US floods could slow coal exports, some sources say

By Bruce Nichols

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.