NCTA Issue 2, 2020

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ISSUE 2 | 2020

Coal on the Water

Ensuring a Robust Coal Export Market West Coast Ports Update

Reflections: Gayle TenBrink


W E N This device allows for the fast and efficient release of hazardous stored energy (compressed air) from the door dump system components (reservoir, filter, valve, cylinder and connecting lines) in one easy motion. Simply push the red knob to exhaust the system. Add a safety pad lock or OSHA approved “LOCKOUT/TAGOUT” hasp for multiple safety locks and the door dump system is depressurized and can safely be accessed for servicing. Once service procedures have been completed, the system is easily re-pressurized by removing the lock or hasp and locks and pulling the knob out. Use of this device is a huge time saver and adds a layer of safety for personnel while servicing or working near the door dump components on a rail car.

Features and Benefits • High flow design allows rapid release of hazardous stored energy (compressed air) • Can easily be retrofitted to any bottom dump car door circuit • Can only be locked in the exhausted (safe) position • Base is ported on both sides allowing maximum plumbing flexibility

isolation valve is based on the same The “sliding shoe” design that has been used in our Original Series and Second Generation Railcar Valves for more than 30 years. This design is extremely tolerant of the rust, scale and moisture typically found in railcar airlines. In addition to use on railcars, this valve can be used on any type of outdoor equipment, machinery or device that needs to be safely exhausted of hazardous stored energy (compressed air) per OSHA 1910.147 “LOCKOUT/TAGOUT” procedures.

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


Contents Ensuring a Robust Coal Export Market

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Coal by Barge: The Operational and Policy Outlook

ISSUE 2 | 2020

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FEATURES 0 4

Ensuring a Robust Coal Export Market By Rich Nolan, President and CEO, National Mining Association

PUBLISHED BY: National Coal Transportation Association 8181 Arista Place, Suite 100 Broomfield, CO 80021 Telephone: 801-560-9801 www.movecoal.org Editors: John Simpson Melinda Canter Phone: 720-227-1049 melinda@movecoal.org Production By: Suckerpunch Creative Inc. info@suckerpunch.ca www.suckerpunch.ca ©2020 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.

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Coal by Barge: The Operational and Policy Outlook By Jennifer Carpenter, President and Chief Executive Officer, American Waterways Operators

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Maintaining U.S. Inland Waterways: A Crucial Link in the Coal Transport System By Debra Calhoun, Senior Vice President, Waterways Council Inc.

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Efforts to Export PRB Coal to Asia Take a Detour Through the Courts By John Simpson, Editor, Coal Transporter

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NCTA Revives Waterborne Transportation Committee Amid Challenging Times on the Mississippi By Scott Becnel, Director of Energy Sales & Business Development, Cooper Consolidated LLC

Reflections: Gayle TenBrink

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The Mississippi River, Waterborne Commerce, and the Winds of Change By David Ryan, Vice President of Sales and Marketing, Associated Terminals

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Reflections: Gayle TenBrink “Go west, young (wo)man!”

DEPARTMENTS 2

Message from the NCTA President Emily Regis

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Message from the Executive Director John N. Ward

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Calendar of Events

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Index to Advertisers

CONFERENCES 10

2020/21 Conference Previews

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O&M Conference Review Durango, CO, August 17-19, 2020

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President’s Report / Emily Regis

A Message from NCTA President Emily Regis

NOTES FROM THE LAND OF QUARANTINE

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long time ago in a faraway land fondly remembered as 2019, I had all kinds of plans for the year 2020, including traveling and attending meetings and conferences, vacationing, and spending time with friends and family. But the advent of the COVID-19 pandemic canceled those plans and brought new ways of living and working, including a lock-down quarantine. It feels like we’ve been living in a different country since that earlier, more peaceful pre-quarantine time. In this “new country,” you are limited in your travels and must remain in your home unless it is absolutely necessary to go out. Travel is permitted only to other nearby “continents of necessity” called the grocery store or pharmacy. You will see a lot of the people you live with, but not friends or co-workers. You will work remotely from your home office for an undetermined length of time. I’ll admit at the beginning of this thing I felt enthusiasm for the opportunity to finally get a few things done around the house that have been neglected too long. I cooked and cleaned my way through March and April. I did yard work. I re-organized closets and drawers. In May I repainted my home office that particular shade of green I wished I had used when I first painted it many years ago. I got up early every morning and walked two miles before work. I read books and listened to music. I took time to contemplate life. What an excellent time to be productive! I remember reading somewhere that Shakespeare took full advantage of the quarantines during the many plagues he lived through in his lifetime and created some of his most famous works. This lockdown could be the perfect opportunity to finally write the great American novel! But isolation gets old. That’s why it is used as a punishment! And after a while, enthusiasm for staying home and doing projects becomes a limited commodity. Three months and counting, and it is all starting to feel like waiting in the doctor’s office for an appointment that is long past due. I miss

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the old life and want to get back to what I was doing before. And I would like to feel optimistic about the future, except the news continues to be bad—with not only the spread of more coronavirus illness, but of social and political conflict of epic proportions. Every new headline seems to be more troubling. The feeling of impending doom prevails. One cannot escape the bad news due to rapid-fire communications from the internet, email, and television except during sleep—and even then maybe not very well. The strain of all this is starting to take its toll on people. And you would be able to see it on people’s faces if not for their mask coverings! Many of us in the energy industry were told early on during the lockdown that we are essential employees due to the life-sustaining electricity our jobs provide. We have all been very fortunate to continue working through the pandemic when many others have not. Nevertheless, we were already dealing with a lot of uncertainty and social pressure before this crisis unfolded. Then more stress arrived on the heels of the pandemic in the news of plant and mine closures, employee furloughs, and layoffs—all due to the drastic downturn in the economy brought on by COVID-19. Yet the coal industry has again proved itself to be extremely resilient. We’ve kept the lights on and are providing essential fuel and fuel-related products needed to sustain life in these tumultuous times. Because that’s what we do in this business, and I would expect nothing less! The only good thing to be said about really rotten times is that when they are over, they will make you appreciate the good times all the more. At the time I am writing this in late June, we’re still stuck in the coronavirus time-warp continuum. While we await the end of the pandemic, I look forward to that happy day when we can go back to work in our offices, greet friends and colleagues with a hug or a handshake, and sit down together and have a conversation. And that day can’t come too soon.


Executive Director’s Report / John Ward

A Message from NCTA Executive Director John Ward

TIME TO LISTEN TO COACH

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ans of former UCLA basketball coach John Wooden work-from-home world expressed a desire to meet in person remember him not just for his stellar win-loss record and again as soon as safety would permit. admirable character, but for the plain and simple advice NCTA’s O&M conference in Durango, Colorado, presented he offered. Check out this gem: that opportunity. Unique attributes of the “Do not let what you canconference venue allowed the meeting to not do interfere with what you can do.” be held safely and in full compliance with As coal people, we have been learnColorado social distancing guidelines. Ining difficult lessons about adaptation for person attendees and their guests were also several years now. As the volume of coal able to take advantage of a wide variety used in the United States continues to of nearby recreational opportunities that decline, we are challenged to find new were open with full protections for visitors strategies to continue delivering value to in place. And the O&M program—which our stakeholders and support to the comoffers valuable content that can’t be found munities that depend on us. elsewhere—moved forward with a full and At the National Coal Transportation substantive agenda. Association, we’ve already adapted in sevWith significant efforts by eral ways. We’ve increased the frequency NCTA’s all-volunteer O&M Executive and depth of our communications with Committee, and especially Program Comembers and policymakers. We’ve invited Chairman Kevin Johnson of Nebraska adjacent commodities to the table. (See Public Power District, the conference prothe last issue of Coal Transporter.) We’ve gram was reworked to support a “hybrid” revitalized our Waterborne Committee event. In-person participation by those and begun to increase focus on coal exable and inclined to travel to Durango was ports—both thermal and metallurgical— secured. Virtual tie-ins for other particias the balance of domestic coal production pants were provided. shifts in that direction. (See this issue of Is this the model for the future? “Adaptability is being able to Coal Transporter.) And we’ve begun to Coach Wooden also said: “Adaptability adjust to any situation at any focus our conference programming and is being able to adjust to any situation other educational offerings to support a at any given time.” Last March or April, given time.” workforce that will soon transition to a a YouTuber made a very funny video in –John Wooden new generation of professionals. which her current self conversed with her Then along came COVID-19. last-December self, pointing out just how Like every other organization, NCTA’s plans were immuch the world changed in a few months. A few months later, mediately affected as stay-at-home orders took hold in March. it was entirely different again. A few months from now, I expect Our spring meeting planned for Scottsdale was canceled and nothing less than more dramatic change. our popular Operations and Maintenance Conference was Like the healthcare heroes on the front lines of this panpostponed. We immediately began to study how others were redemic, as well as most other businesses and organizations, we’re sponding and to explore options for adapting NCTA programs. building our new airplane while we’re flying it. While we do so, We also did our best to listen to our members. we commit to remain nimble. We’ll continue to seek out the best As spring turned into summer, it became apparent that ways to support the coal transportation industry’s policy and opersome NCTA members would be prohibited by corporate poliational objectives, providing quality educational opportunities for cies or personal situations from traveling for the remainder our members and other important audiences along the way. of this year. But other members afflicted by “Zoom fatigue” And we won’t let what we can’t do interfere with what we can. and the tidal wave of webinars that appeared in the new COAL TRANSPORTER | 3


Coal Exports / Rich Nolan

Ensuring A Robust

COAL EXPORT MARKET By Rich Nolan, President and Chief Executive Officer, National Mining Association

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lthough it is seldom acknowledged in the mainstream press, coal remains both the leading fuel for electricity generation worldwide and a key input in the steelmaking process. The International Energy Agency reports that coal accounts for almost 40 percent of electricity generation globally and projects that its consumption will increase for at least the next five years. Global consumption patterns continue to shift, however, with Asia now far and away the region with the greatest coal demand and growth prospects. While that opens up significant export opportunities for U.S. mines—which 4 | COAL TRANSPORTER

contain the largest recoverable coal reserves on earth—optimally exploiting that opportunity will require expansion and improvements in the nation’s shipping and port infrastructure. The potential payoff of such investment is significant, as coal exports’ economic contributions extend well beyond the activities at the mine mouth and include employment related to downstream transportation providers, service companies that prepare and load coal for export shipment, and other businesses that are supported by coal export activity. (Please visit NMA’s uscoalexports. org for detailed news and information on U.S. coal exports.)


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Where is U.S. Coal Exported? Metallurgical Coal Market

Metallurgical or “met” coal is used to produce coke, which is integral to steelmaking. The steel industry uses coal coke to smelt iron ore into iron to make steel. The high temperatures created by burning coal coke give steel its strength and flexibility. Each ton of steel produced requires approximately 0.6 tons of metallurgical coal. The U.S. has more than 175 metallurgical coal mines— most in the Central Appalachian region—that directly employ more than 13,000 individuals, and the vast majority of their output is exported. The U.S. consistently ranks as one of the top five global metallurgical coal producers and exporters and competes principally with Canada, Russia, and particularly Australia for a share of the met coal trade market, estimated at 300-325 million metric tons in 2017. Owing to the relative proximity of East Coast and Gulf ports, U.S. met coal exporters typically enjoy lower ocean shipping rates to Europe compared to Australian exporters, while the latter benefit from lower transportation costs to Asia. While Australian met coal is prized for its quality, U.S. high-volatility met coals generally boast higher fluidity, which can make them more desirable for use in certain metallurgical blends required in Asia, despite the potentially higher shipping costs. In the short term, U.S met coal producers are likely to continue to suffer from the drop in global steel production 6 | COAL TRANSPORTER

resulting from industrial slowdowns due to COVID-19. “Metallurgical coal mines in Appalachia have slowed production based on reduced demand from global steel production and coking coal, and [the U.S. Energy Information Administration] forecasts production in that region will decline by 35% this year,” EIA noted in its June forecast. Over the longer term, global met coal demand is likely to rebound strongly on the backs of infrastructure construction in Asia—including China, India, and Vietnam—to accommodate the region’s growing urbanization. The World Steel Association, for one, predicts that global steel demand will increase 50 percent over the next 30 years to meet the needs of the world’s growing population. That sentiment is echoed in the words and actions of several NMA members in recent months. “We expect steel to play an essential role in the revitalization of the global economy as it recovers from the disruption of the COVID-19 pandemic, and in the construction of a new economy supported by mass transit systems, wind turbines, and electric vehicles," Arch Resources CEO and President Paul Lang noted in May. Earlier this year, Warrior Met Coal announced plans to invest approximately $550 to $600 million over the next five years to develop its new Blue Creek longwall mine and barge load-out facility to serve met coal markets in Europe, Asia, and South America.


Thermal Coal Market

Thermal coal is burned to convert water into steam, which drives a turbine to generate electricity. Much of the thermal coal produced in the U.S. is mined in the Powder River Basin (PRB) of Wyoming and Montana, which boasts vast low-sulfur coal deposits. While most domestically produced thermal coal is consumed in the U.S., a portion is exported (38 million tons in 2019, or 41 percent of total coal exports). In 2019, the U.S. exported 8.1 million tons of thermal coal to India—roughly 75% of whose electric power is now generated from coalfueled plants—making it the largest U.S. thermal coal export market for the third consecutive year. Among Asian markets, Japan and South Korea are also significant importers of U.S. thermal coal. In contrast to its participation in the global met coal market, the U.S. is generally regarded as a “swing” supplier of thermal coal. The U.S. competes with Russia, Colombia, and South Africa to supply European markets, while it competes with Australia, Indonesia, and South Africa to supply Asian markets. At any given time, the volume of U.S. thermal coal exports may fluctuate in response to factors such as market demand, price competitiveness, and currency exchange rates. Although the U.S. has traditionally exported more thermal coal to Europe than Asia, that is poised to shift as the EU ramps up efforts to rely more heavily on renewable sources for its electricity production—and as Asian markets build out

their coal-fired capacity. Today, Asia accounts for 77 percent of global coal demand. By 2030, IHS Markit projects that its share will rise to 81%. The International Energy Agency (IEA) forecasts that coal power generation will increase by 4.6% per year through 2024, with coal demand in Southeast Asia growing by more than 5% per year over the same period, led by Indonesia and Vietnam. China already has 249.6 gigawatts (GW) of coal-fueled capacity in the planning or construction phases. And while China has substantial domestic coal reserves, Japan—which will build 22 new coal plants over the next five years—will rely heavily on imports. South Asian countries are also building coal-fueled power plants to meet the expected electricity requirements for their growing populations, IEA reports, with Pakistan recently commissioning over 4 GW of coal power plants and a similar capacity under construction. Bangladesh will soon commission the first coal unit of the 10 GW it plans to bring online.

U.S. Waterborne Transport Infrastructure

Clearly, global coal demand remains high—and U.S. reserves of met and thermal coal are more than ample to meet that demand—but only if deliverable at prices that are competitive with other global producers. How well positioned, then, is our nation’s waterborne transport infrastructure to serve these export markets?

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While rail remains the dominant form of coal transportation in the U.S., 20 percent of the nation’s coal is moved on the water. The U.S.’ interconnected waterways comprise 12,000 miles of commercially navigable channels that run through 38 states. This system, which is maintained by the U.S. Army Corps of Engineers, is serviced by more than 31,000 barges that move cargo among the nation’s rivers, coasts, harbors, and the Great Lakes. Congress is currently considering regularly enacted legislative updates to water infrastructure, ports, and navigation systems in the United States. The American Water Infrastructure Act and the Water Resources Act of 2020 address allowing more cargo import fees to be used for port maintenance and dredging through the Harbor Maintenance Trust Fund. The legislation also changes the financing for the Inland Waterway Trust Fund for inland waterway transportation so the funding under the Inland Waterway Trust Fund can be used for more maintenance on the system. Both Trust Funds provide exporters the necessary infrastructure for greater flow of goods throughout the systems. Most coal that is exported from producing regions in the eastern U.S. is transloaded onto oceangoing vessels at terminals located on the east and Gulf coasts, including Baltimore; Hampton Roads, Virginia; New Orleans; and Mobile, Alabama. Combined, these ports exported 78 million tons of coal in 2017, representing 80 percent of the total U.S. coal exported that year. Western U.S. ports, which by their location are better suited to serve as export conduits for Powder River Basin coal to the growing Asian coal markets, are currently severely constrained by a lack of terminal capacity. As a result, PRB and other western coal exports are typically shipped instead through Canadian ports. While alternatives for western coal exports exist—via Mexico, the Great Lakes, or the Gulf Coast—these routes are longer and thus more expensive for shippers. 8 | COAL TRANSPORTER

Supporting a Robust Coal Export Market

The lack of terminal capacity on the U.S. West Coast is a particularly vexing and urgent problem. Construction of the Millennium Bulk Terminal on the Columbia River, for example, which would facilitate the export of PRB coal to Asian markets, is currently being held up by the state of Washington, which has co-opted the Clean Water Act’s 401 certification process to derail construction of the terminal on what appear to be political grounds. NMA supports the Environmental Protection Agency’s June 1 rule clarifying the federal licensing and permitting process to allow energy infrastructure projects such as Millennium to be fairly evaluated and efficiently approved. On the East Coast, a stepped-up program of channel deepening is needed to improve navigational efficiencies and allow for safer passage of oceangoing vessels in and out of harbors. As it stands today, congressionally authorized channel improvement projects are too often delayed for years before receiving appropriations. Congress must appropriate funds for these projects in an expeditious manner to ensure the competitiveness of U.S. exporters not only of coal, but of all other goods and commodities. On the Gulf Coast, locks and dams on inland waterways require constant upkeep. Lack of regular dredging has significantly restricted movements on these channels, especially during periods of low water. In several key Gulf ports, harbors require deepening to accommodate the larger bulk cargo ships that now transit the expanded Panama Canal. The U.S. possesses the world’s largest recoverable reserves of coal—a resource that is much in demand today for power production and infrastructure building by developed and developing countries alike. To maximize the economic benefits of this resource to our nation’s citizens, we need the transportation infrastructure to deliver it efficiently and competitively around the globe.


Advancing U.S. Coal Exports The National Coal Council—a Federal Advisory Committee to the U.S. Secretary of Energy—has published a report assessing and prioritizing market, infrastructure, and policy measures that can be undertaken to increase export opportunities for U.S. coal. Completed in October 2018, Advancing U.S. Coal Exports: An Assessment of Opportunities to Enhance Exports of U.S. Coal provides a competitive assessment of U.S. coal export opportunities relative to other supplier nations, as well as an analysis of prospective international markets for U.S. coal, and is recommended reading.

Key among the report’s findings are: •

Development and deployment of advanced coal mining and processing technologies to reduce production costs would enhance the competitiveness of U.S. coals in international markets.

Streamlining of funding for the nation’s inland waterway system of locks and dam infrastructure would facilitate the cost-effective flow of U.S. coals to international markets via East and Gulf Coast ports.

Dredging and channel deepening at East and Gulf Coast ports would allow for the accommodation of larger ships, thereby lowering shipping costs and enhancing the delivered

economics of U.S. coals in international markets. •

Improved planning and cooperation between federal and state authorities responsible for environmental review/ permitting—as well as reforms to the National Environmental Policy Act and related permitting processes—would enhance development of West Coast export terminals.

Financing of coal facilities overseas is hampered by domestic and international policy barriers at the Export-Import Bank of the U.S., the Overseas Private Investment Corporation, and Multilateral Development Banks administered by the U.S. Treasury Department.

Rich Nolan is President and Chief Executive Officer of the National Mining Association (NMA)—a national trade association representing coal, metal, and industrial mineral producers; mineral processors; equipment manufacturers; and other suppliers of goods and services to the domestic mining industry. In this position, he directs the association’s public policy efforts before Congress, regulatory agencies, and the White House—and sets the association’s strategic agenda for media relations, grassroots communications, and political involvement.

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Conference / Previews

2020/21 Conference Previews FORTY-SIXTH ANNUAL BUSINESS MEETING AND GENERAL CONFERENCE The Brown Palace Hotel, Denver, Colorado

September 21-23, 2020

Photos: Brown Palace

NCTA 2021 SPRING CONFERENCE Silverado Resort and Spa, Napa, California

April 12-14, 2021

Photos: Silverado Resort and Spa 10 | COAL TRANSPORTER


2021 OPERATIONS AND MAINTENANCE CONFERENCE Grand Hotel Marriott Resort, Point Clear, Alabama

June 7-9, 2021

Photos: Art Meripol

FORTY-SEVENTH ANNUAL BUSINESS MEETING AND GENERAL CONFERENCE Talking Stick Resort, Scottsdale, Arizona

September 20-22, 2021

Photos: Talking Stick Resort COAL TRANSPORTER | 11


Coal by Barge / Jennifer Carpenter

Coal by

Barge: The Operational and Policy Outlook

By Jennifer Carpenter, President and Chief Executive Officer, American Waterways Operators

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uring the current COVID-19 pandemic, with many Americans struggling economically and concerns about supply chain continuity in the headlines, there has been much reflection on the goods, services, and capabilities that we typically take for granted. Meat processing plant employees, truck drivers, grocery store clerks, and other frontline supply chain workers have been rightfully recognized for their everyday heroism in keeping our nation supplied despite unprecedented challenges. Less media attention has been shed on the men and women who make up industries that operate further back in that supply chain—but who are equally critical to keeping our country safe, 12 | COAL TRANSPORTER

supplied, and secure. This has been true not only for producers of key fuels such as coal, and the companies generating and distributing electricity from it, but also for transporters of other energy sources and vital cargoes that power our nation and drive its economy, in good times and bad. The tugboat, towboat, and barge industry is a critical component of U.S. supply chains. In a typical year, the industry transports over 760 million tons of commodities on waterways throughout the United States, contributing nearly $34 billion to GDP annually and supporting over 300,000 American jobs. Coal—a fuel that remains fundamental to powering the nation, maintaining American energy independence, and supporting robust international trade— makes up a significant portion of that cargo, with over 100 million tons of coal transported on domestic waters by barge in 2019, both for domestic consumption and for export to foreign markets. American Waterways Operators (AWO) is proud to be part of the multimodal transportation system that moves this essential energy source. We are also proud of the important benefits that barge transportation offers our coal industry customers. As PricewaterhouseCoopers (PwC) noted in its 2017 study on the economic contributions of the tugboat, towboat,

and barge industry, barge transportation is a highly efficient mode of freight transportation. A single inland dry cargo barge can move as much coal as sixteen railcars; a standard 15-barge tow moves as much coal as 216 railcars. The PwC study also highlights the extraordinary safety of barge transportation. This record results both from the nature of waterways navigation and its less frequent interaction with the traveling or commuting public and from the industry’s foundational commitment to safety. That commitment underpins the AWO Responsible Carrier Program—a safety management system for tugboat, towboat, and barge companies that provides a framework for continuously improving company safety performance—and is what propelled AWO to work proactively with the U.S. Coast Guard to craft the “Subchapter M” towing vessel safety regulations that took effect in 2018 to raise safety standards across our industry. To ensure that the barge industry can keep delivering for our coal customers, we need to manage the challenges of today’s complex and dynamic operating environment and advocate for public policy that keeps the maritime supply chain functioning efficiently. This spring, the Department of Homeland Security identified commercial maritime workers as part of the


country’s essential critical infrastructure workforce. Consistent with that designation and our core commitment to safety, the industry has focused on adapting operational practices to keep mariners and shoreside staff healthy to ensure continuity of operations throughout the COVID-19 pandemic. These efforts have been effective in holding COVID-19 cases in our industry to a minimum while keeping transportation of coal and other vital maritime commerce moving. On the economic front, while maritime freight transportation did not experience the abrupt drop in demand that COVID-19 inflicted on a number of other industries early on, our industry continues to experience ripple effects from the resulting economic downturn, along with unbudgeted costs of COVID-19 risk mitigation. These challenges are significant, but ours is a resilient industry, with long experience weathering severe flooding, devastating hurricanes, and other crises. Our experience with contingency planning, crisis management, and safety management systems has positioned us well to serve our customers as we navigate the new challenges before us. Our industry’s ability to move coal and other commodities on America’s waterways also depends on ensuring that the right public policies are in place. First and foremost, the Jones Act—the

foundational law of American maritime requiring that cargo moving between two U.S. ports be transported on vessels that are American-built, -owned, and -crewed—must be sustained. The law is critical to America’s economic and national security; without it, foreign companies would be able to insert themselves into the domestic supply chain for American coal, rendering it less stable and our waterways less secure. Ensuring the unhindered flow of maritime commerce is also critical. Marine transportation requires a reliable network of locks and dams, and dredging on rivers and at coastal ports, so that vessels can move cargo safely and efficiently. It is imperative that federal investment in waterways infrastructure keep pace with demand. Keeping maritime commerce moving also requires consistent national standards for vessels in interstate commerce. Our industry’s ability to serve its customers without interruption would have been jeopardized had the federal government not acted quickly to identify maritime workers as part of the essential critical infrastructure workforce so they could freely travel to work as state and local stay-at-home orders proliferated this spring. The same need for uniformity also applies in other issue areas, such as environmental regulation. Consistent national regulations are essential to

effective and efficient functioning of the maritime supply chain. As our industry continues to prioritize safety while managing the challenges of the COVID-19 pandemic, Congress can reinforce those efforts by: (1) supporting prioritized access to COVID-19 testing for mariners as essential critical infrastructure employees, and (2) enacting temporary, targeted liability protections for maritime employers who make good-faith efforts to abide by applicable public health guidelines in working to protect their employees from exposure to COVID-19—while preserving the availability of legal remedies against employers who engage in reckless or willful misconduct. Coal remains a vital component of the American and global energy markets, and the tugboat, towboat, and barge industry is committed to providing our customers with safe, efficient, cost-effective, and reliable transportation in today’s challenging times and beyond. Jennifer Carpenter is President and Chief Executive Officer of the American Waterways Operators (AWO), the national trade association for the tugboat, towboat, and barge industry. Previously, she served as AWO's Executive Vice President and Chief Operating Officer.

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Maintaining U.S. Inland Waterways / Debra Calhoun

Maintaining U.S. Inland Waterways: A Crucial Link in the Coal Transport System By Debra Calhoun, Senior Vice President, Waterways Council Inc.

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he link between the U.S. inland waterways system and the energy industry is intrinsic: in 2017 fully 20 percent of coal, 22 percent of petroleum products, and 6 percent of crude petroleum was transported on the inland waterways. As such, trends in these commodity shipments are watched closely by carriers and service providers who operate along this system.

A Tough Year for Coal

This year has been a difficult one for the U.S. coal market: shrinking exports, low

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gas prices, low demand for electricity from the mild winter, and COVID-19 and the related drop in GDP have all suppressed coal demand. High coal inventories present at the start of the year have only recently begun to be drawn down with the heat of the summer kicking in. According to the U.S. Energy Information Administration (EIA)’s July 7, 2020, report, U.S. coal consumption is expected to decrease by 28 percent in 2020 as a result of reductions in coal use for electricity generation—the result of both lower overall electricity


generation and low natural gas prices that make coal less competitive as a generation fuel. The largest drops in coal use for power generation occur in the Midwest, Southeast, and Mid-Atlantic. However, EIA forecasts that U.S. coal consumption will rise by 21 percent in 2021 largely because of an expected increase in natural gas prices that will cause some coal-fueled generation units to become more economic to dispatch. On the export side, EIA forecasts that U.S. coal exports in 2020 will decrease by 32 percent to 63 million short tons. U.S. Atlantic ports, which handle most U.S. coal exports, are seeing decreased demand because of the global economic slowdown. Based on an assumed increase in global coal demand in 2021, EIA forecasts U.S. coal exports to increase by 7 percent next year. EIA expects the rebound to be modest due to lower demand for U.S. coal in India. India, the top destination for U.S. exports in recent years, has lowered its consumption of both steam and coking coals by nearly 50 percent this year. It has also opened up domestic mining options to private companies.

And yet despite the decline in coal use, which has been displaced by natural gas and subsidized renewables, it still remains an abundant, stable, reliable, affordable source of energy, generating about 30 percent of the electricity used daily in the United States and more than 37 percent of the world's electricity. In addition to being a fundamental fuel source for power generation, coal is also used in the manufacture of steel and cement—cargoes also moved on the inland system. But without efficient infrastructure on the inland waterways, neither coal—nor steel, cement, agricultural products nor aggregate/construction materials—can move efficiently to their domestic or global destinations.

Maintaining an Efficient Inland Waterway System Waterways Council Inc. (WCI) is the national public policy organization that advocates for a modern, efficient, wellmaintained inland waterways and port system. WCI has had great success since its founding in 2003 advocating for steady increases in annual appropriated funding

for U.S. Army Corps of Engineers’ Civil Works for the construction and rehabilitation of major capital projects as well as upkeep of the inland waterways. WCI also has been successful pressing for policy improvements, while beating back user fees and bad policy proposals. The Water Resources Development Act (WRDA) is the biennial policy authorization bill for water resources and the inland waterways, and it is currently moving forward in Congress. If enacted, with WCI’s key recommendation to permanently adjust the construction and major rehabilitation cost-share formula, WRDA 2020 would enhance the process to deliver modern, efficient locks and dams for the transport of coal for electric power generation and industrial use in the United States and around the world. WCI’s top WRDA 2020 priority is to adjust the cost share for Inland Waterways Trust Fund (IWTF)-financed construction and major rehabilitation projects to require that 25 percent of the project cost be derived from the IWTF and the remaining 75 percent from General Revenues. Currently, the cost share formula is 50-50. Commercial

COAL TRANSPORTER | 15


towboat operators pay a 29-cent-pergallon diesel fuel tax to support revenues into the IWTF and half of the cost of new construction and major rehabilitation on the system. These operators pay the highest surface transportation tax in existence today and are the only user/ beneficiary of the waterways to pay a fee supporting half of the cost of their upkeep and modernization. The waterways, a national system, offer benefits to the entire nation, including municipal and industrial water supply, national security, flood control, hydropower, and vast recreational opportunities.

Current Action on WRDA Reauthorization In early May, the Senate Environment and Public Works (EPW) Committee, the key Senate committee of jurisdiction

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for the WRDA bill, marked up and passed by a unanimous vote America’s Water Infrastructure Act of 2020 (the Senate’s version of WRDA). EPW’s bill included WCI’s priority to adjust the cost share for construction and major rehabilitation of inland waterways projects, but at 65 percent General Revenues/35 percent IWTF. In the House, at press time, the Transportation & Infrastructure (T&I) Committee (the House key committee of jurisdiction on WRDA) released its draft WRDA bill and marked it up on July 15. Like the Senate EPW Committee, the House T&I Committee adjusted the cost share to 65 percent General Revenues /35 percent IWTF, but with a sunset provision through fiscal year (FY) 2027. Beyond WCI’s focus on the costshare adjustment in WRDA, annual appropriations to support the U.S. Army

Corps of Engineers’ work remain a top priority. On July 13, the House Appropriations Committee approved, by a party line vote of 30 to 21, FY 2021 funding for Energy and Water Development (E&WD), which funds the Corps. Overall proposed funding for the Corps is $7.63 billion, $21 million below FY 2020’s record-setting appropriated level, but $1.7 billion above the President’s FY 2021 budget request. The House bill also provides for the following: • Seven new study starts and seven new construction projects to be selected by the Administration, one of which is for inland waterways lock and dam modernization. • The Corps’ Investigations account funding is $151 million, equal to the FY 2020 enacted


level and $48 million above the FY 2021 request. • Funding for the Construction account is $2.62 billion, $61 million below FY 2020’s level, but $447 million above FY 2021’s request. • Funding for the Inland Waterways Trust Fund is $90 million, for a total of at least $180 million for construction and major rehabilitation of inland waterways projects. • Operations and Maintenance (O&M) funding is $3.84 billion, an increase of $48 million above FY 2020 and $1.8 billion above the Administration’s request. • Harbor Maintenance Trust Fund (HMTF) projects receive $1.68 billion, $50 million above the FY 2020 level and $665 million above the Administration’s request. This represents 92 percent of estimated HMTF revenue and is

9 percent above the target set by the Water Resources Reform and Development Act of 2014. • The Corps of Engineers will also receive an additional $17 billion in emergency funding to accelerate work on Corps projects. Of that amount, the Construction account will receive $10 billion to accelerate projects across all Corps mission areas, at least $3 billion of which is for inland waterways projects.

25 years to their lives. This closure, which shippers and operators have long prepared for, will bring additional reliability to the system’s users. While the future may seem uncertain—amid COVID-19 and declining coal exports—WCI will continue to advocate for increased certainty and reliability of inland waterways infrastructure to benefit our nation’s coal producers, transporters, and consumers, as well as all shippers and operators.

• The bill also provides $5 billion in O&M emergency funding.

For more information, visit www.waterwayscouncil.org.

WCI also works with the Corps to ensure scheduled and unscheduled closures on the system are not disruptive to shippers and operators. In fact, from July 1 through October, an unprecedented consolidated major maintenance closure of the Illinois Waterway is underway, with work on five locks expected to add

Debra Calhoun is Senior Vice President of Waterways Council Inc. She has been with WCI since its founding in 2003, and with its predecessor organization Waterways Work!, and has been instrumental in managing the Council’s overall portfolio and communicating its successes and priorities.

innovative thinking in fly ash

srmaterials.com COAL TRANSPORTER | 17


Efforts to Export PRB Coal / John Simpson

EFFORTS TO EXPORT PRB COAL TO ASIA Detour Through the Courts

By John Simpson, Editor, Coal Transporter

W

hile U.S. and European thermal coal consumption has softened in recent years, the global coal trade has continued to grow. According to the International Energy Association, worldwide coal exports have more than doubled since 2000, with global trade in coal consistently growing faster than global consumption.1 And that trend is likely to continue, with the Energy Information Administration forecasting an average growth in the global coal trade of 1.4 percent annually through 2050.2 The lion’s share of that growth will come from exports to Asian economies—both mature and developing—as they increase their reliance on coal-fueled electricity generation. Since 2009, the top five coal-importing countries have all been located in South or Southeast Asia: Japan, India, China, South Korea, and Taiwan.3 According to IHS Markit, Asia’s share of total global coal demand will increase from its approximately 77% share today to 81% by 2030.4

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All of which would be good news to western U.S. coal producers—particularly those in the Powder River Basin that mine low-sulfur coal attractive to Asian power plant operators—were it not for the lack of coal export terminal capacity on the West Coast. Currently, there is only one such facility that inland coal producers can readily access—Westshore Terminals, in Delta, British Columbia, which is already Canada's busiest coal export terminal.5 Efforts to remedy that situation by building deep-water export facilities with access to rail—in Longview, Washington, and Oakland, California—point up the difficulties in building fossil fuel infrastructure in municipalities more politically in tune with renewable energy interests.

Millennium Bulk Terminal

In 2011, Millennium Bulk Terminals LLC purchased the site of an abandoned aluminum smelter in Longview, Washington, with plans to invest an estimated $600 million to upgrade the existing


Photo: CC BY 3.0/Peabody Energy

import/export bulk facility and build a coal receiving, storage, and shipping terminal. Upon completion, the project would allow for up to 44 million metric tons of coal6 per year to be transported by rail from the Powder River Basin and Uinta Basin to load on ships at the facility for export to Asia. An economic analysis by Berk Consulting estimated that the revitalization of the site would support 2,650 temporary jobs, $70 million in wages, and $232 million in direct output during the construction phase. At buildout, site operations would produce 135 jobs, $16 million in wages, and $49 million in direct output annually. Over the projected 30-year life of the facility, activities would generate an estimated $146 million in tax revenues.7 However, in its environmental assessment of the proposed terminal, the Washington Department of Ecology (WDE) expanded the scope of its review beyond the project area—beyond state and international borders, in fact—to include potential environmental impacts relating to both the upstream rail transportation of the coal and the downstream use of the coal for electricity generation in Asia.8 WDE’s environmental impact statement ultimately mandated the purchase of carbon offsets to mitigate 50 percent of the greenhouse gas emissions related to coal shipments to and from the proposed terminal.9 WDE further denied a needed water-quality permit “with prejudice,” effectively scuttling project developers’ ability to revise their original proposal to meet regulatory requirements.10 In January 2018, Millennium’s parent company, Lighthouse Resources Inc., sued Washington state officials, including Governor Jay Inslee and the WDE director, in federal court, asserting that their actions violated the U.S. Constitution’s Commerce and Supremacy clauses.11 While the company has appealed several subsequent decisions by that court to the Ninth Circuit, their cause has since been taken up by the states of Wyoming and Montana, which earlier this year filed a joint motion before the U.S. Supreme Court requesting that it take up “original jurisdiction” over the matter.12 COAL TRANSPORTER | 19


"This case implicates an important purpose of the Commerce Clause: prohibiting coastal states from blocking landlocked states from accessing ports based on the coastal states' economic protectionism, political machinations, and extraterritorial environmental objectives," the states’ attorneys general wrote in their filing. “When Washington denied ‘with prejudice’ a Section 401 Water Quality permit for the Millennium Bulk Terminal in Cowlitz County, it did so to protect its own agricultural interests and because it objected, as a matter of political posturing, to the commodity that Wyoming and Montana sought to export: coal,” they added.13 Both the National Mining Association and the National Association of Manufacturers have weighed in on the case, filing an amicus brief that notes, in part: “By all appearances, Washington has denied [Clean Water Act] certification for construction of the terminal, not to protect waters of the United States or to pursue any other legitimate local interests, but because state officials disagree with the federal government’s foreign trade policy. The Constitution allocates exclusive authority over international trade to the federal government. And it does so for good reason: international trade and foreign policy are inherently matters of national concern.”14 While the Supreme Court has yet to decide whether it will take up the case, the U.S. Environmental Protection Agency in the meantime has issued a new rule limiting states’ (and Native American tribes’) ability to block federally permitted projects based on state water standards. Clarifying its view on Section 401 of the Clean Water Act, EPA in a June 1, 2020, ruling stated that the 20 | COAL TRANSPORTER

“scope of a State’s or Tribe’s Section 401 review or action is not unbounded and must be limited to considerations of water quality.” The agency also set a timeline of one year within which authorities must act on a certification request.15 “Today, we are following through on President Trump’s Executive Order to curb abuses of the Clean Water Act that have held our nation’s energy infrastructure projects hostage, and to put in place clear guidelines that finally give these projects a path forward,” EPA Administrator Andrew Wheeler commented upon announcing the final rule.16 The rule, which will take effect September 11, 2020, is likely to engender further litigation as states seek to regain from the federal government the authority under the Clean Water Act to impose conditions on energy projects based on state law.

Oakland Bulk and Oversized Terminal The Oakland Bulk and Oversized Terminal (OBOT) is a planned multicommodity export facility located on the site of a decommissioned U.S. Army base at the port of Oakland.17 The project, approved by the Oakland City Council in 2012, is designed to take advantage of the location’s proximity to existing rail infrastructure and the city’s deep-water port. According to Insight Terminal Solutions (ITS), which holds the sublease to operate the proposed terminal, OBOT will be designed to handle an annual throughput of over 10 million metric tons of bulk agricultural and mineral commodities and receive up to three

unit trains of 114 rail cars per day. ITS says OBOT will be able to accommodate Handymax (30,000-ton) to Capesize (130,000-ton) vessels for shipment of these commodities. It anticipates investing over $250 million for the proposed 66-year life of the project that will generate a construction payroll of $76 million and annual and induced payrolls of $120 million—helping bring needed economic activity to an area of Oakland distressed since the Army base’s closure in 1999.18 When news surfaced in 2015 that four Utah counties—Carbon, Emery, Sanpete, and Sevier—were prepared to invest in the construction of the terminal in return for the right to ship coal to Asia-Pacific markets, activists mobilized to interrupt the plan. “The Oakland City Council has the authority to ban coal exports if they have evidence that coal exports are ‘substantially dangerous to health and safety’ for neighboring communities,” a Sierra Club fact sheet asserted at the time.19 After a year-long pressure campaign, Oakland’s City Council voted to ban coal and petroleum coke storage and handling in the city.20 The project’s developer, OBOT CEO Phil Tagami, in response sued the city in federal court, claiming that the council’s action violated the terms of his 2013 agreement with the city to develop the project.21 In May 2018, the U.S. Court for the Northern District of California struck down the city’s ban—ruling that the city had breached its contract with OBOT and finding that there was not sufficient evidence that coal-related operations would pose a substantial threat to the community’s health or safety.22 Earlier this year, the


on up to $53 million in Utah state funds to advance construction of the terminal.25 Authorization to do so was approved by the Utah state legislature and signed into law in 2016.26 John Simpson is editor of Coal Transporter.

Footnotes

Photo: CC BY 4.0/Азат Сибишов

Ninth Circuit Court of Appeals upheld the lower court’s ruling.23 As in the case of the Millennium Bulk Terminal, the likeliest outcome of the most recent legal activity is further litigation. The Sierra Club, for one, reportedly plans to appeal the Ninth Circuit Court’s decision.24 In the meantime, the aforementioned four Utah counties have restated their commitment to invest in OBOT, affirming in signed court documents supporting ITS’ reorganization plan their intention to draw

1 International Energy Agency. “Coal Information 2019.” https://www.iea.org/reports/coal-information-2019. Retrieved on July 21, 2020. 2 Energy Information Administration. International Energy Outlook 2019. p 110. 3 International Energy Agency. “Coal Information 2019.” https://www.iea.org/reports/coal-information-2019. Retrieved on July 21, 2020. 4 “Coal’s Death Greatly Exaggerated as Fuel Lives Large in Asia.” Bloomberg Law. June 10, 2020. 5 University of Pennsylvania. Wharton Public Policy Initiative. “United States Coal Export Facilities.” October 8, 2018. 6 Berk Consulting. “Economic & Fiscal Impact Assessment of Millennium Bulk Terminals.” April 12, 2012. 7 Ibid. 8 Lammi, Glenn G. “Commerce-Clause Challenge Over Washington Coal-Export Terminal Overcomes First Hurdle.” Forbes. June 19, 2018. 9 Lammi, Glenn G. “Washington State Officials Usurp Federal Authority with Crusade to Block Export Terminal.” Forbes. March 19, 2018. 10 Ibid. 11 Lammi, Glenn G. “Commerce-Clause Challenge Over Washington Coal-Export Terminal Overcomes First Hurdle.” Forbes. June 19, 2018.

12 McKim, Cooper. "‘We Believe This Is Our Sole Remedy’: WY, MT Look to Supreme Court over Coal Export Terminal.” Wyoming Public Media. January 21, 2020. 13 State of Montana and State of Wyoming, Plaintiffs, v. State of Washington, Defendant. Motion for Leave to File Bill of Complaint, Bill of Complaint, and Brief in Support. January 21, 2020. p 1. 14 Montana and Wyoming, Plaintiffs, v. Washington, Defendant. “Brief of the National Mining Association and the National Association of Manufacturers as Amici Curiae in Support of Plaintiffs’ Motion for Leave to File a Bill of Complaint.” March 20, 2020. p 1. 15 U.S. Environmental Protection Agency. “Clean Water Act Section 401 Certification Rule.” Final Rule. June 1, 2020. 16 U.S. Environmental Protection Agency. “EPA Issues Final Rule that Helps Ensure U.S. Energy Security and Limits Misuse of the Clean Water Act.” News Release. June 1, 2020. 17 Oakland Bulk and Oversized Terminal. “OBOT Vision.” http://obotjv.com/about-us. Retrieved on July 21, 2020. 18 Insight Terminal Solutions. “Frequently Asked Questions.” http://insightterminals.com/faq. Retrieved on July 21, 2020. 19 Sierra Club – San Francisco Bay. “Oakland Coal Exports.” Fact Sheet. p 2. 20 Sierra Club. “Oakland Votes to Ban Coal and Petcoke Handling and Storage.” July 22, 2016. 21 Christophi, Helen. “Oakland Faces Lawsuit over Obstruction of Coal Shipping.” Courthouse News Service. December 4, 2018. 22 Dinzeo, Maria. “Ninth Circuit Overturns Oakland Coal Ban.” Courthouse News Service. May 26, 2020. 23 Ibid. 24 Debolt, David. “Oakland Loses Appeal on Coal Ban.” The Mercury News. May 26, 2020. 25 Maffly, Brian. “Utah Coal Counties Pledge $20M in State Money to Help Get Oakland Port Back on Track.” The Salt Lake Tribune. July 5, 2020. 26 “Utah Governor Signs Bill Funding California Coal Port.” Bloomberg Law. March 28, 2016.

COAL TRANSPORTER | 21


Waterborne Transportation Committee / Scott Becnel

NCTA Revives Waterborne Transportation Committee Amid Challenging Times on the Mississippi By Scott Becnel, Director of Energy Sales & Business Development, Cooper Consolidated LLC

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T

hese are indeed challenging times that our nation faces, as we grapple with how best to contain the COVID-19 pandemic while simultaneously maintaining and expanding life-sustaining industry, trade, and commerce. The two goals could be seen as incompatible—absent careful planning and adherence to a sound course of action on both fronts. It is with this is as background that NCTA Executive Director John Ward approached me to chair the recently reactivated Waterborne Transportation Committee. Coal traffic on the U.S. inland waterways system was already dropping before the pandemic hit—which slowed industrial activity, decreased electricity consumption, and compounded the challenges for both those who produce coal and those who transport it. And while the ongoing declines in domestic coal-fueled electricity generation mean that a return to the volumes of waterborne coal shipments of yesteryear is unlikely, I see a potential boost in metallurgical and thermal coal exports that could help offset much of the expected future declines in domestic consumption.

The Inland Waterways System

Sometimes referred to as the “backbone of the transportation logistics system,” the inland waterways comprise 12,000 miles of interconnected navigable water channels and 218 locks that are integral to the nation’s supply chains1—not the least of them, coal. According to American Waterways Operators, over 100 million tons of coal was transported on U.S. waterways last year alone for both domestic consumption and export— the vast majority of which was moved by barge.2 Currently, approximately 18,000 dry cargo barges operate throughout the system—roughly 70 percent of which are covered and 30 percent of which are open hopper barges. And while railroads move a much greater volume of coal throughout the U.S., barges move coal far more efficiently and cost-effectively. One standard 15-barge tow can move the equivalent of 216 railcars or 1,050 trucks.3 Moreover, compared to barges, moving an identical amount of cargo by rail generates 30 percent more emissions, while trucks generate 1,000 percent more emissions per ton-mile of cargo moved.4 Clearly, the availability of efficient transport by barge is of vital importance to the competitive position of U.S. coal— compared both to other fuels for domestic consumption and to overseas coal sources for export markets. And yet the U.S. barge infrastructure is aging, with more than one-third of barges over 20 years old and nearing the end of their expected life. What’s more, new hopper barge construction over the past several years has been significantly below historical averages—at least in part a reflection of the reduced tonnage of coal moving over the inland waterways in recent years.

Aging Waterways Infrastructure

NCTA’s Waterborne Transportation Committee was formed in 2015 to focus on the coal industry’s unique logistical, regulatory, and infrastructural needs—and those needs have only grown more pronounced in the intervening years. The Committee’s purview includes all segments of the coal transportation market, including the Great Lakes and inland waterways, locks and dams, rail-to-water logistics, export terminals, ocean shipping, and the regulatory challenges related to all of these areas. In light of the challenges and changes associated with coal transportation in today’s environment, the Committee sees a growing role for itself in facilitating solutions to issues that impact producers, shippers, and service providers alike.

The aging infrastructure of the inland waterways that our barges navigate, particularly its locks and dam structures, represents another challenge that will require substantial investment in the coming years. More than half of all U.S. locks and dams now in operation were built in the 1930s and are well past their projected 50-year design lives.5 Too often in recent years, that has translated into malfunctions, delayed shipments, and an added cost of doing business. Severe flooding on the inland waterways in 2019 and early 2020 has exposed further challenges to cargo traffic that require urgent and ongoing attention. Persistent high water on the Lower Mississippi River in recent months has caused silt to fill in at the draft at Southwest Pass (the river’s deep draft channel), forcing reduced tonnages per vessel and, again, COAL TRANSPORTER | 23


“These draft improvements, once completed, will help lower the costs of all products shipped via larger oceangoing vessels and will help improve the economics to deliver coal tons to the Far East.” –Scott Becnel

higher shipping costs. Dredging and other channel improvements have to be carried out in a timelier manner to avoid river closures and stoppage of services that severely impacts barge companies, shippers, and terminals. There is some good news on the horizon. Recent legislation has approved the deepening of the channels for the Port of New Orleans and Alabama (Mobile). The new drafts increase from 45’ to 50’ and will match the new Panama Canal draft of 50’. These draft improvements, once completed, will help lower the costs of all products shipped via larger oceangoing vessels and will help improve the economics to deliver coal tons to the Far East. On July 31, Louisiana state officials joined the U.S. Army Corps of Engineers in authorizing and signing an agreement for the deepening of the Mississippi River from the Gulf of Mexico through Baton Rouge. The importance of upkeep and improvement of the inland waterways

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ransportation, energy, freight forwarding,


obviously goes well beyond coal producers and transport companies. The Lower Mississippi River sees roughly 7,500 vessel calls per year at five deep-draft ports below Baton Rouge (mile 250) that import and export a collective 150 million tons of cargo annually. This combined five-port district is equivalent to the largest-tonnage port in the world—and the ports, waterways, and waterwaysdependent industries it supports generate over 100,000 jobs and $27.8 billion in total output.6 Perhaps more astonishing is that the current coal-handling capacity for Gulf Coast terminal operators—landbased and mid-stream—is a whopping 110 million tons annually. It is the goal of the Waterborne Transportation Committee to work with all interested parties that have a vested interest in this infrastructure to ensure that that capacity is utilized to its utmost in the coming years. Those interested in helping the Committee shape and realize this vision should contact me at Scott.Becnel@ cooperconsolidated.com.

Scott Becnel is Director of Energy Sales & Business Development at Cooper Consolidated LLC—a balanced, asset-based provider of stevedoring, barge, marine, and logistics services. The company’s services span the entire reach of the Lower Mississippi River between Southwest Pass and Baton Rouge and are provided and directed by their own assets and employees, thereby giving customers the most reliable and flexible service achievable. Their specialties are innovative transfer technologies and seamless cargo movements. Scott is a lifelong resident of Belle Chasse, Louisiana, a small town downriver of New Orleans along the banks of the “Mighty Mississippi.” Growing up alongside the river, Scott knew of the opportunities it provided and decided to attend Texas A&M University’s Maritime Campus in Galveston, where he received a Bachelor of Science degree in Maritime Administration in 1987. He has since

spent his 33+-year career in various management and senior management roles for bulk terminals, logistics providers, and marine-related businesses on the Lower Mississippi River. In addition to serving as the newly appointed chair of NCTA’s Waterborne Transportation Committee, Scott also serves as a Board Member for the American Coal Council, an Executive Committee Member for the International Dry Bulk Terminals Group, and served previously as a Board Member of the Louisiana International Gulf Transfer Terminal Authority.

Footnotes

National Waterways Foundation. Fact Sheet. “Economic Impact of Louisiana’s Inland Waterways.” 2019. 2 Carpenter, Jennifer. “Coal by Barge: The Operational and Policy Outlook.” Coal Transporter. Issue 2, 2020. p 12. 3 National Waterways Foundation. Fact Sheet. “Economic Impact of Louisiana’s Inland Waterways.” 2019. 4 Texas A&M Transportation Institute. A Modal Comparison of Domestic Freight Transportation Effects on the General Public: 2001–2014. January 2017. p A-1. 5 National Waterways Foundation. Fact Sheet. “Economic Impact of Louisiana’s Inland Waterways.” 2019. 6 Ibid. 1

COAL TRANSPORTER | 25


The Mississippi River / David Ryan

THE MISSISSIPPI RIVER, Waterborne Commerce, and the Winds of Change

T By David Ryan, Vice President of Sales and Marketing, Associated Terminals

26 | COAL TRANSPORTER

he winds of change are seemingly the only constant in the course of history. It is true of people and it is true in business. However, it is the remarkable ability of humans to change course and adapt ourselves and our businesses to personal and professional needs that has allowed us to prosper in this ever-changing world. Sometimes change is slow and methodical, giving us time to respond at our own pace. Yet other times it happens immediately, requiring us to fire all of our synapses at once, compensate on the fly, and then look for ways to tweak our decisions as we progress.

Regardless of our desire for change, or lack thereof, it is inevitable. In business, knowing this requires that we build teams to devise new thoughts, ideas, methods— even a brand-new path altogether different to the status quo—and make it work. So while coal remains the most stable, reliable, easily transported form of energy in the United States, the inevitable winds of change have made their mark, and as a result we have gone from consuming nearly 1 billion tons per year domestically to utilizing just over one-third of that total. This huge swing has happened in just over 10 years. Of course, this radical reduction has already caused changes in


“Regardless of our desire for change, or lack thereof, it is inevitable.” –David Ryan

the market—downsizing, consolidation, and bankruptcies—undoubtedly more of which are to come. Make no mistake, coal use in the U.S. is not dead, nor will it die (at least not until long after everyone reading this article is no longer in the game) as it is too important for the grid as well as national security, nor is there any fuel or technology truly capable in all regards of taking its place. But, inevitably, more change is coming. I believe, as I’m sure most now do, that the long-term answer for those who want to survive in the coal industry involves switching from the comfort of selling coal domestically to embracing the export of coal to the world, and figuring out how to do it. To many, this sounds complex. And to some degree, it is (albeit only temporarily). Yet some have already figured this out and are staking their claim on the foreign market, starting the adaptation and transformation and positioning themselves for the next wave to come. For me—a mid-stream stevedore on the lower Mississippi River loading coal directly from river barge to oceangoing vessel—I have seen firsthand the success that those who have accepted the challenge of inevitable change can achieve through the export of coal. It is important to know what they already know—which is that they are not going it alone. There are a number of industries, advocacy groups, and vendors, such as Associated Terminals, that are dedicated to helping clear paths, remove obstacles, and acting as consultants to steer the way down America’s marine superhighway, which leads to the world and will play a key part in this needed metamorphosis of the industry. For those who are new to the concept, as well as those who are already using America’s marine superhighway, here are some key facts about the Mississippi River, its feeder river/tributaries, and the infrastructure that makes it all work: • Within the last 48 months, 61 million tons of coal has moved out of the Lower Mississippi River (LMR). • Current draft of the river is at its normal 47’ depth, and legislation to deepen the draft to 50’(+) has been approved. That project will likely begin in late 2020 or early 2021. Funding will primarily come

from the Harbor Maintenance Trust Fund within the Water Resources Development Act (referred to as “HMTF” and “WRDA,” respectively). • Dredging is taking place virtually 24/7 on the LMR. There are seven dredges actively working in and around the New Orleans area as you read this. • On July 15, the U.S. House of Representatives Transportation and Infrastructure Committee (T&I) considered and easily passed the latest iteration of the bipartisan Water Resources Development Act of 2020 (WRDA 2020/H.R.7575) by voice vote. WRDA 2020 contains both study and construction authorizations for water resource projects, as well policy provisions relevant to the U.S. Army Corps of Engineers’ Civil Works program. The bill was tentatively scheduled to move to the House floor for consideration the week of July 27.1 WRDA 2020 can be read at the following link: https:// transportation.house.gov/imo/ media/doc/WRDA20_01_xml.pdf. Herein, you will find the entire bill and the myriad projects directly designed to facilitate improvement of America’s inland and coastal waterway ports and infrastructure. Most importantly, to import and export shippers, are items directly identified and funded by the Harbor Maintenance Trust Fund. The point, related to this article, is that federal mandates require ongoing investment in the improvement to existing, and new development of, port and infrastructure projects, which will help facilitate waterborne commerce. • Olmsted Lock and Dam (the largest and most expensive inland waterway project in U.S. history, at a cost of over $3 billion) is now in full operation, removing the need for the dilapidated and problematic locks 52 and 53. • Maintenance to update and improve 14 lock/dam structures is currently taking place or will soon be conducted on the Mississippi, Arkansas, Ohio, Illinois, and COAL TRANSPORTER | 27


Tennessee rivers. The majority of the lock/dam maintenance work does not prohibit the passage of barge tows, as auxiliary measures are in place. There are exceptions on two rivers—the Arkansas River locks at 51/108, which will be closed August 23 through September 12, and the Illinois River locks at 80/158/231/245/271, which will have full closures, depending on the area, ranging from July 1 through October 28. • There are over 14,000 barges in operation on the Mississippi River and contributing rivers (each able to carry the equivalent of 18 railcars, or 90 trucks).

28 | COAL TRANSPORTER

• The Mississippi River and its feeder rivers and tributaries represent 12,000 navigable miles and reach 33 U.S. states and 2 Canadian provinces. • Export capacity is virtually limitless with the utilization of midstream cranes. As more cranes are needed, more cranes are added. • Deep draft vessel movements: in 2019, approximately 6,400 vessels were handled on the river; in 2020 (through June), approximately 3,000 vessels were handled.2 • The annual Mississippi River export/import tonnage handled is approximately 300 million tons.

As is evident from the time, effort, and funding put into America’s marine superhighway, as well as the other U.S. ports supporting waterborne commerce, the action to create change by those who came before us is in full fruition. While there will always be the need for improvement/maintenance and the like, the hard part has already been done. It is now up to us to ask ourselves, how do I use these readily available resources to adapt to the ever-blowing winds of change?

Footnotes

Big River Coalition. Dredging Update. Louisiana Maritime Association. Vessel Movement Statistics Report.

1

2

David Ryan is Vice President of Sales and Marketing at Associated Terminals, the largest stevedoring and terminal services provider operating on the Lower Mississippi River. Previously, he served as Director of Sales at St. James Stevedoring.


Reflections / Gayle TenBrink

GAYLE TENBRINK

“Go west, young (wo)man!”

I

’ve always had a hard time saying “no” to the NCTA. So when I was asked to share my “Reflections” for Coal Transporter, I decided that my “Yes, why not?” would provide an opportunity not only to reflect on my career in the rail and coal industries, but to thank the many people who guided and befriended me along the way. In 1981 I was fresh out of college, having transferred from the University of Michigan to the University of Texas at Austin for my senior year and marriage to my petroleum engineering student boyfriend, Alan. Upon graduation, he accepted his first “real” job in San Francisco with BP, then operating as Sohio. With the mortgage on our newly purchased home at a staggering 17 ⅝% interest rate, I needed a job—fast. Luckily, I quickly landed a job with PLM, which managed railcars purchased by individuals as investment tax credits. After a few months in an administrative role, I moved to a position with their railcar

maintenance division (later spun off as Transcisco). This was my entry into the world of coal, as this division had established unit train maintenance facilities located along major coal transportation routes emanating from the Powder River Basin, as well as smaller shops in the east. My new responsibilities took me to large shops in Wyoming, Montana, and Nebraska, as well as to scattered locations along other coal routes. I remember my first business trip to visit AEP: my luggage missed the connection in Chicago and followed me a day behind as I travelled to power plants throughout the Appalachian region. It was a good lesson in learning to adapt and roll with the punches! On another occasion, I had the chance to ride in our small company plane, visiting Arizona Electric Cooperative’s Cochise plant. The pilot, Woody, asked if I wanted to sit up front with him—sure! After a time, I noticed the fuel gauge moving quickly toward empty. Woody noticed my nervous glances, calmly advised that the fuel gauge didn’t

COAL TRANSPORTER | 29


“I truly enjoyed working with both groups and strongly encourage those of you who can to get involved! Believe me, you won’t find more dedicated, hard-working people anywhere.” –Gayle TenBrink

30 | COAL TRANSPORTER

work, and assured me that we were fine. Not sure that made me feel better! After eight years of working in San Francisco, Alan and I relocated with our growing family to Seattle, his childhood home, and I thought I had left the industry for good. The next few years were happily busy raising our two children and renovating an older home. One day, however, the phone rang and an old PLM colleague asked if I would consider working for Transcisco out of my home for as many hours as I could manage. It took me about two seconds to say “Yes!” A year later, Trinity purchased Transcisco and, after some initial hesitation about my telecommuting, decided they would allow me to continue the arrangement. It wasn’t as easy to do 25 years ago, but we made it work! It was during my Trinity years that the NCTA became an important part of my professional circle. While my tenure with the group doesn’t reach as far back as that of some other old-timers (and I can’t believe that I’ve just put myself in that category!), I have a vague recollection of the organization being divided into eastern and western groups. I heard stories of the B.C. (Before Canter) days, but never experienced them. There weren’t many women at the conferences when I first attended—something that has certainly changed over the years. At one fall conference about 20 years ago, I recall talking with a small group of men at a reception. A colleague said jokingly that he was going to have to scold his wife for having forgotten to pack his tie pin. Then another man in the group asked me if I left meals ready in the fridge for my family when I travelled. Wait a minute here, I told myself … a man has someone pack for him, while I’m expected to have dinner on the table even though I’m 1,200 miles away from home? I need a wife! The NCTA Operations and Maintenance group provided invaluable opportunities for learning and networking, and I spent 10 years serving on its Executive Committee. With their backing and support, I’d like to think that I played at least a small role in furthering the equipment health monitoring that is now such an important part of moving coal safely. I also spent several years serving on the AAR Arbitration and Rules Committee, where I strove to be a


voice for the private (non-railroad) railcar community. After transitioning from an operations to a commercial role at Trinity, it was time for me to move on from the O&M Executive Committee. But it wasn’t long before I was asked to consider sitting on the NCTA Board. I truly enjoyed working with both groups and strongly encourage those of you who can to get involved! Believe me, you won’t find more dedicated, hard-working people anywhere. Leaving Trinity was hard—but easy. Hard because after 25 years with the company, not to mention more years with earlier employers, I’d developed strong personal and professional relationships and I truly enjoyed my job. On the other hand, it was easy because after many years and many thousands of miles of travel, it was nice to be able to put my suitcase away and shut the laptop for days at a time. I now have a granddaughter who loves to sit on Nana’s lap and read books, and grandchild number two is on the way. As I write this, we as a nation are struggling with the uncertainties caused by the COVID-19 virus. Uncertainty is something the coal industry battles increasingly, and it can be hard to find optimism for the future. But as COVID-19 has shown us, we never know what the next weeks and months will bring. My hope is that dependable, affordable, plentiful coal will continue to be an energy choice for our future, and that the NCTA will grow and thrive.

celeb r

ing at

Slover & Loftus LLP Integrity | Experience | Leadership

YEA RS

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

www.sloverandloftus.com (202)347-7170 | Washington, D.C. COAL TRANSPORTER | 31


0&M Conference / Review

2020 Operations and Maintenance Conference The Historic Strater Hotel, Durango, Colorado August 17-19, 2020

N

CTA’s annual Operations and Maintenance Conference, held in person August 17-19, 2020, at the historic Strater Hotel in Durango, Colorado, offered a robust speaker program and virtual attendance options for members facing corporate travel restrictions. NCTA utility members were invited to participate live or via Zoom link in the Monday morning “utility only” roundtable that kicked off with a presentation by Steve Dobies, A. Stucki, and Chris Tsang, DTE Energy, on “Preventative vs. Reactive Wheel Maintenance: A Case Study for Asymmetric Wheel Wear and Life Extension.” Monday afternoon’s “all member” roundtable followed a similar live/virtual format and began with a presentation by Nichole Fimple and Ron Hynes, Association of American Railroads, on the recent revisions to AAR Field Manual Rule 4.A regarding brake valves. Tuesday’s live general session included presentations on brake system maintenance for extended long-haul service, conditionbased maintenance, coupler system and air brake COT&S, hand rolling of bearings and measuring adapters, and “Railcar 101” topics. The conference also featured a host of social events, including a scenic tour on the historic Durango and Silverton Narrow Gauge Railroad; a guided tour of the Durango & Silverton Yard and Roundhouse; and an evening social reception featuring a wine bottling experience at Durango’s Four Leaves Winery. 32 | COAL TRANSPORTER

Mask wearing and social distancing were observed throughout the conference.

David Carlile, Lighthouse Resources, bottles NCTA Private Label barbera wine.

Kevin Johnson, Nebraska Public Power District, and wife Michelle.

Four Leaves Winery entrance.

The tour of the yard and roundhouse featured an up-close look at coal-fueled steam locomotives.

Sara Voorhees, Doyle Trading Consultants, displays her finished product.


Thanks to Our O&M Executive Committee! NCTA thanks our O&M Executive Committee for their hard work in putting together this fantastic program:

Chairperson Cathy LeFevers, Duke Energy

The Harper’s Private Car, an antique coach.

Vice-Chairperson Brent Wilson, Hum Industrial Technology, delivers remarks.

Chris Tsang, DTE Electric Company

Secretary Keith McCabe, Amsted Rail

Committee Tod Boothe, Luminant DeWayne Bradford, Southern Company Generation

Touring the Durango and Silverton Railroad yard.

Steve Dobies, A. Stucki Justin Goertz, Lower Colorado River Authority Kevin Johnson, Nebraska Public Power District

D&SNG’s history stretches back 138 years.

Program chairman Kevin Johnson, Nebraska Public Power District, at the podium.

Kevin Koepke, Appalachian Railcar Services

Thanks to Our Sponsors! Platinum Sponsors

Gold Sponsors

Virtual connection options for conference sessions were available to conference sponsors and registrants.

Vincent Moore, New York Air Brake, addresses conference attendees.

Silver Sponsor

Banner Sponsors

Reception at the Four Leaves Winery. COAL TRANSPORTER | 33


NEWS ROUN AAR Boosts Oversight of Older Railcar Brake Valves

Association of American Railroads has moved to increase oversight of air brake valves on older railcars exposed to cold weather. At the April 2020 meeting of AAR’s Arbitration and Rules Committee, a proposal to revise Field Manual Rule 4 and Appendix A to address renewal requirements for brake valves regarding age and cold weather temperatures was reviewed and approved. The changes took effect July 1, 2020. The following logic has been applied by Railinc to identify cars that are suspected to have overage brake valves: • Cars that are 14 years or older (13-14 years old for the Maintenance Advisory), • Carry coal, grain, High Hazardous Flammable, or Toxic Inhalation Hazard commodities, • Travelled north of the 37th parallel between November 1-April 1 over the past two years, and • No component tracking or Car Repair Billing Data Exchange records found, indicating brake valve replacement.

Private car owners with incomplete maintenance records were advised to update repair information in the Railinc database by July 17, 2020, to avoid cars being placed on the Early Warning/ Maintenance Advisory and becoming subject to valve replacement at the owner’s cost.

NCTA’s Ward Presents at Rail Insights Conference National Coal Transportation Association Executive Director John Ward was a presenter at Railway Age’s sixth annual Rail

34 | COAL TRANSPORTER

Insights conference June 17, 2020. Ward presented the shipper’s perspective of current rail markets along with a representative of the American Fuel and Petrochemical Manufacturers Association.

NCTA Comments on STB Filings

NCTA filed comments in two U.S. Surface Transportation Board proceedings with potential to affect shippers of coal and related commodities. They include: Clean Water Act Preemption—On May 22, 2020, NCTA filed a second set of comments in a case intended to resolve whether discharges incidental to the normal operation of railcars in transit are subject to the Clean Water Act’s discharge prohibition and related permitting requirements. On November 27, 2019, the Association of American Railroads asked STB to find that federal law preempts the environmental permitting requirements for railcars in transit. NCTA filed comments in support of AAR’s petition, indicating that an STB declaration would create regulatory certainty regarding established industry practices for controlling coal dust leakage from railcars. The issue arises from a 2016 federal district court decision in Washington state (Sierra Club v. BNSF Railway) in which the court held that railcars in transit are subject to the CWA’s discharge prohibition, but did not rule on the question of preemption before the case settled. In its most recent comments, NCTA noted that action by STB is needed before anti-coal activists mount any legal challenges. “The Board should not wait for potentially irreversible damage to the coal industry to occur before taking action on this matter,” NCTA wrote. “The regulatory landscape surrounding coal is replete with examples of regulations that were later overturned (i.e., Mercury and Air Toxics Standards,


HIGH COUNTRY RAILCAR

NDUP as well as carbon emissions standards) but only after the industry paid for and implemented compliance measures that have inflicted permanent damage to the industry.” Demurrage Billing Requirements—In comments filed June 5, 2020, NCTA provided input in a supplemental rulemaking initiated by STB on April 30, 2020, when it issued a trio of related decisions concerning railroad demurrage and accessorial charges. The decisions resulted from more than a year of testimony and deliberations over railroads using demurrage fees as an incentive to improve shipper efficiency as railroads increasingly pursue some form of Precision Scheduled Railroading. NCTA participated in public hearings on the demurrage and accessorial charges matter with both written and oral testimony and filed supplemental comments in the rulemaking. NCTA’s comments were noted three times in the STB decisions. STB invited further comment on proposals to require railroads to provide certain information with demurrage invoices, such as “(1) the date range (i.e., the billing cycle) covered by the invoice; (2) the original estimated date and time of arrival and the date and time cars are received at interchange; (3) the ordered-in date and time; and (4) machine-readable data.” NCTA commended STB for acting, but expressed concern that the burden of proof may continue to fall on shippers in the event of disputes. “These proposed requirements should have the result of providing greater transparency of the data needed to help both shippers and carriers expedite review of any claimed charges,” NCTA wrote. “NCTA also recommends that if these new rules and practices are adopted, the Board should implement an enforcement mechanism to require that the carriers are compliant with the Board’s policies.”

Specializing in: • • • • • •

Lease return inspect Decal and AEI Tag replacements Door Cylinder Rebuilds Spool Valve Rebuilds Preventative Maintenance Mobile Repairs

High Country Railcar 3641 Watts Street Timnath CO 80547 mayog@highcountryrailcar.com 719-821-1380

COAL TRANSPORTER | 35


NCTA CALENDAR

OF EVENTS 2020

September 21-23, 2020 Forty-Sixth Annual Business Meeting and General Conference The Brown Palace Hotel, Denver, Colorado

April 12-14, 2021 Spring Conference Silverado Resort and Spa, Napa, California June 7-9, 2021 Operations and Maintenance Conference Grand Hotel Marriott Resort, Golf Club and Spa, Point Clear, Alabama July 23, 2021 Advertising and editorial deadline for Issue 2, 2021 of Coal Transporter magazine

September 2020 NCTA Scholarship awards announced for member’s children scholarships December 30, 2020 Receipt due at NCTA office of all re-certification forms for the UMLER fee waiver for calendar year 2021

2021 January 31, 2021 Payment due for 2021 annual membership fees February 5, 2021 Advertising and editorial deadline for Issue 1, 2021 of Coal Transporter magazine

July 31, 2021 NCTA Scholarship application deadline September 20-22, 2021 Forty-Seventh Annual Business Meeting and General Conference Talking Stick Resort, Scottsdale, Arizona September 2021 NCTA Scholarship awards announced for member’s children scholarships December 30, 2021 Receipt due at NCTA office of all re-certification forms for the UMLER fee waiver for calendar year 2022

Index to Advertisers Appalachian Railcar Services, LLC . . . . . . . . . . . . . . . . . Outside Back Cover GKG Law, P.C.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 High Country Railcar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Lexair Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inside Front Cover Lighthouse Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 36 | COAL TRANSPORTER

Min Tech. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inside Back Cover NexGen Coal Services, Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Salt River Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Slover & Loftus LLP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Strato Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9


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