Coal, Transportation and Storage of

views updated

COAL, TRANSPORTATION AND STORAGE OF

Coal competes primarily in the market for low-cost boiler fuels. Coal is also characterized by a relatively low energy content per unit of weight (at best twothirds that of residual oil). Consequently, low-cost and efficient transportation is essential to the competitiveness of coal.

OCEAN TRANSPORTATION

World trade in coal totaled 576 million tons (524 million tonnes) in 1998, of which 523 million tons (476 million tonnes) shipped in oceangoing vessels. Coal shipments use the same dry bulk vessels that transport other bulk commodities, such as iron ore and bauxite, so vessel rates for coal shipments are hostage to wider market forces. However, the cyclic pattern observable in vessel rates disguises the long-term trend in which rates have varied little in nominal terms. For example, spot vessel coal rates in the 1998–1999 time period were about the same as in the mid-1980s, varying between $5 and $10 per ton.

Coal is generally shipped either in vessels capable of transversing the Panama Canal (Panamax vessels of 60,000 dwt) or Capesize carriers of 200,000 dwt and greater. Vessels may be designed for self-unloading or be "gearless" carriers that require onshore bulk-handling equipment.

BARGE TRANSPORTATION

Coal-carrying barges move in tows of fifteen to forty barges, pulled by a single towboat of 2,000 to 10,000 hp. A "jumbo"-size barge carries 1,800 tons (1,633 tonnes) of coal, so a large tow can move 72,000 tons (65,304 tonnes) of coal, as much as five unit trains. These large volumes result in significant economies of scale. Barge rates can run (on a cost-per-mile or cost-per-kilometer basis) a quarter or less of rail rates.

The primary cost variable in barge shipments is fuel; a midsize towboat can consume 5000 gal (18.9 kl) of diesel fuel daily. Barge shipments are also dependent on weather conditions; low water or frozen rivers and canals can halt shipments. As with ocean vessels, the barges that move coal also ship other bulk commodities, making the rates and availability of barges for coal shipments dependent on conditions in other markets. Backhauls (i.e., shipment of one commodity to a terminal and return with a different product) can substantially reduce coal rates.

Barges receive coal at a dock to which the coal is initially transported by rail or truck. These transloading facilities can play an important role in the coal supply system as intermediate storage sites and by providing facilities where different coals can be blended into a custom product.

RAIL TRANSPORTATION

Rail-transported coal is typically moved in unit trains that operate in dedicated shuttle service between a mine and a destination. Unit trains operating in the western United States and Canada consist of 100 to 120 lightweight aluminum railcars carrying upward of 121 tons (110 tonnes) of coal apiece, or more than 14,000 tons (12,700 tonnes) per train. In the 1990s, distributed power (DP) came into widespread use in the western United States. In this system a remotely controlled engine is put into the middle of a train, allowing greater traction and control of train motion. DP trains can consist of 135 cars and are the most efficient method of rail transportation of coal.

Railroad productivity has increased dramatically since the mid-1970s. In part this reflects reform of outdated labor practices, but the technical sophistication of the rail industry is rarely appreciated. Modern systems use microwave Centralized Traffic Control (CTC) systems to move trains safely with minimal between-train clearance, allowing substantial increases in system capacity. Modern diesel electric locomotives rely on microprocessor and alternating-current motor technology to provide enhanced power (6,000-hp class) and greater traction, allowing two or three engines to do the work of five earlier models. All aspects of the rail system, from operations to invoicing, are heavily dependent on computer processing.

Because rail systems exhibit economies of scale, there is a tendency toward consolidation manifested either in state ownership or merger of privately owned systems into a handful of competitors. High barriers of entry into the rail business allow the exercise of monopoly power over rates to customers with single-rail access. This has been a persistent issue in nations with deregulated rail industries, such as the United States and Canada. Rate complaints by coal mines and consumers have been common in these countries. On the other hand, railroads have had difficulty earning adequate returns on investment, due to intermodal competition, heavy capital investment requirements, and other factors. The tension between shipper demands for low rates and high-quality service, and railroad efforts to improve profitability, was a political controversy in the nineteenth century and continues to be an unresolved public policy issue in the early twenty-first century.

TRUCK TRANSPORTATION

Truck transportation is used to move coal to a transloader for placement onto a water or rail carrier, or for direct shipment to the customer. Trucks have the advantage of routing flexibility and modest capital requirements, but coal can be economically transported for at most about 100 miles (160 km) one-way or less, due to the high unit cost of moving a low-value product in relatively small batches.

Coal-carrying vehicles are typically end-dump trucks with a carrying capacity of roughly 25 to 50 tons (22.7 to 45.4 tonnes), depending on local road conditions and safety regulations. In the 1990s, strides were made toward increasing the productivity of truck operations, such as higher-capacity vehicles. But while these improvements have enhanced the ability of trucks to compete with railroads for short hauls, they have not significantly increased the maximum radius within which truck shipments are economical.

COAL SLURRY PIPELINES

Coal slurry pipelines have been widely discussed, but few slurry pipelines have been built. In addition to the Black Mesa operation in Arizona, a 38-mile (61-km) pipeline was built by the Soviet Union, and a 108-mile (173-km) pipeline in Ohio was mothballed in 1963 after six years of operation. It is arguable to what extent the limited use of slurry pipelines is due to economics or to political opposition from rail carriers and interests concerned with water rights.

The most successful slurry operation is the dedicated pipeline that serves the 1,580-MW Mohave Generating Station in southern Nevada. The plant receives all of its coal via a 273-mile (437-km) pipeline built in 1970 that originates at the Black Mesa mine in Arizona. Coarsely ground coal is mixed with water (the slurry is about 47% solids by weight) and pumped through an 18-inch (46-cm) pipe. At the plant the coal is dewatered using centrifuges. The pipeline has a capacity of about 5 million tons (4.5 million tonnes) annually.

STORAGE AND OXIDATION

Storage is necessary at several points in the coal supply chain. Because coal is transported in batches (e.g., a unit train or a vessel), rather than moved continuously through a network, like natural gas, the supply chain must accommodate surges and lulls in demand at the mine; at the origin and receipt dock or port for water shipment; and at the end user, such as a power plant. The global wave of privatization and deregulation, particularly in the electric sector, has increased pressure on logistics managers to make the coal supply chain as seamless as possible to minimize the amount of coal in storage at any time. Stored coal ties up working capital and, as discussed below, can deteriorate and create safety hazards

About 2.5 million tons (2.3 million tonnes) of coal are burned daily in U.S. power plants. This is equivalent to roughly 21,000 railcars in transit, so it is apparent that coordinating production and consumption is no easy task. Accidents, rail strikes, natural disasters (e.g., floods that take out bridges and rail lines) and severe weather (e.g., deep river freezes that halt barge traffic) can all severely disrupt deliveries for utility customers dependent on a reliable coal supply for base load plants. Nonetheless, to reduce costs U.S. utilities have significantly reduced typical inventory levels over time. Whereas a coal inventory of ninety days of supply was once typical, inventories now frequently run in the range of thirty to forty-five days.

Another reason to keep inventories low is the potential for storage problems. Coal in storage must be carefully handled. Improperly stored coal can oxidize (weather), causing a loss of heat content. And if heat is allowed to build up in a stagnant coal pile (or in a vessel, barge, or railcar), the coal can self-ignite. Self-ignition is particularly a risk with lower-grade subbituminous coals and lignite. To avoid oxidation, coal piles should be turned frequently so that heat can vent, and piles should be packed and shaped to minimize surface exposure.

Stan M. Kaplan

See also: Coal, Consumption of; Coal, Production of; Locomotive Technology; Transportation, Evolution of Energy Use and