Collateral Impact Of The EPA's Proposed Carbon Rule: Barge Companies Are Already Adapting
Historically, the nation's barges have transported much of the nation's coal. In fact, barges are second only behind rail for moving the nation's primary energy source to the power plants that use it. But in June, the EPA put out a new rule to cut carbon emissions by thirty percent by 2030. The rule's impact on power plants is direct. But what about the impact on the barge industry?
The coal terminal in north St. Louis provides part of the answer. There, coal from the Powder River Basin in Wyoming comes in by train. Each day, tens of thousands of tons of coal arrive and are put on barges to be sent down the Mississippi River.
David Evans, the terminal manager, was here in the late 1990s -- a time he calls the "good years," when power plants down south burned a lot of coal. He remembers how the coal terminal was abuzz with activity.
"[They were] running all the time. The yard had coal in it. The conveyors are always running. The coal is always going. And it's like you have a barge under the spout every minute and a train knocking at the door," Evans said.
But for the last few years, Evans said, the terminal has been running at about 60 percent capacity. For a while, the terminal has had just one customer, the utility company NRG.
Mark Knoy is president and CEO of American Commercial Lines, a company that has been moving coal on barges since 1915. Knoy said the EPA's recent rule to change emission standards for coal fired power plants is adding to the burden of emission rules already in place. He explained that the regulations have made moving coal along the river more difficult.
"That really started a good number of years ago," Knoy said. "We've been working around EPA emission mandates for the last couple of decades. They've started to become a little bit more onerous in the last decade."
Even though ACL has been moving coal for nealry 100 years, Knoy said ACL isn't tied to coal. The business follows the profits. "If we can make more money hauling widgets than hauling coal, we'll move to hauling widgets tomorrow," he said.
Recently, that widget has been crude oil. Knoy said diversifying the business to move crude oil in addition to coal wasn't just a matter of swapping the product that a barge carries. ACL needed to build dozens of new barges to hold liquid.
Captain Robert Deluca has been riding on the towboats that push the barges since the late 1990s. He said that oil barges pose different challenges than coal.
Deluca explained that there are more risks when hauling crude compared to coal. For starters, oil could leak into the river. To prevent that, the company uses special double-hull tank barges. Aside from spills, there's also hydrogen sulfide vapors that build up in the covered barges. When pressure from the gas reaches a certain point, it automatically starts venting out of a special valve. The gas is toxic and flammable, so the crew has to be especially careful.
According to Deluca, "You can see little vapor clouds. It's clear, but you can see something come out of the vent. You can hear something too, just a hissing sound like something relieving pressure. It's like a tire of your car when air comes out."
ACL's history of adapting what it ships to accommodate the change in emmission standards should be helpful for the company moving forward. The latest EPA requirements are forcing some of ACL's biggest coal consuming clients to switch their operations away from coal to natural gas. ACL has already invested in three new pressurized tank barges and started moving liquefied natural gas.
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