Mon, September 25, 2017 11:14 am
The National Coal Transportation Association (NCTA) held its annual fall meeting in Denver, Colorado Sept 18 -20 with an attendance level just shy of 150 guests. Led by Tom and Melinda Canter, the NCTA and its Board of Directors drew in presenters from all across the transportation landscape. DTC’s own Andy Blumenfeld led off the conference with an insightful but sobering presentation on the current status of the US thermal markets (please contact Dianna if you need a copy). The presentation was well received in the room and across the rest of the day, nearly all the presenters that followed referenced some of Andy’s comments and many were in agreement with his overall forecast. The overall temperature of the crowd was and continues to be one of hope that recent gains in the US Market will carry through the balance of the year and into 2018. Congratulations to Emily Regis (AZ Electric Power Coop) who was elected as the new president of the NCTA.
- Dan Vaughn of Coaldesk, LLC cast some light on the OTC markets, sharing there are only about 10-12 players actively trading currently. Calendar 2018 open interest on CME for CSX futures are just 30K tons/month and by contrast Calendar 2018 PRB open interest is at 10K/month.
- Debra Calhoun of the Waterways Council, Inc told the room that her group continues to advocate for much needed improvements on US inland waterways. The recent closure at Ohio River Lock and Dam 52 is not an isolated event but certainly caught the attention of many as this is a busy time on the river with not only coal moving, but with grain harvest season upon us. The Olmsted Locks and Dam project, once complete, will replace Locks and Dams 52 & 53 and should help ease congestion. Olmsted is projected to be complete in late 2018.
- John Gray of the American Association of Railroads burst some bubbles by bringing to everyone’s attention that 2017 coal loadings should not be viewed as a reflection of how good things are but rather a reflection of how bad things really were in 2016.
- Bob Yu of S&P Global (Platts) gave an incredibly informative talk on the US Natural Gas industry, sharing that production continues to gain momentum and that ongoing improvements to the process are increasing the amount of gas that can be extracted from fewer wells. Power burn has remained strong in 2017 despite higher prices and there seems to be consensus in the industry that exports will significantly increase baseload demand for natural gas.
- Ben Jones of the Tennessee Valley Authority (TVA) indicated that shrinking demand for power is making things tougher for the TVA but they remain committed as a group to bringing their customers reliable power at the best rate possible.
- Caryl Pfeiffer of LG&E and KU Services built on Ben’s sentiment though qualifying it with the fact that her base is significantly smaller than TVA’s. Caryl gave a good chunk of her time to addressing the new “tenant” of the White House and the spark of life he has breathed into coal via some of his early Executive Orders. Her most telling visual was a graph depicting US GDP vs Electricity Demand and just how tightly they were linked not long ago and are now sharply uncoupled.
- Mike McKenna of MWR Strategies stepped in for the Department of Energy as their speaker had to defer at the last minute. The presentation was focused on the recently released DOE Grid Stability Study. Mike pointed out the absurdity of the reference being made to a “power market” asking when was the last time anyone went to the 7-11 to purchase some electricity?
- Linda Brandl (UPN) and Jason Plett (BNSF) both took a few minutes to update the crowd on the status of issues in Texas following Hurricane Harvey. Both rails are back up and running at full service as they scrambled to restore operations.
- Mike McKenna of MWR Strategies had a very enlightening graphic in his presentation The Real Cost of Wind and Solar, that he referred to as the “duck curve” that demonstrated peak energy demand almost perfectly aligns with the end of peak solar availability. As a result, ratepayers end up paying more to sustain both solar and a secondary, more reliable source to fill the gap as solar drops off in the evening.
- Stan Dempsey of the Colorado Mining Association gave an insightful talk on the current issues faced by all levels of the industry in the state of Colorado. Of interest, 55% of CO electricity is still being generated by coal and in 2016, coal mines in Colorado paid $38 mm in federal and state royalties.
- Ann Warner of the Freight Rail Customer Alliance spent a portion of her time bringing the Rail Shipper Fairness Act to everyone’s attention. It is currently pending before the Senate Commerce Committee and if ultimately passed, would improve STB processes when determining rate reasonableness while also helping to clarify STB authority to address service emergencies on shipments moving under contract. The measure also calls for competitive switching within 100 miles.
- Randy Eminger of the Energy Policy Network closed out the event by tossing out a handful of eye opening statistics, notably that US taxpayers have spent $78 billion in subsidies for wind and solar from 2011-2016.
Special Guest Speaker:
- Deb Miller, Commissioner on the Surface Transportation Board (STB): The NCTA crowd was treated to a presentation from Deb Miler of the STB. She was very open and candid in her comments, sharing her current frustration with the Trump Administration and its slowness in insuring the STB has the resources it needs to be effective. The Commission was recently expanded from 3 members to 5; however, no nominations have been to fill the seats. Current issues for the STB include rate case regulation, reciprocal switching and of course the gorilla in the room, the CSX service concerns. Deb added that while the CSX has said their reported metrics are improving, the volume of complaints coming into the STB continues to be “a high number.” She was able to share with the crowd that the public information call with CSX is rescheduled for Oct 11 and implored anyone with issues to get signed up to participate in the listening session.
- In the last 10 years, unscheduled work stoppages for repairs on inland waterways have increased 700%
- Natural gas has gained 3 Bcf/day from Jan – Sept 2017
- If each of TVA’s 9 mm customers were to switch out just one incandescent light bulb for an LED, it equates to a $30 mm loss in revenue for TVA.
- If each of LG&E’s 900K customers were to replace one incandescent light bulb for an LED, they would be able to power a new 2,200 home sub-division with no change in the power demand.
Even More Travel for DTC: Hans Daniels grabs a change of clothes and is off to speak at the National Coal Council Fall Meeting in Birmingham, AL while Dianna Ridgway takes to the skies and attends the CAC Conference in Vancouver, British Columbia. They will share key takeaways here next Monday.