Sep 5, 2019

The decline of American coal is taking a toll on the railroad industry

Amy Harder, author of Generate
Expand chart
Reproduced from Moody's; Chart: Axios Visuals

No matter what President Trump says, coal in America isn’t coming back — and it’s bringing other industries down with it.

Driving the news: Coal demand for electricity is likely to drop by more than 50% in 11 years, according to a report by the rating agency Moody's. In turn, revenue from transporting that coal around the country via trains is expected to drop $5 billion by 2030, or 5.5% of the railroad industry’s 2018 revenue.

The big picture: Coal’s dramatic decline is fueled by several factors: cheaper natural gas and renewable electricity, tougher environmental regulations in the Obama administration and the global shift to cleaner sources of energy in the face of climate change.

One level deeper: Because of the industry's outsized dependence on coal, the fossil fuel’s decline is hitting railroads especially hard. Coal makes up 13% of total freight volume, which is the largest single freight commodity moved by rail.

  • 4 railway companies, led by CSX and Burlington Northern Sante Fe (BNSF), get more than 10% of their revenue from coal and are thus most at risk for revenue hits.
  • CSX gets nearly 20% of its revenue from coal, while BNSF gets nearly 17%.
  • Moody’s says credit effects for U.S. railroad companies "are likely manageable if the [coal] decline remains gradual."

Go deeper: Moody's developing new rating system to assess companies' "carbon risks"

Go deeper

39 mins ago - Technology

Civil rights leaders blast Facebook after meeting with Zuckerberg

Screenshot of an image some Facebook employees used as part of their virtual walkout on Monday.

A trio of civil rights leaders issued a blistering statement Monday following a meeting with Facebook CEO Mark Zuckerberg and other top executives to discuss the social network's decision to leave up comments from President Trump they say amount to calls for violence and voter suppression.

Why it matters: While Twitter has flagged two of the president's Tweets, one for being potentially misleading about mail-in ballot procedures and another for glorifying violence, Facebook has left those and other posts up, with CEO Mark Zuckerberg saying he doesn't want to be the "arbiter of truth."

Updated 58 mins ago - Politics & Policy

Updates: George Floyd protests nationwide

Police officers wearing riot gear push back demonstrators outside of the White House on Monday. Photo: Jose Luis Magana/AFP via Getty Images

Protests over the death of George Floyd and other police-related killings of black people continued for a seventh day across the U.S., with President Trump threatening on Monday to deploy the military if the unrest continues.

The latest: Baltimore Police Department tweeted late Monday, "BPD has activated the Maryland State Police to assist with moderate crowds in the downtown area. Officers have observed members in the crowd setting off illegal fireworks and throwing objects near peaceful protestors and officers."

2 hours ago - Technology

Cisco, Sony postpone events amid continued protests

Screenshot: Axios (via YouTube)

Cisco said Monday night that it is postponing the online version of Cisco Live, its major customer event, amid the ongoing protests that have followed the killing of George Floyd.

Why it matters: Cisco joins Sony, Electronic Arts and Google in delaying tech events planned for this week.