EIA: Coal Transportation Costs Jump 50% in Last Decade
Location: New York
Date: 2012-11-20
The average cost of shipping coal by railroad to power plants
increased almost 50% from 2001 to 2010, with rail transport
accounting for more than 70% of U.S. coal destined to the electric
power sector, said a new report from the U.S.
Energy Information Administration.
Though they vary significantly, transportation costs accounted
for 40% of the average overall cost of coal delivered at electric
power plants in 2010. On average, nominal U.S. rail rates for
shipping coal grew from $11.83 to $17.25 per short ton from 2001 to
2010, EIA noted.
Rates grew slowly in the beginning of the decade before increasing
almost 11% in 2005, then continued to grow at a relatively robust
pace until the recession. The impact of the recession on
transportation rates was short-lived as rates grew more than 9% in
2010.
“National numbers can be misleading, however, as regional dynamics
tend to vary considerably among the six major coal basins,” EIA
said. “For example, Southern Appalachian coal costs increased more
than 10% annually in 2001-10, while Powder River Basin (PRB) rates
grew 1.5% over the same period. For a few PRB destination states,
rates fell during this period.”
The wide range in mine-mouth coal prices and transportation
distances across the U.S. create significant variation in the impact
of transportation rates on overall coal costs, with different basins
affected to significantly differing degrees, EIA said.
While rail transportation costs for Appalachian and Illinois Basin
coals as a percent of total delivered cost fall in the low 20%
range, the relatively low cost of PRB coal, and the long distances
it travels, results in transportation costs that averaged almost 60%
of the total delivered cost in 2010—more than the cost of the coal
itself.
State-level data show further variation in rate changes over
2001-2010. At the high and low ends, Virginia-to-Tennessee rates
grew 83% while Wyoming-to-Kansas rates fell 23%—a 106 percentage
point swing.
In this latest release of Coal Transportation Rates to the Electric
Power Sector, EIA has significantly expanded upon prior versions of
this report with the incorporation of new EIA survey data.
Previously, EIA relied solely on data from the U.S. Surface
Transportation Board (STB), specifically the confidential Carload
Waybill Sample. much of that information had to be withheld for
confidentiality reasons. With this current release, EIA augments STB
data with EIA's Power Plant Operations Report (EIA-923) data.
Unlike the Waybill sample, EIA-923 survey data are intended to be a
full population data set, EIA said. Utilizing the EIA-923 Survey's
much larger data coverage enables EIA to publish data over numerous
routes that were previously withheld, especially for state-to-state
rates.
Another feature of this latest release is the incorporation for the
first time of coal transport rates by barge and truck. As a
relatively new survey field however, barge and truck data currently
comprise a limited time series.
Further analysis will be conducted as more data are collected.
However, three years (2008-2010) are included in this initial
release, EIA noted.
This report covers railroad transportation rates from 2001-2010 and
barge and truck rates from 2008-2010. STB data covers 2001-2009 and
the newly-incorporated EIA data covers the period of 2008-2010.
For future releases, using EIA survey data rather than solely
relying on the STB Waybill will enable EIA to significantly improve
the timeliness of this report, releasing data within several months
of collection.
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