The Delta Queen is moving again

It's not under its own power, but it's still a beautiful sight.

AEP planning to shed some towboat operations? (Updated 2x)

Here's the gist of a news release that came out this morning:

   COLUMBUS, Ohio, March 23, 2015 – American Electric Power (NYSE: AEP) today announced that it is has engaged Morgan Stanley & Co. LLC to explore strategic alternatives for its competitive barge transportation subsidiary, AEP River Operations LLC. AEP River Operations is one of the largest U.S. inland marine transportation companies providing transportation services for bulk commodities, coal and liquids.
   AEP is committed to completing its review of potential alternatives for River Operations as promptly as practicable. There are no assurances that any particular alternative will be pursued or that any transaction will occur, or on what terms. The company does not plan to release additional information about the status of the review of alternatives until a definitive agreement is entered into or the process is otherwise completed.

By "competitive," I assume AEP is talking about the part of the business that does not supply coal to its power plants.

That's all I know right now. If I hear more, I'll pass it along.

UPDATE: If you want to see a little of the history of AEP River Operations, check out this link.

I'm so old, I can remember when the Oliver C. Shearer and the Lelia C. Shearer both bore the oval AEP logo on their stacks. I understand the Lelia has been scrapped after several years of service with Campbell Transportation, but the Oliver C. Shearer is still on the river.

I saw the Capt. Bill Stewart the other day and got a decent picture, even if the hill behind it was that deadly dull winter brown.

It would be hard to imagine the ten new AEP boats in other colors, but then I once thought the Ohio
 River Company would always be around.

UPDATE 2: A little while ago I talked with Tammy Ridout, manager of media relations for AEP. She said AEP plans to keep the part of its river transportation business that delivers coal to power plants that supply states where electric utilities are regulated, such as West Virginia. The review of options includes divesting equipment that supplies deregulated states such as Ohio, she said.

I have more in a story on The State Journal web site here.

If I recall correctly, AEP is considering selling its Ohio generating assets now that they effectively operate as merchant plants that sell power on the open market. If I’m wrong about that, someone please let me know.

River pollution and mercury

You may have read or heard that the Ohio River is once again considered the most polluted river in the country. Here is an article on The Courier-Journal website talking about it.

What I found interesting was the part about how power plants are removing mercury from their air emissions, but the element may be finding its way into the river because the effluent from scrubbers has to go somewhere.

There is another thing in here that interested me. It had to do with mixing zones for discharges that dump mercury into the river.Although this particular article does not identify the West Virginia plant with the mixing zone variance, it probably is the Axiall (formerly PPG) plant in Wetzel County, near New Martinsville. In fact, here is an older Courier-Journal article that identifies that particular plant.

And here is one I did in 2012 while I worked for The State Journal in Charleston about it.

M/V Enid Dibert

I had my newest boat chaser with me today. I asked her if she wanted to look for boats, and as usual she said yes. So we drove along Route 7 in Ohio and saw some loaded coal barges coming around a bend. It turned out to be a tow being pushed by the Enid Dibert of Crounse Corp.

I tried to center it on the bridge pier and tower, but I was off a little bit. This is cropped tight from a photo zoomed in as much as I could get it.

And here's the Dibert letting the current push the stern around so it can head down the Ohio.

Finally, here's my new boat chaser taking a minute to throw rocks and sticks. She can't help herself.

There are at least four men in her life who are crazy about her, so she has picked up some male habits. Good ones, like throwing sticks. And gross ones, like showing off the food she's chewing. But we'll keep her anyway.

Ice at Hannibal

Facebook friends have been sharing videos of problems with ice blocking the upper approach to the Hannibal Locks and Dam. Because I try to respect intellectual property rights, I haven't downloaded any of them to post here, but from the videos it looks like acres and acres of ice and boats trying to clear a channel.

Coal trends on the Ohio River

Wow.

That was the first word out of my mouth when I compared coal shipments through Ohio River locks in 2014 with 2013 and the recent peak in 2015. I expected locks in the mid Ohio Valley to see declines and those in the Louisville District to see increases, but not to this extent.

First, the numbers. I added the monthly totals on the Corps Reports website and compared them with final numbers for 2013 issued last month by the Corps of Engineers. I chose 2005 as a comparison year also because it seemed to be the recent high point for coal shipments here in the Huntington District.

All amounts are in thousands of tons.

Locks	2014	2013	2005
Emsworth	14,605.6	15,390.6	16,828.2
Dashields	14,957.5	15,455.8	16,846.7
Montgomery	14,889.6	15,337.8	17,430.4
New Cumb.	20,571.1	22,141.5	25,487.8
Pike Island	20,335.8	22,103.3	29,112.9
Hannibal	29,731.8	27,439.0	40,686.3
Willow Island	26,366.5	24,936.4	36,996.8
Belleville	27,784.7	26,013.7	38,045.4
Racine	28,946.6	26,516.7	38,200.8
RC Byrd	17,919.5	23,470.9	42,051.5
Greenup	16,377.3	20,545.9	42,725.0
Meldahl	20,775.5	25,526.9	34,298.3
Markland	22,723.0	27,773.4	22,163.1
McAlpine	35,781.1	39,270.9	20,610.6
Cannelton	36,388.0	39,597.7	23,100.9
Newburgh	40,716.0	44,638.3	28,166.3
JT Myers	23,033.2	27,753.9	31,493.8
Smithland	24,895.8	30,381.8	35,528.7
L&D 52	21,414.6	27,740.1	30,110.4
L&D 53	11,607.3	19,326.9	19,516.0

Now, some background.

It's no secret that Appalachian coal production is down. There are geological reasons and environmental reasons. Here are some I listed in an article that was printed early last year in The State Journal:

The southern coal counties of West Virginia, along with eastern Kentucky and parts of Virginia and Tennessee, lie in what is known as the Central Appalachian region. Recent and long-term market conditions are working against an improvement in their fortunes.

The reasons for the pessimistic outlook for thermal coal include:

• The low-hanging fruit has been picked. Seams are getting thinner and more expensive to mine.
• The Clean Air Act amendments of 1990 helped Central Appalachia by forcing utilities to buy the region's low-sulfur coal to meet emissions standards. The amendments damaged the Illinois Basin coalfields, which produce high-sulfur coal, and also helped Powder River Basin coal. But with more power plants installing scrubbers, utilities can now switch to dirtier, cheaper coal from Illinois.
• Meanwhile, the regulatory environment led utilities to accelerate their plans to retire older, smaller, coal-burning plants that are not large enough to justify the expense of scrubbers. Rather than being retired around the year 2020, many of these plants have been retired already or will be in about 15 months.
• Because of conservation efforts and market conditions, the demand for electricity is less than it was a few years ago.
• Meanwhile, the shale gas revolution has caused utilities to choose gas for new generating capacity. When gas prices are low, as they were in 2012, utilities turn to gas over coal when they can. That has changed some, and coal is regaining some market share.
• And renewable resources such as wind are providing more power to the grid.

Compare Greenup with Cannelton, 2013 vs. 2005. It's almost as though the numbers have been reversed.

This explains a lot of why I see fewer boats on the Ohio here in the Huntington area than I did a few years ago.

There is other research I need to do as other numbers from 2014 become available. But these numbers are further evidence that Central Appalachian coal is losing market share to the Illinois Basin, the Powder River Basin and other sources.

© Jim Ross. All Rights Reserved.