TABLE 16.-BITUMINOUS COAL HANDLED BY CLASS I RAILROADS AND REVENUE RECEIVED, 1971-Cont.

TABLE 17.-REVENUE FREIGHT ORIGINATED BY SELECTED COMMODITY GROUPS, CLASS I RAILROADS, 1972

Source: U.S. Interstate Commerce Commission, Freight Commodity Statistics-Class I Railroads in the United States, annual.

Flexibility of rail service

Beginning in 1939, the ICC permitted railroads to offer discounts for multiple car shipments. About 20 years later, the unitized train concept came into being. An example of such a unit train is one which leaves Parrish, Alabama, with 47 loaded cars, picks up another 17 cars in Boothton and delivers the cars-each loaded with about 100 tons-in Wilsonville, Alabama. The cars are unloaded with a rotary dumper which takes only 90 seconds to empty a car. Other systems are being tested which allow cars to be unloaded without being stopped-reducing the time required to unload a 10,000 ton unit train from four hours to 20 minutes.

56-252 O 76-57

Railroads have also been able to institute major economies of operation which enable them to collect shipments from several small mines and place them into unit trains. Smaller equipment is used to collect these shipments and place them in silos where they can be loaded into unit trains at the rate of 10,000 tons in four hours.

Trainload service differs from unit train service; the latter operates in a shuttle service on a predetermined schedule and using assigned equipment, while the former makes use of a more random form of operation.

The following are among the considerations which railroads take into account in determining the level of charges for unit train or trainload service: (1) Origin Service Considerations

a. Trackage necessary to reach mine

b. Loading method

c. Loading time for each train

d. Loading schedule of mine

2. Use Haul Service Considerations

a. Train schedule

b. Routing

c. Train size

d. Trackage upgrading

e. Trackage grades

f. Annual tonnage to move

g. Traffic density over routing

h. Intercharge facilities over joint routes i. Types of cars

j. Train labor characteristics

3. Destination Service Considerations

a. Trackage necessary to each receiver

b. Unloading method

c. Unload time for each train

d. Unload schedule for receiver

Table 18 depicts the savings which are derived from the various forms of train shipments of coal. The savings of unit trains vs single car rates in this one regional example are almost one-third. Savings between 38 cents and 281 cents per ton between multiple car and annual volume trains over single car rates have been recorded in the Illinois-Indiana-western Kentucky region. While unit train rate data for western states is not available, Table 19 depicts the savings of other forms of service over single car rates in that portion of the country. This table shows savings of nearly 28 percent.

TABLE 18.-Average rates charged for transportation of coal from Appalachian region to trunk line and New England territories by type of train service

Source: Interstate Commerce Commission, Ex Parte 270 (Sub. No. 4), Dec. 3, 1974. Summary of rail advantages

Having presented this data, it is important to note the conclusions which flow from it:

(1) Railroads have the ability to adjust their rates to remain competitive with other energy sources and modes of transportation.

(2) Railroads have the ability to adjust their type of service to meet the needs of shippers and consumers and to meet the demands of competition. (3) Railroads have the flexibility to serve both small and large shippers and receivers with rates that are competitive.

The following are among the conclusions of the Interstate Commerce Commission in its examination of coal freight rates (Ex Parte No. 270, Sub. No. 4, December 3, 1974).

"One of the essential elements of a reasonable (coal freight) rate structure is that it fosters sound economic conditions in transportation and among the several

carriers. As a whole, we regard as satisfactory the financial condition of railroads deriving more than 20 percent of their revenue from coal." (page 313)

The ICC "found that the freight rate structures on coal are, with few exceptions, compensatory and not unreasonably high."

TABLE 19.—Average Rate Charged for Transportation of Coal from Origin Points West of the Mississippi River by Type of Train Service

Type of service:

Single car rates_

Annual volume rates..
Multiple-car rates___.

Rate

(cents)

714. 7

568. 3

518. 3

Source: Interstate Commerce Commission, Ex Parte 270 (Sub. No. 4), December 3, 1974. Several claims have been made about the higher energy efficiency of pipelines as compared to rail transportation. Yet, the facts show that there is very little difference between the two modes of transportation. Slurry pipelines are 96 percent energy efficient while unit trains are 98 percent energy efficient. That is, 4 percent of the energy value of the coal being transported is absorbed in the pipeline transportation process, while the comparable figure for rail is 2 percent.' The Association of American Railroads has stated that railroad unit trains hauling coal use 250 BTU's per ton mile while coal slurry pipelines use about 290 BTU's per ton mile.

In addition to the relative comparability between the two modes. in energy efficiency, hopper cars are a more efficient use of steel than pipeline. While a 10 inch pipeline carrying the equivalent load of 100 hopper cars each with a capacity of 100 tons would require over 64,000 tons of steel for its construction, the hopper cars would require only 30,000 tons of steel.10

4. COAL SLURRY PIPELINES ARE NOT NECESSARY TO MEET THE PROJECTED INCREASES IN DEMAND FOR COAL

Map 2 depicts the coal slurry pipelines which are planned in the United States. The two largest are the 1,030 mile Wyoming to Arkansas line and the 1,100 mile Colorado to Texas line.

⚫ Statement of John M. Huneke, Vice President, Energy Transportation Systems, Inc. before the Senate Committee on Interior and Insular Affairs, June 11, 1974, p. 70; and Riber, Soo and Stukel, "The Coal Future: Economic and Technological Analysis of Initiatives and Innovations to Secure Fuel Supply Independence", University of Illinois, May, 1975; p. IV-17.

10 Statement of John W. Hanifan, President, The Chessie System, before the Senate Committee on Interior and Insular Affairs, June 11, 1974, p. 120.

Direct competition with rail transportation

Map 3 shows that both of these lines are in direct competition with existing rail lines. It is the nature of coal slurry pipelines that they will take coal from one or two large mines and deliver it to one or two large utilities. As such they will enter into long-term contracts for the supply of 10 to 25 million tons of coal per year over an extended period of years. The nature of their operation will, therefore, put them into direct competition with railroads who would use longterm contracts to put together and operate unit trains. Railroads competing with these two proposed coal slurry pipelines will be forced to rely more heavily on spot coal traffic which will in turn reduce their ability to make long-term financial commitments to upgrade equipment and service.

Source: Energy Transportation Systems, Inc.

MAP 3

Direct Competition Between Planned Coal Slurry Pipelines and
Existing Rail Network

Additional impact can be expected to reduce rail jobs, jeopardize the financial condition of railroads and result in major losses to the communities, farms and businesses served by those railroads.

Nor should environmental questions be ignored. The fact that there is existing rail track to transport coal from the mine vicinity to the utilities makes further destruction of property for the purpose of constructing an almost parallel network of pipeline both unnecessary and unwise.

In the case of the other two proposed pipelines shown on Map 4, the Utah to Nevada line appears to be in direct competition with existing rail systems after a modest extension of track, and-because of its short length (175 miles)-it is doubtful that it can compete with rail transportation.