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Norfolk Southern and the transport of coal

Norfolk Southern maintains a diverse portfolio of commodities hauled across the Thoroughbred network daily, including intermodal units, general merchandise carloads, finished automobiles and automobile parts, and thousands of tons of raw materials and minerals. Historically, however, no single commodity is quite as unique as coal.

Most coal production in the United States takes place in three major coal-producing areas, two of which are served directly by Norfolk Southern and all of which generate coal hauled by Norfolk Southern:

The Appalachian coal region, home to predecessor roads like the Norfolk and Western and the Virginian, includes coal mined in Pennsylvania, Maryland, Virginia, West Virginia, Tennessee, Alabama, Ohio, and eastern Kentucky. The Interior region contains coal in Illinois, Indiana, Missouri, Texas, and western Kentucky. Norfolk Southern serves this region, occasionally referred to as the Illinois River Basin. The third major region is the Western coal region, including coal mined in Wyoming, Montana, Utah, Colorado, North Dakota, New Mexico, and Arizona. Commonly known as the Powder River Basin (PRB) region, Norfolk Southern receives PRB coal from our western partners including Union Pacific and BNSF.

The majority of coal from these regions is consumed at coal-fueled power plants in the United States (steam coal) or used for making steel (metallurgical). One of the predominate reasons for coal as a fuel choice is its cost-effectiveness, and one reason for coal’s cost-effectiveness is that 70 percent of the coal delivered to coal-fueled power plants is delivered by freight rail. In addition to coal, electricity is also generated using other fuels, including nuclear power, wind, solar power, hydroelectric power, and natural gas.

More recently, coal transportation across Norfolk Southern has slowed, largely in part to a decrease in utility coal use by more than 20 percent. The rapid decline in natural gas prices has increased the share of electricity generated from natural gas, particularly when compared to the cost of electricity generated from coal.

Increasingly stringent environmental regulations have targeted coal-fueled generation. Over the years, the affordability of coal-based electricity has been a major factor behind America’s economic growth and global competitiveness. In the years ahead, coal will continue to be required to meet America’s growing energy demand and keep electricity supplies reliable and affordable. That being said, coal and coal-fueled electricity generation face serious environmental challenges, including concerns related to emissions (greenhouse gases, mercury, particulates, etc.), coal ash disposal, effluents, ozone, and other issues. Fortunately for all, huge progress has been made in addressing these challenges. From 1970 to 2011, for example, emissions of sulfur dioxide (SO2), nitrogen oxides (NOx), and particulate matter (PM) per kilowatt-hour from coal-fueled electricity generation have been reduced by almost 90 percent, according to the Energy Information Administration (EIA) and Environmental Protection Agency (EPA) data. By 2015, more than 90 percent of U.S. coal-fueled electric generating capacity will install clean coal technologies and other advanced emission controls to further reduce emissions of SO2, NOx, PM, mercury, acid gases, and non-mercury metals.

Some current and potential future EPA regulations risk drastic cuts in coal use (and, not coincidentally, sharply higher electricity prices). Electric utilities need both reasonable standards and adequate compliance deadlines to avoid disruptions that could raise electricity costs and perhaps threaten electricity reliability. In addition to reasonable EPA regulations, Norfolk Southern supports the development of advanced carbon capture and storage (and other clean coal) technologies. By doing so, America would continue to produce affordable electricity from its abundant domestic coal; energy independence would be promoted; and the environment would be protected. It represents a win-win-win situation for all parties involved.

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