A Prescriptive Analysis of the Indiana Coal Transportation Infrastructure

This report presents the findings of a scoping study of Indiana’s coal transportation infrastructure. Throughout the literature search and investigative phases of this project, it was clear that there exists growing awareness of the importance that transportation plays in the domestic coal industry. There is evidence that suggests transportation costs may be higher than the cost of mining coal. Numerous studies suggest that coal transportation can be developed and utilized for significant competitive economic advantage. The Powder River Basin area in Wyoming is a stellar example of how the combination of a large natural resource and careful transportation planning can result in tremendous economic advantage to an area. It is estimated that nearly 40 percent of the coal burned in U.S. power plants comes from this area, which has increased coal production nearly 40 percent since 1997. Significant rail infrastructure investments have been made between this region and the national rail infrastructure making it cost advantageous to ship Wyoming coal nationwide. The objective of this project was to quantitatively examine the coal transportation infrastructure relative to power plant operations in the state of Indiana and construct a computer simulation model that can be used to quantitatively assess rail scenarios. Computer simulation is a tool that can provide proof of concept. Using simulation, railroads can be proposed, constructed, and operated on a computer. Experiments can be conducted to optimize the operations of the scenario. The intent of this project was not to develop a truly comprehensive analysis of the Indiana position and potential with respect to the national coal transportation, but rather conduct a scoping study that would highlight the issue and suggest a methodology for further analysis. Throughout the duration of this project, we were encouraged by the proliferation of articles about coal and coal transportation, the citing of the importance of logistics and transportation infrastructure to Indiana’s future economic success by the Indiana Chamber of Commerce, and the numerous requests for scenario studies from interested parties such as the Ports of Indiana, Vectren Energy, the City of Vincennes, Duke Energy, and NiSource. Future development of the methodology contained in this report into a comprehensive tool that can provide policy direction the state of Indiana is recommended