US floods could slow coal exports, some sources say
HOUSTON, June 17 |
HOUSTON, June 17 (Reuters) - Floods on the upper Mississippi River could slow U.S. coal exports because of stalled barge traffic and disrupted rail shipments, some industry sources said on Tuesday.
Other experts said problems will diminish as the flood crest moves to the lower Mississippi, which unlike the upper reaches is not dependent on locks to raise and lower vessels. These experts said the impact on coal should be limited.
Major U.S. railroads have reported problems due to flooding. But it has been possible to route most domestic coal deliveries around high water, electric utility watchers said.
The most affected coal is the sub-bituminous stuff mined in the Powder River Basin of Wyoming. It moves by rail to the south, away from the river, and to the east, across it.
"Most of the routes for PRB coal to the east are cut off," a mining company official said.
PRB is not itself a major export commodity, but it has been flowing to eastern utilities to replace Appalachian bituminous coal that is moving into the export market. With less PRB, more eastern coal could stay home, he said.
Other coals -- Western and Illinois Basin bituminous coals -- are more likely to join Appalachian in the export market, but they enter the Mississippi Valley south of the flooding, and there has been little impact so far, sources said.
"We're seeing some barges being stuck at their origination points rather than destinations due to the flooding, but overall are not seeing much impact to our coal shipments," said Emily Mir Thompson, spokeswoman for Kinder Morgan (KMP.N), which operates several coal terminals.
Another terminal operator on the lower river said flooding up north actually has sent him more business.
"It has deviated cargo," said Bruce Conti, president of IC Rail Marine (CNI.N) in Louisiana between Baton Rouge and New Orleans. "Stuff that can't move up there is coming to us and moving out by barge."
There is some concern about what happens when the flood crest moves farther south, said New York-based coal trader Frank Kolojeski. "High water could impact barge moves within the next couple of weeks, so stay tuned," he said.
Sandor Toth, editor of the River Transport News, which covers U.S. inland barge traffic, said the lower Mississippi will not close. Below Cairo, Illinois, there are no locks to be flooded.
"Once this big glob of water moves through, it'll cause some navigational issues, but the river won't close like it has on the upper Mississippi," Toth said. "On a panic scale of one to 10, this is a 3 or 4."
The lower river already had been operating under restrictions because of high water that started in the Spring. Among restrictions that are imposed are fewer barges in each tow and minimum towboat power requirements for tows. (Reporting by Bruce Nichols; Editing by David Gregorio)
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