I just spent a few very relaxing days on the Illinois bank of the Ohio River, about halfway between Golconda and Rosiclaire for those of you keeping score. I noticed barge ‘trains’ moving coal upstream and then not 30 minutes later a nearly identical set of barges moving coal downstream. Why is that? You would think that businesses that need coal upriver would get their coal from that area. Conversely, entities that need coal downstream would also get their coal locally. It’s got to cost serious bucks to move all that coal. Is there some warp in the law of supply and demand in regards to coal? Any Dopers have a theory?
This seems to be common. Fuel tank trucks, loads of baled hay, chicken trucks etc. going both ways. My boss came back shaking his head from a pre-Christmas trip to visit his son in Berkeley. On highway 99 through the San Joaquin Valley there were dozens of trucks of Christmas trees going both north and south.
The coal going in one direction was being sent to an intermediate port where the barge was broken up and smaller barges sent to their final destinations (one of which happened to be downstream)
There were different types of coal in the barges. Southern Illinois has a lot of coal that happens to have a high sulfur content – not very desirable in the Northeast, but possibly useful in some other area. So you might have seen low-sulfur coal going upstream and high-sulfur coal going downstream.
We have two sellers of coal and two buyers. Each buyer contracts with the seller that gives him the most favorable terms. Shipping is only one component of the cost; perhaps one buyer gets a volume discount that he couldn’t get from the other seller. Another possibility is that the grade of coal from the two sources isn’t identical.
I’m sure some of it just has to do with company partnerships and agreements and such, like company X can buy coal from company Y a lot cheaper than it can from company Z even though Z is closer, and even with the extra shipping costs it works out cheaper.
Another thing that goes on is the fact that there are different types of coal. The coal from that area is very high in sulphur, which means if you burn it you have to do a lot to it to keep the emissions under the allowable amount. Coal from farther away is lower in sulpher, and burns cleaner. It’s also more expensive, so what many companies do is use a mixture of cheaper local high sulphur coal and more expensive distant low sulphur coal so that they can meet their emissions regulations in the most cost effective manner. What you may be seeing is a load of high sulphur coal being shipped out of the area and a load of low sulphur coal being shipped into the area.
There’s also at least one coke plant on the ohio river that I know of (we used to call it the fart plant because that’s what it smelled like). Would you know the difference between coal and coke if you saw it? You might have seen a load of coke being shipped somewhere as well.
The power plant where I used to work had three grades of coal, based on sulphur content. The cheapest was the local high sulphur stuff. They also employed three different methods (trucks, trains, and barges) of getting the coal to the plant. The idea was that if any one industry or even two of them went on strike that they would still be able to get the coal they needed to run the plant. There are probably many companies up and down the ohio river that have multiple sources for their coal for that reason. It may be more expensive to have barges go both up and down the river, but if one of their suppliers goes out for whatever reason they won’t get shut down, which would be really expensive.