With so much emphasis on shipping Powder River Basin coal to China through the Pacific Northwest, other markets and shipping routes might be easy to miss.
But coal, including some from the basin, is shipped to China through the Gulf of Mexico, courtesy of energy friendly states in the South such as Texas and Louisiana.
There has even been talk of shipping coal through Mexico.
According to Platts U.S. Coal, a division of the McGraw-Hill Companies Inc., there are two coal ports along the Gulf of Mexico: U.S. United Bulk Terminal LLC in Davant, La., and McDuffie Coal Terminal in Mobile, Ala.
Four ports in the Gulf are operating but expanding to ship more coal: Kinder Morgan Bulk Terminal in Houston; Convent Marine Terminal in Convent, La.; Burnside Bulk Marine in Darrow, La., and International Marine Terminals in Sorrento, La.
Four ports are planned: Port of Corpus Christi in Corpus Christi, Texas; Armstrong Coal Terminal in Myrtle Grove, La.; Mobile River Terminal in Mobile, Ala., and Tampaplex in Tampa, Fla.
“Our sources have told us that the mining companies in the Powder River Basin, what they are doing when they get a contract, they will ship the coal down from the Powder River Basin to one of the terminals in the Gulf,” said Regina Johnson, managing editor for Platts U.S. Coal, a publication read by investors and executives. “And then from there it will leave the Gulf and head off to wherever is going in Europe and Asia.”
In 2012, 16.7 million tons of thermal coal — the kind of coal that is used to generate electricity and is found in the Powder River Basin — was exported through Gulf Coast ports, according to the U.S. Energy Information Administration.
That total didn’t account for river ports in places such as Ohio.
The numbers do not mean all the coal came from the Powder River Basin.
“I believe the last big contract I heard about somebody signing, I think it was Peabody in July 2012,” Johnson said.
Indeed, Houston-based Kinder Morgan Energy Partners L.P. will export 5 to 7 million tons of coal a year from Peabody Energy Corp. mines in the Powder River Basin, Colorado and Illinois Basin, starting first with Powder River Basin and Colorado coal in 2014. The deal goes through 2020, according to a statement from Kinder Morgan, which is spending $400 million to expand its Gulf ports to handle a total of 27 million short tons a year.
In January 2012, Kinder Morgan signed a deal with Arch Coal Inc. Specific tons were not announced. The coal will be both thermal and metallurgical coal – which is used in making steel – from Arch mines in Appalachia, the Powder River Basin, the Western Bituminous Region and the Illinois Basin.
Kansas City Southern Railway Co. has rail lines in Mexico that stretch to a few port cities, including a port in Lazaro Cardenas in the central state of Michoacan.
“It’s about 360 miles southwest of Mexico City,” Johnson said.
A new coal terminal is being developed at Lazaro Cardenas called Terminales Portuarias del Pacifico, which will open with a 3 million ton yearly capacity. Six tons will be transported after the second phase is completed.
“They would like to ship whatever coal they get from the U.S.,” Johnson said. “Nobody has told us of deals going through.”
Doniele Carlson, a Kansas City Southern spokeswoman, confirmed no Powder River Basin coal is being exported south of the border at this time.
Within the United States, Kansas City Southern transports 25 to 40 million tons of Powder River Basin coal per year.
“We do transport PRB coal to nine coal utilities on our line,” Carlson wrote in an email. “We interchange with Union Pacific and BNSF Railway over Kansas City, Mo., for most of that business.”