Bloomberg News

RailAmerica Shelves Plans to Export Coal From Washington

August 15, 2012

RailAmerica Inc. (RA:US), the short-line railroad being bought by Genesee & Wyoming Inc. (GWR:US) for $1.39 billion, has shelved plans to export coal from a port in the Pacific Northwest.

The company decided not to pursue a project to export as much as 5 million metric tons of coal a year from Grays Harbor, Washington, to Asia, Paul Queary, a company spokesman, said today in a telephone interview.

RailAmerica’s decision comes as environmentalist groups such as the Sierra Club hold rallies, town hall meetings and petition government agencies to reject plans for projects, including those backed by coal producers Peabody Energy Corp. (BTU:US) and Arch Coal Inc. (ACI:US), which might export as much as 146 million tons of coal annually from ports in the Pacific Northwest.

“It’s an indicator that these companies are questioning the wisdom of exporting coal through the Pacific Northwest,” said Cesia Kearns, senior campaign representative for the Sierra Club’s Coal Exports Campaign. “It’s going to continue to be an uphill battle.”

RailAmerica’s decision to forgo the project is “purely a business decision,” Queary said. Opportunities to ship other products may materialize faster than the coal plan, he said.

Decisions to move forward with coal terminals in the region are made on a case-by-case basis depending on how much companies want to spend and how long they’re willing to wait for the project to begin operations, said Mike Dudas, an analyst at Sterne Agee & Leach Inc. in New York. RailAmerica’s move to abandon its plan doesn’t mean that coal producers will ditch theirs, he said.

“It’s an ebb and flow,” Dudas said. “I don’t think it’s doomsday.”

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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Companies Mentioned

  • GWR
    (Genesee & Wyoming Inc)
    • $93.5 USD
    • 0.82
    • 0.88%
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