Railroads Drop Coal, Focus on Fracking
From Energy and Capital
By Swagato Chakravorty
Railroads and coal have had a long—and mostly mutually beneficial—relationship in the U.S. But what happens when coal production begins to falter, and national attention turns toward the ongoing natural gas boom?
Well, if you’re Union Pacific Corp. (NYSE: UNP), you might exploit the shale-oil industry to offset more than 12 percent in decreased coal volumes and an associated 5 percent decline in coal shipment revenues.
Currently, Union Pacific is making a killing on shipments of drilling equipment, sands, chemicals, and other elements needed for fracking operations. The company is shipping all of this to North Dakota, Ohio, Pennsylvania, and parts of Texas – homes of the Bakken, Utica, Marcellus, and Eagle Ford shales.
And on the way back, the same trains are returning crude to refineries of California, Texas, and Louisiana.
