NEW YORK — The United States is poised to export the most coal since 1992 this year, filling a gap created when flooding interrupted Australian supplies and buoying shipments for railroads such as Union Pacific and Jacksonville-based CSX.
Union Pacific of Omaha, Neb., the nation's largest railroad, may double coal exports this year to more than 4 million tons, said Doug Glass, the company's vice president and general manager for energy. CSX predicts shipments may rise 33 percent to a record in 2011 after first-quarter volumes climbed 45 percent.
"It's pretty exciting," Glass said. After the recession reduced demand for coal, which accounts for 21 percent of Union Pacific's sales, "we're starting to see renewed interest in that coal and we're encouraged because we've got the capacity to meet the demand."
The company has invested more than $90 million in expanding its Colorado and Utah coal business. Its peers are making track improvements and adding equipment to take advantage of demand growth. Norfolk Southern Corp., the fourth-biggest U.S. railroad, has said it will buy 1,500 coal cars this year.
Nationwide, coal exports may gain 20 percent in 2011 after quarterly volumes rose to the highest in about 19 years in the three months through March, according to government figures.
Coal shipments from the U.S. are poised to rise to about 98 million tons in 2011, the Energy Information Administration said. The exports increased 49 percent to 26.6 million tons in the first quarter alone.
Steelmakers in Asia and South America are driving demand for metallurgical coal, a crucial production ingredient, while shipments of thermal coal for power plants have been boosted by reduced supplies from Australia's Queensland state and the idling of some atomic plants after Japan's nuclear crisis.
"It's 'you got to have it now' type of freight," said Jason Seidl, a New York-based analyst with Dahlman Rose & Co. "When the window is open for export coal, that's when you have to sell it, when you have to ship it."
China, the biggest metallurgical coal consumer, will import about 49 million tons this year, up from 10 million in 2008, said Patricia Mohr, vice president, economics and commodity market specialist with Scotia Capital in Toronto. China is consolidating its steel and coal industries by closing inefficient plants and mines, which is increasing demand for imported coal, she said.
Metallurgical coal is found in bituminous deposits, mostly in the eastern United States, along with thermal coal used for power generation. While metallurgical coal is the primary variety exported by U.S. companies, demand for thermal coal more than doubled in the first quarter, according to the Energy Information Administration.
The western United States has large deposits of softer, sub-bituminous coal, which require higher volumes to produce the same amount of energy as harder bituminous coal. Union Pacific, which operates in the western United States, moves coal from that region to the upper Mississippi River for shipment to Europe, Glass said.