The industry touts its environmental benefits, but it’s still reliant on diminishing coal revenues.
Earlier this month, the Association of American Railroads (AAR) released a paper outlining policy proposals aimed at combating climate change. This was nothing new for AAR and its member railroads: they have long claimed to be leaders in fuel-efficient transportation and in driving down greenhouse gas emissions. AAR’s website states that “preserving the natural environment is a responsibility railroads take seriously.”
Rail may not be suitable for every load, but it’s beyond debate that freight rail transportation right now is more fuel efficient for long-distance moves than trucks—by three to four times, according to AAR claims. Rail accounts for 40% of U.S. long-distance freight volume but only 2.1% of transportation-related emissions, according to Environmental Protection Agency data.
King Coal Abdicates
But are the railroads really committed to tackling climate change, or is AAR’s paper merely window dressing?
A report published in The Atlantic in December 2019, found that four Class I railroads—BNSF, Norfolk Southern, Union Pacific, and CSX—have been major players in the climate-denial movement, having joined the American Coalition for Clean Coal Electricity, which in 2014 called climate change a “hypothesis” and claimed that carbon dioxide was more beneficial to humans than harmful. (BNSF and UP are no longer members of that group.) The AAR doesn’t get off the hook either, having been found by the Atlantic to have participated in eight “toxically regressive” and “really harmful” climate-denial groups.
While there is absolutely no excuse for abetting the dissemination of nonfactual information, the railroads’ support of the coal industry is understandable from a strictly business standpoint. Transporting coal, especially for the power generation industry, was, and still is, a major source of Class I railroad revenues, although it is on the decline.
In 2018, 70% of U.S. coal was shipped by rail, contributing $10.7 billion, or 14%, of rail carrier revenue. AAR’s website claims, to this day, that “coal remains an important commodity for railroads and for the broader economy.” On the basis of facts like these, the Atlantic report indicted the rail companies for having a “gargantuan,” “indirect carbon footprint.”
On the other hand, coal use in the United States has halved since 2005, and no new coal-fired power plants are under construction anywhere in the country today. According to the rating agency Moody’s, railroad revenue from transporting coal will drop $5 billion by 2030. This decline, thanks to the switch by the power industry to natural gas and renewables, have led the rail carriers to emphasize different, and, hopefully, cleaner, sources of business, like intermodal. (See sidebar on next column)
In defense of its reliance on coal, CSX has said that, as “common carriers,” railroads are required by law to move “all forms of energy.” BNSF has rejected the charge that it supported climate denial, saying, in a statement, that it “has never denied the science or existence of climate change.” Union Pacific said it…
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