A Dip in Coal Hauling Costs

The price of hauling coal to power plants, a major factor in the cost of electricity, is on the wane, according to government data.

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The cost of hauling coal to power plants, a factor in power rates, is dropping slightly. (Photo By: Getty Images/iStockphoto)

The Energy Information Administration said coal hauling costs via all modes of transportation dropped about 6 percent in 2016.

That’s important to electric cooperatives and other utilities because transportation costs account for nearly 40 percent of the total cost of coal delivered to power plants. The power sector consumes more than 93 percent of coal in the United States, EIA said.

While EIA did not delve into reasons for the decline, transportation fuel costs have steadied in recent years.

Among freight railroads, preliminary statistics for 2016 put average national coal hauling costs at $19.13 per ton, a 5.1 percent drop from 2015 and the lowest since $19.12 in 2010.

About 70 percent of coal in the power sector moves over rail tracks, with barge traffic (13 percent) and trucks (9 percent) among other frequently used transportation modes.

“The increase in barge traffic coincides with the growth of coal produced in the Illinois Basin, which relies on shipments along the Ohio River and its tributaries for a significant portion of its production.” EIA said.

“Slight declines in shipments by truck coincide with declines in Appalachian production that supplied generating facilities a relatively short distance from the mines.”

The agency cautioned that national averages might not be applicable to individual coal basins or transportation routes.

The cost of coal hauling by rail from the Powder River Basin in Wyoming, the nation’s largest source of low-sulfur coal, was $19.70 per ton in 2016. The rail cost of coal from the Illinois Basin was $15.29.

In both cases, though, rail transportation costs were at a six-year low, according to EIA.

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