavior contributes to the failure to comply, or if the railroad does the same thing it is penalizing the shipper for but suffers no consequences.

The Board has already indicated it is uneasy with the current industry environment. In November 2018 Chairman Begeman expressed to UP

“The absence of reciprocity, meaning that a rail customer is afforded no relief if it has difficulty complying with the railroad’s tariff terms but the rail-road has no liability...” and NS her concern about their recent announcements of changes to their tariffs governing demurrage and accessorial charges and asked them to evaluate their respective planned changes from the standpoint of commercial fairness and reciprocity. She subsequently followed up this statement of concern with letters to all the Class I railroads on December 17, 2018 requesting each to provide the Board by the end of January with their quarterly revenues from demurrage and accessorial charges for 2018 and 2019. The data was submitted and is posted on the STB’s website.

In summary, the STB at some point in 2019 will be composed of five Board members for the first time

in many years. Unless Ms. Miller is reappointed and confirmed, four of the Board members will be new to the job. The newly constituted Board faces a myriad of important policy and regulatory issues at a critical juncture of the long history of the U.S. railroad industry, and of the U.S. economy as a whole for that matter. s Thomas W. Wilcox is a principal of GKG Law, P.C., located in Washington, D.C. who has represented rail shippers of coal and other commodities for over 28 years on rail transportation matters. The views expressed in this article are those of the author.

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BLOCKCHAIN Blockchain 201 / Applications

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

Q

uite a bit has happened in the world of blockchains since we authored Part I of this series in July 2018. On the one hand, cryptocurrency prices have descended from their stratospheric heights amid skepticism from all directions. On the other hand, a steady drumbeat of perseverant efforts continues to march towards the integration of distributed ledger technology (“DLT”) into everyday business processes. In this Part II, we focus on the work currently afoot to harness DLT for greater transparency, efficiency, and security in energy and commodities trading, shipping and supply chains. We are currently aware only of limited attempts to utilize DLT in coal trading or transportation within the U.S., but these related industries seem to be pointing the way forward. In closing, we offer some conclusions as to what may lie in store for 2019 and beyond. Overall, DLT may have its challenges, but its momentum in the industries we surveyed indicates that it is more than a passing phase.

APPLICATIONS OF DLT IN COMMODITIES, SHIPPING AND LOGISTICS A wide range of market participants—from startups to consortia of established players—already have sought to apply DLT in commodities trading and finance, shipping and logistics.

30 | COAL TRANSPORTER

201

A recent survey by Boston Consulting Group determined that venture capitalists alone have invested approximately $300 million in startups developing DLT-based applications in logistics and transportation since 2013, including $53 million in shipping, freight management, and related platforms.1 Some of those applications are currently in use, while others remain in development. But in each case, these applications seek to improve existing processes with the efficiency and security that DLT can potentially provide. For example, international shipping line Maersk tracked a container of roses and avocados in 2014 as it moved from Kenya to its destination in Europe.2 Maersk determined that almost thirty persons or organizations played a role in processing the shipment.3 The shipment required thirty-four days, which included ten days waiting for a single document to be located in a stack of papers.4 Given the continuing enthusiasm for DLT, we are unable to cover the full spectrum of proposed uses here. But below, we describe some of the most interesting ones, including examples that are currently operational. If successful, we would expect to see similar uses of DLT in the future for U.S. coal trading and transportation.

Commodities Trading and Finance VAKT VAKT is a consortium of energy majors, independent traders and international banks that is currently using DLT to support the post-trade processing of physical oil trades. The original nine investors in VAKT included oil majors, international trading companies and financial institutions. The platform went live in November 2018, supporting crude oil transactions related to five North Sea oilfields. In January 2019, VAKT announced that it had added as investors three additional global participants in the oil industry. According to VAKT’s website, the platform uses DLT to reconcile trade data, share digital documents and manage trade logistics and settlements, including the “full post-transaction lifecycle.” Once the parties agree to a trade, they enter transaction details into the system; those trade details flow to a shared leger; and once trades are matched, the system establishes a single source

of truth with respect to each transaction. Users can nominate banks to provide trade finance based on the blockchain, permit inspectors and shippers to enrich trade data and submit additional documents, and share invoices.

In the future, VAKT expects to permit parties to enter into smart contracts, to exchange payments with digital tokens, and to integrate with all physically traded energy markets, including U.S. crude oil pipelines and Northwest Europe refined product barges. VAKT projects that the first use of its platform by nonconsortium licensees will occur in early 2019.5

Komgo Komgo, a consortium involving several international banks and trading companies, announced that the first transaction on its platform took place in December 2018. The consortium currently has fifteen members, including a major oil company, international trading companies, and several global financial institutions.

It aims to streamline trade and commodity finance through two products: the issuance of digital letters of credit, which product is now available and in use by at least some members, and a KYC solution, which is expected to become available in January 2019. The digital letter of credit process allows parties to submit trade data and documents to their banks electronically; the KYC solution will use DLT to “standardize and facilitate” the KYC process without storing documents in a centralized database.6 In the future, Komgo aims to develop a smart contract solution that would allow parties to match on the platform, to institute a receivables discounting function for financing purposes, and to allow users to procure insurance coverage. Komgo has integrated its platform with VAKT, described above.7

Enerchain The Enerchain Project, founded in 2016 by information technology service provider Ponton and a growing coalition of major participants in the European power and gas market, offers a decentralized, autonomous market for physical gas and power trading in Europe using DLT. The platform has been designed to permit parties to trade directly without intermediaries, and thereby optimize trading, minimize transaction fees, and improve settlement and clearing. Over forty market participants, including utilities, producers and traders, have joined the platform.8 According to one source, the platform is currently operational but (due to regulatory concerns) only with respect to “arranged trades,” as opposed to “regular trading,” but the platform is preparing for its next “phase,” which it expects to occur during 2019.9

“The platform has been designed to permit parties to trade directly without intermediaries, and thereby optimize trading, minimize transaction fees, and improve settlement and clearing.”

Trade Finance

Four major platforms have emerged that use DLT with respect to trade finance.

Voltron Voltron is a group of twelve banks from the “R3” consortium that intends to use DLT to digitize letters of credit. Voltron estimates that its system can cut paperwork time from as much as ten days to one day by streamlining the issuance of letters of credit and the presentation of necessary documentation. The platform conducted a successful pilot in May 2018. Voltron is currently inviting additional parties to join its network, considering additional new features, and targeting an official launch date in 2019.10 Voltron was developed using the R3 Corda blockchain, an open source solution that was designed to promote interoperability between platforms.11

we.trade This platform targets exporters in Europe with respect to open account trade finance.12 It is backed by a coalition of thirteen international banks, and uses IBM’s Blockchain Platform as well as additional technology from the Linux Foundation13.

The platform launched in July 2018 and relies upon DLT and smart contracts to achieve the advantages described above and in Part I. This technology establishes the security of the ledger, creates trustless relationships in international trade, and thereby minimizes the diligence necessary to vet a counterparty. It also aims to increase efficiencies in information flow and payment processing.14

Marco Polo Marco Polo is an electronic trade finance platform for financial institutions and entities involved in international trade. It provides payment commitment solutions like guarantees and open account finance solutions like receivable discounting and factoring.15 TradeIX and R3 are partners in the platform, the members of which also include nine international financial institutions. Among other innovations, the platform uses DLT as a single source of truth for trade finance transactions, and seeks to improve upon the antiquated, paper-based procedures COAL TRANSPORTER | 31

that still characterize the industry. Like many of the other platforms described herein, Marco Polo intends to provide better access to trade data, better data security, and effective means of sharing such data among banks and logistics providers. Its system will permit banks to check financing and credit risk rules automatically and process transactions more expediently.

Parties will thereby have better, quicker and cheaper access to trade finance, and use trade data from the platform to reconcile invoices and shipment tracking information. Like Voltron, Marco Polo stores data on the Corda R3 blockchain, which promotes interoperability.16

Batavia Batavia is a fourth platform that uses DLT to facilitate open account trade finance and letters of credit. Its members currently include two banks, with IBM as the technology partner. Like the other platforms above, Batavia seeks to enhance the transparency and efficiency of international trade. Pilot transactions using the platform were conducted in early 2018.

Much like the others above, the platform establishes a single version of all necessary documentation with respect to a transaction, and shares that information with the parties to such trade and other relevant players. The platform thus provides all such parties with the information they need to complete the transaction, which includes the closing of trade agreements and smart payments that occur automatically upon the occurrence of events. Batavia estimates that it can significantly shorten the time necessary for a seller to receive payment for goods shipped to a buyer.17 In a potential setback, however, three former members of the consortium joined we.trade as of October 2018, and Batavia is subject to rumors regarding possible mergers with another platform.18

32 | COAL TRANSPORTER

INTERNATIONAL CONTAINER SHIPPING

Three major consortia have initiated the use of DLT in international container shipping. Much like the commodities trading and trade finance platforms described above, these competing consortia have wagered that DLT can provide greater transparency, security and efficiency in international freight.

TradeLens.

TradeLens launched in August 2018, and announced its commercial availability in December 2018.19 A partnership between IBM and container shipping line Maersk, the platform seeks to make international container shipping more efficient by using DLT and by permitting interactions between the blockchain and the “Internet of Things” or “IoT” (including, for example, sensors to determine the temperature and weight of shipping containers).20 It allows the tracking of arrival times of vessels and container “gate in,” and produces automated shipping documents like customs releases, commercial invoices and bills of lading.21 The TradeLens website indicates that it has tracked approximately 300 million shipping events thus far.22 Through DLT, it serves as a single, secure repository for such information and documents,23 and attempts to foster collaboration between ocean carriers, rail providers, truckers, terminal operators, beneficial cargo owners, freight forwarders, non-vessel operating common carriers, and customs authorities.24 The members of TradeLens include at least ninety entities involved in international trade, like large shippers Torre/Camposol and Umit Biskilet, and 234 global gateways.25 TradeLens has received criticism regarding its neutrality, however, because (other than Maersk) its members include only a single major international carrier, Pacific International Lines.26 To combat this criticism, TradeLens is using open source architecture and actively recruiting a broad cross-section of members.27

Global Shipping Business Network A new consortium of ocean carriers and terminal operators announced in November 2018 their intent to develop the “Global Shipping Business Network,” a DLT-based platform to streamline international container shipping. Members include carriers CMA CGM, Cosco Shipping, Evergreen Marine, and Yang Ming; port operators DP World, Hutchison Ports, PSA International, and Shanghai International Port; and CargoSmart, a provider of shipment management software owned by Cosco Shipping. The consortium seeks to provide the “top down” data that others can use in their business relationships rather than provide “bottom up” individual solutions.

It is specifically considering the need to develop international standards for container shipping processes and interoperability with other platforms.28 A press release in November 2018 stated that its first pilot application, which would allow parties to digitize their dangerous goods documents and hasten the receipt of necessary approvals, would be available in December 2018.29

AB InBev, APL, Kuehne + Nagel, et al.

In early 2018, a consortium of AB InBev, APL, Kuehne + Nagel and an international consulting firm announced that, along with an unnamed European customs agency, it had tested a DLT-based solution to eliminate paper-based shipping documents in international trade. The coalition estimates that typical shipments of retail or consumer goods generate more than twenty documents in order to transport the goods from the exporter to the importer, and that such documents often replicate up to seventy percent of the information therein. Streamlining this process—including by removing the need for manual data entry, simplifying the amendment of documents, and reducing exposure to customs compliance penalties—could thus save hundreds of millions of dollars annually.30

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OTHER SUPPLY CHAINS AND LOGISTICS

Established incumbents and startup companies alike have proposed a wide range of new uses for DLT in supply chains.

• ShipChain, a U.S. startup, has created a solution that uses DLT to track and trace a product from its source to its ultimate destination, including all modes of freight. The ShipChain system ultimately will be able to track information throughout the supply chain, including information gathered from the IoT, like the time a pallet reaches its destination, or the temperature and humidity of a container. The system enables smart contracts that settle in “SHIP” tokens upon the occurrence of a required event.31 In 2018, ShipChain’s initial offering of SHIP tokens raised approximately $30,000,000.32 In January 2019, ShipChain announced its full product launch.33 • CargoX, a startup in Slovenia, has developed a DLT-based bill of lading solution, and recruited freight forwarder Fracht AG. Its platform is not associated with a particular carrier, which creates an appearance of neutrality, and employs open source software to facilitate interoperability with other platforms.34 • CargoSmart, a software company and member of the Global Shipping Business Network, has devised a shipping documentation platform that employs DLT to enable users to execute bookings, share multiple carrier shipping information, track shipments and print invoices.35 • 300 Cubits, based in China, built a booking deposit module that employs DLT and digital tokens that it refers to as “Bitcoin for the shipping industry.”36 • A startup from Singapore called BlocBox recently unveiled a DLT-based system to collect and secure data from airplane black boxes and maritime voyage data recorders. Tracking and tracing lost cargoes using the company’s system could be less expensive and more secure than manually retrieving the necessary data.37 • Global diamond company DeBeers has developed Tracr, an industry-wide system to track the provenance of diamonds using DLT. The solution aims to collect and securely encrypt provenance information, foster efficiency at a host of points in the supply chain, and promote confidence in the diamond industry.38 • IBM, Ford, Huayou Cobalt, LG Chem and RCS Global recently announced that the group will use DLT to “trace and validate ethically sourced minerals” for the automotive and consumer electronics industry, including cobalt, a critical component in lithiumion batteries.39 A pilot program already is underway using blockchain to create an “immutable audit trail” for cobalt purchased from Huayou’s mine in the Democratic Republic of Congo.40 The group expects the pilot to be complete by mid-2019.41 • Ambrosus, another startup, has built a DLT-powered IoT network to track and trace food, pharmaceuticals, high-value products like specialized parts for aviation or electronics, and commodities. Its system permits detailed analysis of secure data, tracks shipments throughout the supply chain, provides secure data regarding product quality, and prevents fraud through an immutable blockchain. The system permits settlement or collateralization of transactions using its “Amber” tokens and smart contracts. The Ambrosus website specifically mentions that its Ethereum-based system promotes interoperability with other blockchains.42 34 | COAL TRANSPORTER

CONCLUSIONS

DLT appears to have outgrown the days when traders dreamed of “Lambos on the moon.”43 Large incumbents in the commodities, financial services and shipping industries—alongside smaller startups—are proposing DLT-based solutions to accomplish a range of objectives. One common theme among those objectives is the elimination of manual and paper-based processes. If the proposed applications of DLT can make information available in a quick, transparent and secure manner, and save time or money for parties involved in international trade, those parties may be willing to discard established practices and adopt these new solutions.

Nevertheless, the adoption of DLT continues to face headwinds. Boston Consulting Group’s recent survey of transportation and logistics executives learned that eighty-eight percent of the respondents believe that DLT will disrupt the industry to some extent.44 Seventyfour percent of those same respondents, however, stated that they were exploring DLT only superficially, or have not considered DLT at all.45 These inconsistent results illustrate the confusion that still plagues DLT. Indeed, many have questioned the utility of private, or “enterprise,” blockchains. In such systems, like all the ones described herein, a centralized entity or group of entities determines the parties that can participate in transactions as well as the transactions

COAL TRANSPORTER | 35

that ultimately become part of the ledger. Such systems contrast markedly with DLT applications like Bitcoin, which relies on a public ledger that is not subject to any centralized administration. To the extent that the benefits of DLT derive from decentralization, private blockchains may not be able to achieve the radical transparency that originally animated DLT enthusiasts.

Administrators of private blockchains also will need to act judiciously in order to maintain confidence in their ledgers.

Similarly, concerns about the neutrality of such an enterprise platform may deter competitors of the founding consortium from using the platform, especially given sensitivities about the confidentiality of data that is uploaded to the ledger. Of the industries surveyed here, this concern appears to be most prevalent

1 A ndrew Schmahl, Sanjaya Mohottala, Kaj Burchardi, Camille Egloff, Jacqueline Govers, Ted Chan, and Markos Giakoumelos, “Resolving the Blockchain Paradox in Transportation and Logistics,” https://www.bcg.com/ publications/2019/resolving-blockchain-paradoxtransportation-logistics.aspx (last visited Feb. 2, 2019).

in international container shipping. This concern is particularly problematic where a proposed system requires scale to attain the benefits of DLT, like systems for KYC compliance, the value proposition of which depends directly on the availability of many potential trading partners.

Due to these concerns, interoperability has emerged as a key issue for the integration of DLT. If a particular DLT-based system is not interoperable, several factors may cause a party to hesitate before adopting that system. For example, transactions on that system might be difficult to enforce upon an event affecting the administrator, such as an insolvency; if that system is interoperable, however, parties could simply move their transactions to a different system. Also, users might not be capable of novating a transaction to a party that uses a different system, or

17 F abio Keller, “Blockchain-based Batavia platform set to rewire global trade finance” (April 19, 2018), https://www. ibm.com/blogs/blockchain/2018/04/blockchain-basedbatavia-platform-set-to-rewire-global-trade-finance/.

a merger or other corporate transaction might be delayed if an acquirer does not participate in the same platform as the target. Therefore, platforms that develop with an eye to interoperability between blockchains may have an advantage in luring potential users off the sidelines.

Indecision over which system to use, or which consortium to join, could keep potential users on the sidelines until the proverbial dust settles. But—like the chicken and the egg—the dust may never settle until DLT-based solutions reach the necessary scale.

In any event, progress may be slow and inconsistent, but DLT is gaining momentum in industries that can take advantage of its potential benefits. It remains to be seen whether those potential benefits are available in the U.S. coal industry, but time will tell. s

32 E Rock Christopher, Newswire.net (Mar. 5, 2018), http:// newswire.net/newsroom/news/00100355-how-shipchainuses-the-blockchain-to-disrupt-the-transport-and-logisticsindustry.html.

18 M orris, supra n. 12; also see, Nicky Morris, “Trade finance 33 “The Dispatch Report + Full Product Launch,” Shipchain. blockchain consortia: merge or interoperate?,” LedgerInsights. io (Jan. 23, 2019), https://blog.shipchain.io/the-dispatch2 K yunghee Park, “Blockchain is About to Revolutionize the com, https://www.ledgerinsights.com/trade-financereport-full-product-launch-january-2019-issue-no-10/.

Shipping Industry,” Bloomberg (April 18, 2018). blockchain-merge-interoperate/ (last visited Feb. 2, 2019).

34 Vishnu Rajamanickam, “CargoX introduces an open and 3 Id. 19 Mike White and Marvin Erdly, “TradeLens: A Journey from Beta neutral blockchain platform for the maritime industry,” to Production in One Year” (Dec. 11, 2018), Tradelens.com, FrieghtWaves (Nov. 14, 2018), https://www.freightwaves.

4 Id. https://blog.tradelens.com/blog/ga (last visited Feb. 2, 2019). com/news/technology/cargox-blockchain-smart-open5 VAKT.com, https://www.vakt.com/ (last visited Feb. 2, 2019). neutral-platform.

20 E ric Johnson, “IBM-Maersk blockchain effort builds with 6 Komgo.com, https://komgo.io/komgo-blockchain-platformnearly 100 users,” JOC.com (Aug. 9, 2018), https://www.

35 CargoSmart.com, https://www.cargosmart.com/en/ for-commodity-trade-finance-goes-live/ (last visited Feb. 2, joc.com/technology/ibm-maersk-blockchain-effort-buildsplatforms/application.htm (last visited Feb. 2, 2019).

2019). nearly-100-users_20180809.html.

36 300Cubits.tech, https://300cubits.tech/ (last visited Feb. 7 Id. 21 Id. 2, 2019).

8 Enerchain.ponton.de, https://enerchain.ponton.de/index.php 22 Tradelens.com, https://www.tradelens.com/ (last visited Feb. 37 Vishnu Rajamanickam, “Blockchain’s relevance in track-and(last visited Feb. 2, 2019).

2, 2019). trace across aviation and maritime industries,” FreightWaves 9 Icis.com, https://www.icis.com/explore/resources/ (Jan. 11, 2019), https://www.freightwaves.com/news/ 23 White et al., supra n. 19. news/2019/01/18/10307703/next-phase-of-blockchainblockchain/blockchains-relevance-in-track-and-trace24 Tradelens.com, https://www.tradelens.com/ecosystem/ (last project-approaching/ (last visited Feb. 2, 2019). across-aviation-and-maritime-industries. visited Feb. 2, 2019).

10 Henry Vilar, “Voltron preps launch of documentary trade 38 Tracr.com, https://www.tracr.com/#tracr-questions (last 25 Id. on R3’s Corda,” Fintech Futures (Oct. 23, 2018) https:// visited Feb. 2, 2019). www.bankingtech.com/2018/10/voltron-preps-launch-of26 I an Allison, “IBM and Maersk Struggle to Sign Partners 39 “Ford Motor Company, Huayou Cobalt, IBM, LG Chem and documentary-trade-on-r3s-corda/. to Shipping Blockchain,” Coindesk.com (Oct. 26, 2018), RCS Global Launch Blockhcain Pilot . . . ,”IBM.com, https:// https://www.coindesk.com/ibm-blockchain-maersk11 Richard Brown, “Universal Interoperability: Why Enterprise newsroom.ibm.com/2019-01-16-Ford-Motor-Companyshipping-struggling .

Blockchain Applications Should be Deployed to Shared Huayou-Cobalt-IBM-LG-Chem-and-RCS-Global-LaunchNetworks,” Medium (Apr. 5, 2018) https://medium.com/ 27 Supra n. 20.

Blockchain-Pilot-to-Address-Concerns-in-Strategic-Mineralcorda/universal-interoperability-why-enterprise-blockchain- 28 Eric Johnson, “New blockchain consortium rivals IBMSupply-Chains (last visited Feb. 2, 2019). applications-should-be-deployed-to-shared-3d4daff97754.

Maersk’s TradeLens,” JOC.com (Nov. 6, 2018) https://www. 40 Id. 12 Nicky Morris, “Trade finance blockchain consortia: how they joc.com/technology/new-blockchain-consortium-rivals-ibm41 Id. differ,” Ledger Insights, https://www.ledgerinsights.com/trademaersk%E2%80%99s-tradelens_20181106.html.

42 Ambrosus.com, https://ambrosus.com/ (last visited Jan. finance-blockchain-consortium/ (last visited Feb. 2, 2019).

29 “Top Ocean Carriers and Terminal Operators Initiate 28, 2019).

13 We-trade.com, https://we-trade.com/ (last visited Feb. 2, 2019).

Blockchain Consortium,” CargoSmart.ai (Nov. 6, 2018), https://www.cargosmart.ai/en/blog/top-ocean-carriers-and- 43 See, e.g., Wong, Joon Ian, “Ethereum traders joke about 14 IBM.com, https://www.ibm.com/case-studies/wetradebuying ‘Lambos,’ but Lamborghini just reported record terminal-operators-initiate-blockchain-consortium/. blockchain-fintech-trade-finance (last visited Feb. 2, 2019). sales,” Quartz (Jan. 15, 2018), https://qz.com/1180009/as30 S ee, Kuehne-Nagel.com, (Mar. 15, 2018) https://newsroom.

15 Morris, supra n. 12. the-ethereum-price-has-soared-so-have-lamborghini-sales/. kuehne-nagel.com/kuehne--nagel-applies-blockchain16 M arcopolo.finance, https://www.marcopolo.finance/ (last 44 Schmahl et al., supra n. 1. technology/(last visited Feb. 2, 2019). visited Feb. 2, 2019).

31 S hipchain.io, https://shipchain.io/ (last visited Feb. 2, 2019). 45 Id.

36 | COAL TRANSPORTER

NCTA WELCOMES ITS NEWEST MEMBERS!

T

he Board of Directors of the National Coal Transportation Association is pleased to announce the applications for membership in NCTA of the following coal industry participants were approved.

Member of The PNC Financial Services Group

NCTA Membership List A. Stucki Company AKJ | NALCO Alliant Energy Corporate Services Alltranstek LLC Alpha Natural Resources Alpha Products, Inc. Ameren Missouri American Electric Power Amsted Rail Appalachian Railcar Services, Inc. Arch Coal Sales, Inc. Arizona Electric Power Coop., Inc. Arkansas Electric Cooperative Associated Electric Power Cooperative Associated Terminals LLC Aventics Basin Electric Power Cooperative Blackhawk Mining, LLC Blackjewel C. Reiss Carlile Enterprises, Inc. CDG Engineers, Architects, Planners CIT Rail City Utilities of Springfield Cleco Cloud Peak Energy Colorado Springs Utilities Commtrex CONSOL Energy Inc. Consumers Energy Company Cooper Consolidated CPS Energy Crown Products

CSX Coal & Ore Terminals Dairyland Power Cooperative David J. Joseph Company Detroit Edison Duke Energy Dynegy, Inc. Ecofab USA Empire District Electric Company Entergy Services, Inc. Evergy Exponent, Inc. FirstEnergy Florida Power & Light Company FreightCar America GATX GE Transportation Grand River Dam Authority Great River Energy Greenbrier Companies Hall St. Coal Terminal Hendricks River Logistics High Country Railcar IHS Global Inc. iIRX ILJIN Bearing ART Impala Terminals Burnside, LLC JP Morgan KCBX Terminals Co. Kiewit Mining Group Inc. Kinder Morgan Terminals Levin Richmond Terminal Lexair, Inc. LG&E and KU Energy

Lighthouse Resources, Inc. Locomotive Service, Inc. Lower Colorado River Authority Luminant Energy MEAG Power Metro East Industries, Inc. MidAmerican Energy Company Midland Railway Supply Midwest Industrial Supply, Inc. Miner Enterprises Inc. Minnesota Power MinTech Enterprises Mitsui Rail Capital, LLC Muscatine Power and Water Nebraska Public Power District New York Air Brake Northern Indiana Public Service NV Energy OG&E Electric Services Oglethorpe Power Corp.

Omaha Public Power District Otter Tail Power Company PacifiCorp Peabody Energy Platte River Power Authority PNC Equiptment Finance 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 Power 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 Timken Company Transportation and Logistics Advisors, LLC Transportation Services Inc. TrinityRail Tri-State G&T Association TUCO/NexGen Coal Services Tucson Electric Power Company Wabtec Corporation WEC Energy Group Wells Fargo Rail Westar Energy Western Farmers Electric Western Fuels Association, Inc. Westmoreland Coal Sales Company WestRail a Division of Aero Transportation Products Wolverine Xcel Energy Xcoal Energy & Resources COAL TRANSPORTER | 37

NCTA Scholarship Recipients

2018 Scholarship Recipients The NCTA awarded three college scholarships and one vocational/associates degree scholarship to children of the employees of NCTA member companies at the annual conference in Denver.

Alex Fangman Missouri University of Science & Technology | Aerospace Engineering

Recipient of the 2018 David Laffere Scholarship Award

Alex Fangman is senior majoring in aerospace engineering at the Missouri University of Science & Technology. He plans to graduate in May 2019, after which he hopes to pursue a graduate degree in hypersonics and computational fluid dynamics. Alexis currently work on a research project studying nose-cone geometries in high-speed flows, with the goal of using shape-optimization to improve current designs. He is also the propulsion lead for Missouri S&T’s aircraft design team, Miner Aviation. Last summer, he had the opportunity to intern at Orizon Aerostructures, where he was able to gain hand’s-on experience in the production of military aircraft. Outside of the classroom, he enjoyed playing tennis on Missouri S&T’s club team, hiking, playing piano, participating in intramurals, and hanging out with friends.

Alex was born and raised in Saint Joseph, Missouri. He attended Central High School, where my mother, Laurie, works as a secondary math substitute teacher. His father, Joe Fangman, works for Kansas City Power & Light (subsidiary of Great Plains Energy) as a lineman. He has an older brother, a younger brother, and a younger sister. Whenever their family is together during the holidays, they play a lot of board games; even though they are all competitive, there is always a lot of shared fun and laughter. s Alex is the son of Joe and Laurie Fangman (Kansas City Power & Light)

Jacqueline Janorschke University of Missouri | Science and Agricultural Journalism Jacqueline Janorschke is a junior at the University of Missouri in Columbia studying science and agricultural journalism in the College of Agriculture, Food and Natural Resources. She is a member of Pi Beta Phi Fraternity for women, where she is currently serving as Vice President of Communications. She is also a member of Mizzou Collegiate Farm Bureau and recently finished her year as the Missouri Farm Bureau Ambassador. Interning for the United States Department of Agriculture, Jacqueline learned first-hand how knowledge needs to be shared so rules and regulations are beneficial for agriculturalists and natural resources. Her goal is to work in public relations for an agricultural company, where the need to communicate is challenging and could ultimately change how food is grown and natural resources are consumed.

Jacqueline hails from northwest Missouri, where agriculture is abundant. Until her involvement in the National FFA Organization, Jacqueline was a part of the 98 percent of Americans removed from everyday agriculture. After she began beekeeping as a project for FFA, she learned about the need for those in agriculture and natural resources to communicate their story. When not spending time studying or in school extracurriculars, Jacqueline spends her free time beekeeping and running long distances. s Jacqueline is the daughter of John and Michele Janorschke (Kansas City Power and Light)

38 | COAL TRANSPORTER

Kelly Li Mary Baldwin University | Biochemistry and Mathematics Kelly Li currently attends Mary Baldwin University in Virginia, where she is double majoring in biochemistry and mathematics. She is expected to graduate in December of 2019 at the age of 16, and then going on to attend medical school. She is attending university at such a young age through Mary Baldwin’s Program for the Exceptionally Gifted.

Being fast-tracked into a full college education has granted her the gifts of being able to learn higher-level and challenging material, and being able to work closely with her academic advisors to perform research as a woman in STEM. One of Kelly’s biggest goals is that she can motivate other young women to pursue their dreams in the sciences. However, being placed in a college environment has forced Kelly to become psychologically more mature in a short period of time. She is still adapting to the sudden stress of a heavy workload from her university courses, and trying to fight the slight age barrier that may occasionally block her from forming close friendships and connect with her classmates. In the end, Kelly strongly believes that it is all worth it. Being presented engaging course material at her university has helped her further discover and fuel her passion for learning, and she encourages all teenagers to find their own love of learning by finding new ways to challenge themselves every day.

Kelly currently resides in Roanoke, Virginia, with her mother, who works as a project control analyst at American Electric Power Company. At school, she is a member of the honor society Iota Sigma Pi, and is involved in many campus clubs, such as Mary Baldwin’s chapter of the American Chemical Society, and the Pen & Paper writing club. In her free time, Kelly enjoys swimming, playing the guitar, and spending time with her two dogs, Simba and Maya. s Kelly is the daughter of Lili Xi (American Electric Power Company, Appalachian Power)

Nicole Bivens Pima Community College | Radiologic Technology Nicole Bivens is a sophomore who attends Pima Community College in Tucson, Arizona.

She is studying to be a Radiologic Technologist. It roused her interest when she educated herself on the topic and even more when she actually experienced it in person. Nicole’s goals are to complete her prerequisites next semester while waiting to gain admittance into the Radiologic Technology program. In addition, she will be taking classes through Northern Arizona University to get closer to receiving a Bachelor’s Degree in Radiologic Technology.

Nicole was born in Sierra Vista, Arizona and raised in Benson, Arizona. She has lived there her whole life and proudly graduated from Benson High School. She currently works two jobs; at Dicks Sporting Goods as an Administrative Assistant, and G&F Pizza as a server. It gets a little tough handling school and work but keeping busy is important to her.

She has two older brothers who are each married and have children of their own.

Family is important to Nicole and that was her main reason for staying close to home. s

Recipient of the Associate Degree Scholarship

Nicole is the daughter of Robert Bivens (Arizona Electric Power Cooperative)

Please encourage your college students enrolled as full-time college sophomores or juniors to apply for a scholarship award to be used for their subsequent junior or senior year or your vocational or associate program student with 25 credit hours in their program.

For more information or to download the application visit our website at movecoal.org/scholarships/scholarship-details.

COAL TRANSPORTER | 39

Reflections / Charlie McNeil

CHARLIE MCNEIL In His DNA

By: Caroline Riley

H

e wore an unassuming clementine-orange button down shirt, tucked into his khaki slacks; when he pushed open the lobby’s towering glass door to greet me, I was struck by the juxta-position; but that is Charlie McNeil: a humble man amidst a glimmering empire.

“Caroline?” He asked jovially, extending a tanned hand towards mine. A door swung open to reveal a sun-lit room — his office — befit with shimmering natural rocks, lucky Chinese dragon heads and floor-to-ceiling glass windows, showcasing Denver’s skyline.

“It’s hard to believe how time has gotten away,” McNeil said, referencing his 47-year career. “I started here in Denver with Consol Energy [formerly Consolidation Coal].We worked on various

Rainbow Bridge at Lake Powell with family 40 | COAL TRANSPORTER

coal mining projects throughout the Western United States, from Canada on down to New Mexico. I was only here six months when they transferred me to Pittsburgh, Pennsylvania in the corporate office. We actually built a house [in Denver] on Monaco and Hampden, but we never got to move in.” In Pittsburgh, McNeil worked with Gene Samples, the VP of Consol and the future CEO of Arch Coal, on three underground coal-mines in the upper pan-handle of West Virginia and three coal mines in the Western US and Canada.

Next, McNeil was transferred to Bismarck, North Dakota: “I drove about an hour a day up north, and I was project manager of expanding the Glenharold Mine. We brought in a dragline which we moved out of Canada and got it running right before the UMWA strike that year.

We added all the other equipment to get it from 1.3 million tons a year up to 4 million tons a year. And from that, I became general foreman of the mine.” Consol transferred McNeil back to the Pittsburgh headquarters for corporate planning than

to West Virginia where he worked at the Ireland, Shoemaker and McElroy Mines as the assistant to the president of the division. “Just those mines alone had 2000 employees working underground every day. We developed the first longwall mine for Consol so it was really good handson experience. It was a great trajectory, but being a Colorado native, we had to get west. The mountains, sun and skiing pulled me back.”

McNeil, born in Greeley, Colorado moved to Estes Park when he was six, growing up in “beautiful small-town living.” “I was outdoors a lot, scouting, camping, skiing. I worked for Rocky Mountain National Park for three summers so I drove up Trail Ridge road every day.” In his graduating class of 38, McNeil was Student Body President and an Eagle Scout. A natural STEM student, McNeil majored, at first, in physics at the Colorado School of Mines. However, once introduced to mining, McNeil switched, staying an extra semester to receive his Bachelors of Science degree in Mining Engineering in 1971. “I think, in an economy, you either mine it or grow it; that’s where the basis of an economy begins. I enjoy producing energy today that powers our country.”

At Mines, he, again, served as Student Body President: “We had all the Vietnam war and campus riots going on at that time so I worked a lot

President of Denver Boy Scout Council

with the president of the school but also with other organizations that were trying to get students to settle down,” McNeil recounted. “I thought I might want to run for political office to help direct the country, but I was so involved with my career and business, I never got off that track to pursue politics. When you have financial commitments and personal wealth on the line, you’ve got to pay attention. If I hadn’t had my own business, I might’ve taken a try at that,” McNeil said with a chuckle. McNeil was honored with the Mines Distinguished Achievement Medal in 1998, and he currently serves on the Foundation Board of Governors, the President’s Council and the Guggenheim Society. He was appointed by Governor Hickenlooper to serve on the Board of Trustees. He also serves on the National Advisory Council of the Marriott School of Business at Brigham Young University.

Most notably, during his time at Mines, McNeil met his wife of 47 years, Judy: “When I went to Mines, it was probably 7 or 8% women, you know. So, you had to find your dates outside of the girls at Mines. I met her at a party — she went to University of Northern Colorado— and we dated for a year and a half, then got married,” McNeil said, his face cracking into a sheepish grin at the mention of her name. “She’s very outgoing, very personable and is always volunteering for something. She gets out there, rolls up her sleeves and serves people.”

Judy, a stay-at-home mom and fellow Colorado native, raised their three kids, Ryan, Travis and Kealey. Currently, Judy heavily supports the Guild for the Barbara Davis Center Children’s Diabetes Foundation and served as the Guild President in 2011. She joins Charlie in keeping up with their 10 grandchildren, “making the rounds to soccer games, basketball games, that kind of thing.”

With family ties in Colorado, the McNeils conceded to the pull of home.

McNeil left Consol to return back west.

He ultimately became CEO of Kaiser Coal Corporation, overseeing coal mining operations in Utah, New Mexico and Colorado. When parent Kaiser Steel went into bankruptcy and the company was

Charlie and Judy sold off, he had the dilemma of going back east where he had other coal company offers or “to take a leap of faith and do his [own] thing.” After doing independent consulting work for a short period, he got a call from Southwestern Public Service Company (now a subsidiary of Xcel Energy). They said, “We ended up with a purchase and sale agreement to acquire TUCO back, fold it in, and get Cabet Corporation out of there, but the PUC would not approve the transaction. If we assigned our purchase and sale agreement to you, do you think you can put together acquiring TUCO?’ and I said, ‘Sure, why not?’ And here, 22 years later, I’m still doing it,” McNeil said of his first big entrepreneurial endeavor, his long coal trains still chugging along the railroads through Denver along the Santa Fe Highway. Spurring from his initial success, McNeil would later develop 15 company start-ups inside and outside of the coal business: “I’m a risk-taker. I’ve done well, but I’ve also taken some good losses along the way. Fortunately, my winnings exceed my losses so it’s been very rewarding. But to be an entrepreneur, by definition, you have to be a risk-taker, have the stamina or stomach or whatever you want to call it to take those risks. So I’m rolling the dice.

That’s the spirit of America — the ability to try and succeed.”

McNeil founded and continues to serve as Chairman and Chief Executive Officer of NexGen Resources Corporation, a natural resources company focusing on coal, oil, gas and real estate development. After acquiring TUCO, McNeil developed Section 29 Synthetic Fuel Faculties in West Virginia. He also was a co-founder of Trident Exploration, the first company to commercialize coal bed methane development in the provinces of Alberta and British Columbia, Canada. He later formed NexGen Oil & Gas to pursue COAL TRANSPORTER | 41

horizontal drilling and fracking of shale formations in Colorado, Wyoming and North Dakota.

Through NexGen, McNeil ultimately developed clean coal technology that falls under the Sec-tion 45 Tax Credit; he still maintains 25 facilities across the country reducing NOx and Mercury emissions from coal fired power plants. In McNeil’s career, SOx, NOx, Mercury and PM10 emissions have been lessened by approximately 90%: “NexGen stands for developing the next generation of energy and natural resources,” McNeil said, setting his silver-rimmed reading glasses on the dark mahogany desk. “I like to say I’m always on the forefront of developing new things, on the fringes of the energy business to propel and carry it forward.

I’m always working on the next generation — whatever that may be to sustain our economy, our lifestyle, everything we’re about in this country and to keep freedom alive. I think the key to freedom is having reliable dependable energy.”

Speaking faster, impassioned, McNeil continued: “I very much believe in coal. It’s a very valuable condensed energy source. If it hadn’t been for coal, oil and gas coming forth during the Industrial Revolution 100+ years ago, we wouldn’t have the economy and standard of living we have today. There is a direct correlation between electricity and a population’s standard of living; coal has really been the fuel that’s powered growth over the last 100 years.”

He addressed me by name in-between sentences, seemingly initiating me into the fight: “I think the key thing - the way I’m looking at it, Caroline — is we need to do all we can to get the CO2 levels down to natural gas [levels] in super critical plants. There is still a lot of Department

of Energy money being allocated to research so it’s not a lost cause.”

McNeil was appointed by the Secretary of Energy, Rick Perry, as a Director of the National Coal Council. Its board advises the secretary on the kind of research needed to secure coal’s future; in fact, he was preparing for a conference call the next day to discuss what’s needed to sustain the coal-fired power plants across the United States.

“Some people ask, ‘Why am I involved in politics?’ and I say, ‘[For] all of us in our industry, if you aren’t [involved], you’re going to get crushed. You have to keep educating people and making sure the right regulations and legislations are put in place. I think all of us in the industry need to keep politically involved on a grassroots level, trying to get the right people elected. I don’t think we can sit back and be idle. We need to be on the forefront.”

McNeil spoke extensively about the need for public education: “I know there’s a lot of aversion to coal. You know, coal’s becoming a bad four-letter word.

Even my grandkids say, ‘Grandpa, you’re involved in coal?’ But they’re getting it in the schools — it’s hard. China is at over four billion tons of year in coal consumption, and here, in the US, we’re back down from 1.1 billion tons a year to 750 million tons, the amount when I started in my career 47 years ago,” he said with a sigh. “Education is the top priority - trying to convince everyone that coal and all the work we’ve done to clean it up over the years is still important.

Like I said, we’ve tackled

everything really well other than, now, the CO2 emissions — that’s a really tough issue for us.”

In addition to the National Coal Council, McNeil works with the Colorado Mining Association and is a member of the American Coal Council, Tau Beta Pi Engineering Society, American Energy Society, the Rocky Mountain Coal Mining Institute, the Western Energy Alliance, the Colorado Oil and Gas Association, and, of course, the National Coal Transportation Association. He’s dedicated his career to cleaning up coal, bolstering education and arguing for correct policy: “I’m up for the fight, and I think all of us who have been in this industry as long as I have are up for the fight too. And it is a fight. It’s a matter of educating people and getting them to understand that coal is an important resource to our economy and the viability of our country. The rest of the world will be using coal so why should we impoverish ourselves of its

Trip to Pyramids in Egypt 42 | COAL TRANSPORTER

Campaign Function with President Trump economic advantages when we have so much of it in the United States? It’s so important to our economic competitiveness and base.”

As for the future of coal, McNeil is hopeful, especially so with the Trump Administration in the White House: “My gut feeling is coal is still going to represent about 25% of our energy needs for electrical generation to provide stable base load generation and to back up the wind and solar and renewables that are out there.”

Regarding the future of his company, NexGen, McNeil is keeping it within the family: “My two sons and my son -in-law work with me here on the business so it keeps all my 10 grandkids here in town — that’s the way to do it.

My oldest son, Ryan, is Vice President of Land in our NexGen Oil and Gas Group so he does all the land work — working with landowners and the federal government on leasing. My second oldest son, Travis, heads up our real estate division so he has his broker license. Clayt, my son-in-law, is President and CFO — he’s a really good financial guy— and I’m Chairman and CEO.” When I inquired about retirement, McNeil smiled: “I’ll always be around as a mentor and a rain maker. But I want to get to the point where I don’t need to be here every day.” However, as I stared down his overwhelming resume on my lap, I sensed he wasn’t prone to slowing down.

When he’s not solving carbon sequestration conundrums or communicating with Congress, McNeil dedicates his spare time to helping others, alongside his wife. Charlie and Judy were honorees for the Arapahoe

Trip to Antarctica

House “Pillars of the Community,” the Arapahoe House “Ruston Award,” honorees for the 25th Anniversary Children’s Diabetes Foundation “Carousel Ball,” and Cherry Hill Village 2010 “Villagers of the Year.” Charlie actively serves the Mountain States Employers Council Board, Craig Hospital Foundation Board, Common Sense Policy Roundtable Board, Arapahoe House for Substance Abuse Board, Sewall Childhood Development Center, Kempe Foundation for Abused Children, the Denver Center for the Performing Arts, the Steamboat Institute Board and their church, The Church of Jesus Christ of Latter-day Saints— their religious belief motivating much of their service efforts: “Serve your fellow man, your fellow human being. It’s an important part of who we are. We very much believe [those down on their luck] are our brothers and sisters, spirit children of our Heavenly Father. We’re all connected. I think it’s important to know where we came from, why we’re here and where we’re going, you know?” McNeil said, twisting his wedding ring around his finger. Any leftover time is spent adventuring around the globe — Judy and Charlie have been to all seven continents and have itineraries in place for years to come.

Amidst the trinkets from business deals, international trips, and political run-ins, McNeil’s office is littered with Boy Scout memorabilia. McNeil, an Eagle Scout and 15-year Executive Board Member, is President and Board of Trustee Member of the Denver Area Boy Scouts: “I really believe in the Scout Oath and the Scout Law; they are very powerful principles to follow in your life, and it sets you on a good footing. It says a lot about who you are at an early stage in life — your character, work ethic, who you are — and it stays with you the rest of your life,” McNeil said proudly.

McNeil, in his teenage years, noticed an intrinsic need to accomplish and keep striving for goals: “I often wonder… what’s in my DNA? What motivates me?” In response, over the last 15 years, McNeil has developed a creed, one he cleverly coins “The P.I.E Theory.”

McNeil led me to the corner of his office towards a bookshelf overflowing with souvenirs of an extraordinary life. He gestured towards the humble bottom row, where 3 wooden plaques with golden plating rested

against the lacquered shelf. Each plaque was engraved with a word, Persistence, Integrity and Excellence, followed by a cursive quote from influential men: “It’s something that I’ve developed over the years of what’s important to me in my life, in business and in who I am,” McNeil said. “You have to be persistent — just about the time you think you can’t succeed and it’s all over, that’s when you’ve got to keep hanging in there. You got to have integrity or else people won’t want to work with you. And excellence — you need to be excellent in everything you do.” McNeil speaks to students at BYU, Mines and to his grand-children about the P.I.E Theory, sometimes adding an “S” to the acronym for “Service.”

McNeil, for decades, has pursued patriotism, enterprise and generosity.

And on that beautiful summer day, he stood in his sun-bathed penthouse atop a building across the street from Consol’s original offices — right where he started 47 years prior. Tinkering with old-school mining collectibles, Charlie McNeil grinned and leaned in close, “Follow the P.I.E theory,” he whispered. “That’s my key to success. s

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NCTA CALENDAR

OF EVENTS 2019 April 1st-3rd, 2019 Spring Conference Hyatt Regency, San Antonio, Texas April 2nd, 2019 Western Logistics & Planning Working Lunch Hyatt Regency, San Antonio, Texas

July 31st, 2019 Scholarship Application Deadline September 2019 Presentation of NCTA Scholarship Awards: David L. Laffere Scholarship Three Member’s Children Scholarships

June 10th-12th, 2019 Operations and Maintenance Conference Ritz Carlton, St. Louis, Missouri

September 9th-11th, 2019 Forty-Sixth Annual Business Meeting and Conference Royal Sonesta Harbor Court, Baltimore, Maryland

July 2019 Advertising and Editorial Deadline for Issue 2, 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

Index to Advertisers Appalachian Railcar Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Associated Terminals, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 CDG Engineers, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Cloud Peak Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Cooper Consolidated. . . . . . . . . . . . . . . . . . . . . . . . . . . Outside Back Cover GKG Law, P.C.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

44 | COAL TRANSPORTER

ILJIN Bearing ART. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Lexair, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inside Front Cover NexGen Coal Services, Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Slover & Loftus LLP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Thompson Hine LLP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Xcoal Energy & Resources. . . . . . . . . . . . . . . . . . . . . . . . Inside Back Cover

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