Coal Age

FEB 2013

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transport tips Shipping Coal on the Great Lakes & Seaway BY DAVE GAMBREL From the lake carriers��� perspective there are three major commodities that drive Great Lakes shipping: coal, iron ore and limestone. Coal and iron ore can use the same vessels, but limestone cannot. Grain and cement shippers would argue the importance of their products in the overall fabric of lake carrier commerce, but iron ore and coal lead in terms of tonnage. Coal shipments on the Great lakes totaled 3,049,705 tons in September, an increase of 6.3% compared to August, but a drop of 10.1% compared to a year ago. Total shipments for the year ended September 30 were 17,507,448 tons, only 74% of the five-year running average. Major reductions in tonnage from 2007 levels were sustained by Lake Superior ports (down 5.4 million tons) and Lake Erie ports (down 5 million tons). There are several explanations. A storm on Lake Superior shut down Midwest Energy Terminal from June 19 to July 19. As a result of shallower waters due to inadequate dredging and rainfall, ships cannot be loaded as heavily. Also, and perhaps most significantly, Ontario utilities are moving toward banning coal use for electric power generation. Some coal-burning power plants, such as Ontario Hydro���s Nanticoke plant, are being phased out, so the amount of steam coal shipped to lakefront power plants will decrease noticeably. Metallurgical coal shipments will become more important, as will iron ore shipments. Nanticoke, a 4,000 mw coal-fired power station, burns upward of 12 million tons per year. When its coal units finally go off-line December 31, 2014, Nanticoke will switch to using biomass. Biomass available for energy on a sustainable basis includes herbaceous and woody energy crops, agricultural food and feed crops, agricultural crop wastes and residues, wood wastes and residues, aquatic plants, and other waste materials including some municipal wastes. Picture a very smelly situation shaping up in Nanticoke. One can only imagine the forestry and transportation confusion that will be the result of the Nanticoke decision, but one fact is certain: 12 million tons of steam coal will no longer be shipped from coal mines in western Canada, western U.S., and eastern U.S. to Nanticoke, Ontario. For the time 22 www.coalage.com being Canada remains the single largest market for all U.S. steam coal exports. In 2010, exports to Canada, which accounted for one-third of all U.S. steam coal exports, decreased by 2.6% to an estimated 8 million short tons. Nanticoke will take another big bite out of this export tonnage. Great Lakes vessels deliver approximately 70 million net tons of iron ore pellets annually. The majority of this volume loads at ���Head of Lakes��� ports at the western end of Lake Superior. The balance loads either from the Port of Marquette or the Port of Escanaba, each of which are located in Michigan���s Upper Peninsula. Downbound iron ore pellets are destined for major integrated steel producers whose production sites are located adjacent to or are accessed from receiving facilities in lower Lake Michigan or Lake Erie. Even if metallurgical coal tonnage does not increase, its percentage of total coal shipped on The Lakes will increase noticeably. The steel industry will become a more important part of lakes business, and the movement of iron ore is a big part of that equation. Iron ore shipments for September totaled 5.9 million tons, a decrease of 7.3% compared to August, and 7% below the level of a year ago. Total shipments for the year ended September 30 were 44,596,757 tons, 16% above the five-year running average. However, if the exceptionally poor year of 2009 is not taken into account, the annual tonnage was about average. Vessel Restrictions on the Great Lakes/ Seaway System The size of vessels that can traverse the Seaway is limited by the size of locks. Locks on the St. Lawrence and on the Welland Canal are 766 ft long, 80 ft wide, and 30 ft deep. The maximum allowed vessel size is slightly smaller: 740 ft long, 78 ft wide, and 26.5 ft deep; many vessels designed for use on the Great Lakes following the opening of the Seaway were built to the maximum size permissible by the locks. Vessels of the 1,000-ft lake freighter fleet (e.g., Figure 3) are built on the Lakes, and cannot travel downstream beyond the Welland Canal. On the remaining Great Lakes these ships are constrained only by the largest lock on the Great Lakes waterway, the Poe Lock at the Soo Locks, which is 1,200 ft long, 110 ft wide and 32 ft deep. If we count the 974 ft Figure 1: Traffic Patterns on the Great Lakes. Primary coal ports are located in Superior, Wisconsin; Chicago, Illinois; and Toledo, Ashtabula and Sandusky, Ohio. February 2013

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