CSX, a freight railroad company with origins in the bituminous coal seams of Appalachia, will not buy a single new locomotive to pull coal trains, chief executive Hunter Harrison told analysts on Wednesday.
“Fossil fuels are dead,” Mr Harrison said. “That’s a long-term view. It’s not going to happen overnight. It’s not going to be in two or three years. But it’s going away, in my view.”
His comments come as the White House aims to revive the American coal industry by rescinding environmental regulations and abandoning the Paris climate agreement. Mr Trump surrounded himself with coal miners earlier this year when he signed an executive order he said was “putting an end to the war on coal”.
Yet US power generators are building more plants fuelled by cheap natural gas, displacing old coal-fired units. Falling costs for solar and wind energy have also eaten into coal’s market share.
North American railroads have reshaped their asset holdings in acknowledgment that coal’s apex has passed.
Lance Fritz, chief executive of the Union Pacific railroad, said in a recent interview that Mr Trump’s move to scrap Clean Power Plan regulations was unlikely to grow its coal business. “It takes away a headwind," he said.
Nearly a fifth, or $530m, of CSX’s $2.9bn of second-quarter revenue came from coal, a 27 per cent rise from the same period a year before. In the second quarter of 2011, CSX coal revenue totaled nearly $1bn.
CSX’s rise in coal volumes derived from 8.2m tonnes of exports. Deliveries of coal to US utilities declined year on year to 11m tonnes. Despite long-term trends, Mr Harrison reiterated his support for the business. “The last carload of coal that’s shipped out of this country, I want to be the carrier that ships it,” he said.
Read more at Coal Has No Future, Says US Railroad Boss (Financial Times[$])
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