Coal Transport Demand Increases
Demand for coal transport is strong and getting stronger. Coal production is nearing record setting levels according to the Department of Energy. The U.S. coal output topped 1 billion tons for 2004 and the spot market price for coal has been soaring. CSX and Norfolk Southern, the main railroads serving central Appalachia have reported large increases in coal transportation, nearly 100,000 more carloads than the previous year. Both railroads indicate that they could do more, if the capacity was available. Robin Chapman , a spokesperson for Norfolk Southern was quoted by The Associated Press (Dec. 9, 2004) explaining "We're moving record volumes of coal, but we're tight on power, that is the availability of locomotives to move it. What you're getting is a more than usual amount of trainloads of coal in our rail yards waiting for power to move them. This has also created a shortage of empties for our customers."
A few coal company executives have also reported that the lack of rail transportation is reducing their ability to capitalize on additional coal sales. In fact, Massey Energy Company, West Virginia's largest coal producer, cited rail transportation problems as the a factor in reduced sales in the company's most recent quarterly report. According to the Associated Press article, the transportation issue has not caused any shortages at coal fired power plants. Utilities are keeping stockpiles low, due to rising prices.