US to reconsider applying antitrust law to railroad
(Reuters circulated the following on January 7.)
WASHINGTON, D.C. Congress is expected to reconsider legislation that would strip big railroad companies of their antitrust exemption, spurred on by power companies who accuse them of price gouging.
Sen. Herb Kohl and Rep. Tammy Baldwin, both Wisconsin Democrats, introduced bills on Wednesday that would place rail freight shippers under the same antitrust laws that apply to other industries.
The industry was deregulated in 1980 because it was fast losing market share to truckers. But there have been widespread complaints about railroads' pricing power, particularly from power companies which depend on railroads to ship coal.
'Freight railroads have the luxury of being protected from the competition other industries face,' said Kohl, chairman of the Senate's subcommittee on antitrust, in a statement.
'We have seen the result of this outdated policy in Wisconsin, where our utilities were forced to absorb staggering cost increases for shipping coal,' he added.
Similar bills failed in the House and Senate last year but are expected to have a better chance of passing this year because Democrats hold more seats in each chamber.
The biggest rail companies include CSX, Union Pacific, Burlington Northern Santa Fe Corp, and Norfolk Southern Corp.
Railroad stocks down in face of antitrust legislation
(The Associated Press circulated the following on January 7.)
NEW YORK Railroad stocks fell Wednesday, as the broader market declined and two members of Congress revived legislation to repeal antitrust exemptions for the railroads.
Union Pacific Corp., the nation's largest freight railroad operator, led the decline, down $4.31, or 8 percent, to $49.70 in afternoon trading.
Sen. Herb Kohl and Rep. Tammy Baldwin, both Wisconsin Democrats, filed legislation to repeal antitrust exemptions for the railroads, which they said led to higher rates for shipping coal and other goods.
"This legislation is long overdue and absolutely necessary to begin to end the railroad monopolies that are driving consumer prices up and service down," Baldwin said.
The lawmakers said current law prevents antitrust review of railroad combinations, which are reviewed only by the Surface Transportation Board, and doesn't stop railroads from collective ratemaking. Their legislation would let federal and state officials and private parties sue to block mergers and acquisitions and put review of such combinations under the Justice Department.
Similar legislation died last year after passage by the House and Senate judiciary committees.
Shares of Burlington Northern Santa Fe Corp. were down $3.56, or 4.4 percent, to $77.71; CSX Corp. was off $1.76, or 4.8 percent, to $34.93; and Norfolk Southern Corp. was down $2.15, or 4.3 percent, at $47.75.
UP again surpasses records for moving loaded coal trains out of Wyoming
(Union Pacific issued the following on January 7.)
OMAHA, Neb. Union Pacific today announced it has once again surpassed several all-time records for delivering coal out of Wyoming's Southern Powder River Basin (SPRB).
During 2008, Union Pacific set an all-time record by loading 13,212 trains out of the SPRB, 332 more trains than 2006, the previous yearly record. Union Pacific also loaded 204.6 million tons of coal out of the SPRB during 2008, eclipsing another all-time mark set in 2007 by 5 percent.
"Our investments in the Joint Line and throughout our coal network continue to pay dividends in terms of our coal train velocity and throughput" said Doug Glass, Union Pacific vice president and general manager - energy.
During December, Union Pacific moved 1,118 trains out of the SPRB for an average of 36.06 trains per day. Union Pacific's average train-per-day record was set during November 2007 at 38.63 trains per day.
The Union Pacific/BNSF Joint Line numbers during December included a loading average of 68.35 trains a day, and 24,829 loaded trains for the full year for a 4.4 percent increase over 2007.
SPRB Economic Advantage
On a cost per million BTU basis, coal from the Southern Powder River Basin (SPRB) continues to be one of the lowest cost energy alternatives in North America. Among the domestic coal regions, SPRB coal is about one-third as expensive as eastern options and is tied with Rocky Mountain coal for the lowest sulphur content. While domestic natural gas prices have dropped from historically high levels in 2004-05, SPRB coal remains a fraction of the cost of natural gas.
Coal and Coal-fired Electric Generation Plants
The United States has more coal than any other fuel, which translates to 25 percent of the world's supply of coal. Half of the United State's electricity comes from coal-fired electric generation plants and coal used to generate electricity is significantly cheaper than the cost of using most other fuels.
About Union Pacific
Union Pacific Corporation owns one of America's leading transportation companies. Its principal operating company, Union Pacific Railroad, links 23 states in the western two-thirds of the country and serves the fastest-growing U.S. population centers. Union Pacific's diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad offers competitive long-haul routes from all major West Coast and Gulf Coast ports to eastern gateways. Union Pacific connects with Canada's rail systems and is the only railroad serving all six major gateways to Mexico, making it North America's premier rail franchise.
