Over One Billion Tons of Coal in 1985: Can the Railroad Industry Handle It?

Any evaluation of our country\u27s resource potential must carefully consider the transport network and the constraints which it places upon future energy development and growth. The federal government has a vague goal of energy independence (or, at least, less energy dependence), but it has not developed a coherent energy plan—a critical element of which is energy transport. The paper analyzes the uncertain coal outlook facing the rail industry, translates these coal scenarios into alternative financial projections for the rail sector, and clarifies the most urgent federal decisions needed in the energy-transport policy matrix. The rail industry is being asked to make substantial long-run financial commitments even though it is unclear how much coal will be produced and what the intermodal split will be between rail, truck, pipeline, and barge. Such uncertainty raises the specter of numerous railroads chasing after the same coal transport business. The success of any coal-centered energy policy is, therefore, directly linked to the federal government\u27s ability to simultaneously formulate an internally consistent set of national energy and transportation policies. It is shown that failure to consider the energy-induced pitfalls facing the railroad industry could lead to severe financial strain on the strong Western roads, and thus a counterproductive energy policy