Monday, April 30, 2018

Marathon announces big acquisition

Marathon Petroleum, one of the largest movers of petroleum products on the Ohio River, this morning announced it had reached an agreement to acquire Andeavor. The merger, if completed, will combine Marathon's strength in the Midwest and Gulf Coast regions with those of Andeavor's in the California, Mid-Continent and Pacific Northwest  regions. The combined company would be the largest refining company in the United States and one of the five largest in the world.

The first question that ran through my mind was what the reaction must be in Findlay, Ohio, where Marathon has its corporate headquarters. I've never been to Findlay, and I know only a few people there, most of whom are former residents of my home region. The guess here is they're probably processing the news and figuring out what it means for them.

But if I lived there, I would wonder if this means a local hometown company will be looking for a new corporate home soon. Here's why.

Ashland, Ky., once was home to a Fortune 500 company known as Ashland Inc., and formerly known as Ashland Oil & Refining Co. It was one of the dominant corporate players in the Huntington-Ashland-Ironton Tri-State region,  and the only one with its main headquarters here. Some of the other big players  were Allied Chemical, Armco Steel, Inco Alloys International, BASF, Dayton Malleable and Owens-Illinois.

Ashland Inc.'s presence in the Tri-State was a blessing, as the company supported many nonprofits and educational institutions, and its executives provided intellectual capital to those same groups. The refinery at Catlettsburg was one of the region's largest employers. There is a story that one CEO had his home phone number listed in the phone book, and people would call him to complain if the windshield washer fluid at the pumps at the company's convenience stores was frozen.

There was always a fear, though, that Ashland Inc. didn't really want to be here. When I was a reporter at the Huntington paper and covering Ashland Inc. was part of my beat, one executive told me the company's location in a small town was a disadvantage in attracting executive talent, particularly minority talent. The lack of direct air service to major population and business centers also was a drawback. Ashland Inc. had  its own corporate jet or jets, but getting large numbers of people in and out was not always easy.

For years Ashland Inc. was lead by its founder. After him came another person and then came John R. Hall, a petroleum engineer by training. When Hall retired, it was apparent the product people were no longer in control of the company and the mantle had passed to the bean counters and marketers. Soon enough, investor groups started pushing for changes to maximize shareholder return regardless of the impact on communities where the company had begun and that had stood behind it.

In 1998, Ashland Inc. announced it was relocating its corporate headquarters to Covington, Ky. The company would leave behind some money for nonprofits, but after that, it would not consider helping the Tri-State to be one of its top priorities.

Ashland also announced it was forming a partnership with Marathon that would combine the two companies' refining and marketing assets. After a given number of years, Marathon would have the option of buying out Ashland's interest in Marathon Ashland Petroleum LLC, which it did.

Now Ashland Inc. is known as Ashland Global Holdings Inc., a company that develops and produces specialty chemicals. As one of its former p.r. people said to me a long time ago, if Paul Blazer came back to life today and looked for the company he started, he would need dental records to identify it.

I've lost track of what happened to the former Ashland Inc. and Ashland Petroleum headquarters buildings at Russell, Ky. And those other companies listed above? They're gone, too. Inco sold its nickel plant at Huntington to another company, and Armco sold its Ashland works, but the facilities operated by the other companies have been closed,  and most have been demolished.

If I lived in Findlay, I would expect to hear that Marathon remains committed to the area. But sooner or later a new generation of leadership will make decisions for the company, and it will weigh whether a city of 41,000 people in northwest Ohio offers what a world leader in petroleum refining and marketing  needs. Marathon has invested a lot of money in its corporate HQ campus there, but companies have walked away from such investments before.

Or this deal could bring even more investment to downtown Findlay and northwest Ohio. We won't know until it happens.

Sunday, April 29, 2018

M/V Mister Mac

The last I checked, the M/V Mister Mac and its unusual cargo of equipment for a refinery (cracker?) in the Pittsburgh area was approaching Cincinnati. I'll do my best to get a shot of it as it passes through my home area of Huntington, W.Va., in a day or two.

I mean, I have only about a hundred shooting spots between Portsmouth and Pomeroy, so I should get one or two good ones, I hope.

Saturday, April 28, 2018

M/V Capt. Gerald Boggs

Seen this morning downbound on the Ohio passing old Lock and Dam 27 in the background.

This boat was built 1977 by St. Louis Ship. AEP bought several new boats from St. Louis Ship and from Dravo when it expected to haul a lot of western coal on the Ohio via a rail-to-barge dock at Metropolis. Those plans didn't work out, and for a while the yard at Lakin had several new boats tied up idle at any one time.

The Boggs started life as the Edwin A. Lewis. Its name was changed in 2006

The boat is 138 feet long and 44 feet wide. Its two engines generate 5,600 horsepower.

Wednesday, April 25, 2018

Two boats on a gray day

The M/V AEP Mariner ...

... and the M/V Janis R. Brewer ...

... passed through my area today. Both were downbound, the Mariner pushing a dozen empties and the Brewer pushing 15 loads of coal. A full coal tow with the hills behind it turning green, even on an overcast day ... you have to at least try to get that picture.

FirstEnergy moves ahead to shut down Beaver Valley nuke plant

Earlier today FirstEnergy Corp. announced it has filed a certification letter to shut down its three nuclear power plants — two in Ohio and Unit 1 and Unit 2 of the Beaver Valley Power Station at Shippingport, Pa.

Beaver Valley is the only nuclear power plant along the Ohio River.

All three plants would cease operations by the end of 2021. Beaver Valley Unit 1 would be retired by May 31, 2021, and Unit 2 would cease operations by Oct. 31, 2021.

FirstEnergy had previously said it would close it three nuclear plants if it did not receive regulatory help or if it could not sell them. As neither option panned out, the company is moving ahead with closure.

The next step is for regional grid operator PJM Interconnection to certify that the grid would not lose reliability should the three plants close.

A look back at the polar vortex

Remember back when TV weather forecasters didn't have to make up names for every storm or cold spell? Back when weather was a little less dramatic? Before the days of the Siberian Express, the Alberta Clipper or Superstorm Sandy?

Back in January, we in the Ohio Valley had the polar vortex. Why this cold snap needed a name when others that were colder or lasted longer didn't I'll never know. Anyway, one thing about this cold snap was that coal-fired power plants were put into service to meet the increased demand for electricity that comes with extreme weather (another TV term; forgive me).

The Energy Information Administration has released preliminary numbers for electric power generation in January. Here are how power plants along the Ohio River responded to the increased demand.

Power generation and the polar vortex
Largest coal-fired power plantsNet generation, Jan. 2017 (megawatt hours)Net generation, Jan. 2018 (megawatt hours)Coal consumed, Jan. 2017 (tons)Coal consumed, Jan. 2018 (tons)
Mill Creek874,367862,041399,771396,931
Trimble County787,080821,258351,653356,791
FE W.H. Sammis549,821803,895250,474353,990
FE Pleasants879,870732,709355,141305,281
H.L. Spurlock687,325686,144393,250323,165
J.M. Stuart323,370646,514149,068291,677
Kyger Creek374,891606,532158,405257,259
Miami Fort547,448510,216225,196223,274
W.H. Zimmer693,285446,402275,379189,479
FE Bruce Mansfield744,737309,414309,414151,848
Coal total12,620,50612,782,5175,686,7245,862,670
Largest gas-fired power plantsNet generation, Jan. 2017 (megawatt hours)Net generation, Jan. 2018 (megawatt hours)Gas consumed, Jan. 2017 (Mcf)Gas consumed, Jan. 2018 (Mcf)
Hanging Rock584,087807,6634,724,1415,590,063
Trimble County65,623149,154752,9381,581,539
Nuclear power plantNet generation, Jan. 2017 (megawatt hours)Net generation, Jan. 2018 (megawatt hours)
Beaver Valley1,394,3001,381,756
Source: U.S. Energy Information Administration

Some coal-fired plants produced more power than they did in January 2017 while some produced less. You can look at the list and speculate about the reasons — an individual plant's efficiency; whether it had been running all-out before and there was little room for added output; operations affected by a planned retirement; etc. etc. etc. — but the numbers show the cold snap did not lead to an increase in the output of the plants as a group.

The two largest gas-fired plants, though, did pretty well.

Next up: A few more coal-related items.

Tuesday, April 24, 2018

M/V Captain James Anderson

Lately it's been harder for me to catch a coal tow in daylight passing Huntington, W.Va., but today we got it done in the rain,

I may be wrong, but I believe I counted eight loaded barges on the boat heading upbound. That's Chesapeake, Ohio, in the background.

Monday, April 23, 2018

Sort of off topic, but not really: Bank consolidation and mergers

(If you work in the river industry and have no interest in trends in banking, read this anyway. You might see some things your industry has in common with banking.).

TodayOn April 19, WesBanco Inc., a large regional bank based in Wheeling, W.Va., announced it had reached an agreement to acquire Farmers Bank Capital Corp. of Frankfort, Ky., in a stock and cash deal valued at about $378.2 million.

Once completed in the third quarter of this year, the acquisition will give WesBanco an additional 34 banking locations in 21 communities in Kentucky and in Cincinnati. WesBanco will have a larger footprint in Northern Kentucky, Louisville, Lexington and Elizabethtown.

A few weeks ago, WesBanco completed its acquisition of First Sentry Bank of Huntington, W.Va. That closed a gap in WesBanco's coverage area that stretched from Wheeling down to Charleston in West Virginia and across Ohio through the Columbus market to Dayton and Cincinnati.

WesBanco has about $10.24 billion in assets, making it the largest bank based in West Virginia. The largest banking company based in West Virginia is United Bankshares, which operates Virginia-based United Bank. The Farmers acquisition will increase WesBanco's assets to about $11.9 billion.

As with other industries, the banking industry in this part of the U.S.A. is consolidating. Mid-sized banks are finding it hard to compete against the regionals and superregionals. The thing about WesBanco is that it has expanded through acquisitions in the Ohio Valley, where most other West Virginia-based banks that have been aggressive in merger-and-acquisition (M&A) activity have bought up banks in northern Virginia. You know, where the money is.

However, WesBanco has set its sights on commercial lending activity in a region that includes the Ohio Valley. The company crossed the $10 billion threshold in assets several months ago. It had held back as long as it could to keep from triggering certain paperwork provisions of Dodd-Frank. The red tape involved in the Dodd-Frank threshold can cost a bank hundreds of thousands of dollars per year. But now that the line has been crossed, WesBanco has made two acquisitions.

Coal is hurting, and the metal and chemical industries are in decline, too, in West Virginia. Natural gas is booming, and there is lots of construction going on in building processing plants and pipelines to ship gas out of state. But banking appears to be different,

The current wave of consolidations has gone on for 25 years or more as banks from Ohio and North Carolina took control of West Virginia's largest banking companies. For whatever reason, West Virginia bankers have seen growth opportunities by becoming the hunters instead of the hunted.

Back around 1996 when a lot of former bank presidents realized they had been demoted to branch managers as their new out-of-state owners took more control of local operations. Here in West Virginia, we had several new banking companies — known in the industry as de novo banks — form around that time. But most if not all are gone now, having been absorbed by the larger in-state banks.

Who knows where this wave of consolidations will end? Don't ask me. I got out of the prediction part of this business when I realized  how bad I was at it. But time is circular, and what happened before probably will happen again. The questions are when and how.

Sunday, April 22, 2018

See you Tuesday or Wednesday

Hey folks, I've been under the weather for a few days. This late-winter or early spring cold just won't let go.

I've started working on something I expect to post Tuesday or Wednesday.

This has gotten me to thinking about people who work on the river for four weeks at a time. Do they get sick days? Or do they tough it out and do their jobs anyway? Perhaps things are different on line haul boats or passenger vessels. It was just something that came into my head.

So until Tuesday or Wednesday, here's a photo from last year. It's the M/V AEP Leader upbound at Huntington, W.Va. — America's Best Community.


Saturday, April 14, 2018

M/V Canton

It had been a few days since I had gotten a photo of a towboat just because it was there ...

... so this morning I got one.

Friday, April 13, 2018

Something that probably only I find interesting

At its northernmost point, the Ohio River is at about same latitude as the straight-line part of the Missouri-Iowa border.

At  its southernmost point, at Cairo, it is about the same latitude the straight-line part of the Missouri-Arkansas border.  It is also about the same latitude as Norfolk, Va., America's northernmost year-round ice-free port on the East Coast.

If I think of any more geographical oddities, I'll post them, too.

Wednesday, April 11, 2018

Two closures and a passing

First, the 150-year-old Roebling Bridge at Cincinnati is closed for several weeks for repairs.

Today this word came from the Huntington District of the U.S. Army Corps of Engineers:

Effective immediately, the Ohio River is closed to mariners at the Belleville Locks and Dam, Ohio River, mile 203.9. This unexpected closure is due to a hydraulic line failure in the main chamber. The auxiliary chamber is being prepared to open and will be available sometime this evening. The main lock chamber at Belleville will remain closed for repairs. The duration of the repair work is undetermined at this time.

And on a sad note, one of the survivors of the Silver Bridge collapse has died in North Carolina. From the Point Pleasant River Museum and Learning Center:

Our hearts were broken as we learned of the passing of our dear friend Mr. William Edmondson. We got to know and spend time with Mr. Edmondson and his family when he visited the Point Pleasant River Museum and later during the 50th Remembrance of the Collapse of the Silver Bridge. Bill was a Hennis truck driver, one of 5 people who fell into the Ohio River and survived when the Silver Bridge collapsed on Dec. 15, 1967. Our thoughts and prayers are with the Edmondson family during this time.

I and others met Edmondson after the ceremony. Of course he was swarmed by reporters with cameras and voice recorders afterwards. He patiently told his story and answered questions from us media jackals.

Monday, April 9, 2018

Too late

This morning I awoke to an inch or two of snow on the ground. That made for a great background for getting a towboat photo if there were any boats in the area.

Lucky for me, the Janis R. Brewer was coming down the river. I headed out for one of my favorite boat photo spots within close driving distance. But I was about ten minutes too late. The boat had done passed it.

So I went to my next spot that was available, given the high water that covered some others. Again, it was too late. The snow was gone from the background.

But I still got off a shot.

Maybe next time.

Saturday, April 7, 2018

Coal shipments are back to the new normal

Last year it looked like coal shipments on the Ohio River had bottomed out and were trending upward again. This year’s first-quarter numbers regressed to where they were in 2016.

High water this year could account for some of the drop in coal traffic, but not for all of it.

The declines in this year’s first quarter compared to last year’s were particularly noticeable at the to dams closest to the mouth of the Big Sandy River — Greenup and Gallipolis Robert C. Byrd. Coal shipments through Robert. C. Byrd were down about 42 percent compared with last year. Shipments through Greenup were down even more — almost 48 percent.

Coal traffic was also down at Racine, which has become the busiest locks and dam on the Ohio for coal traffic. It was also down at McAlpine and Cannelton, which probably handle more coal from the Illinois Basin, but it was up at Smithland and Locks and Dam 52.

Here is a chart comparing first-quarter numbers for the busier locks for coal.

Coal shipments, first quarter (thousands of tons)
Dam20172018ChangePct. change
Pike Island 2,768.7-1,587.7-36.5%
Lock & Dam 524,258.04,300.742.71.0%

The numbers from this year are down, but they tend to track 2016 numbers.

For those who are curious, here are numbers for three locks on tributaries.

Lock & Dam 2 (Monongahela)2,825.51,152.3-1,673.2-59.2%
Winfield (Kanawha)1,474.71,204.2-270.5-18.3%
Kentucky (Tennessee)2,280.71,358.7-922.0-40.4%

Here are first-quarter numbers for Byrd and Greenup:

First quarterR.C. ByrdGreenup

For decades, coal has been the primary commodity moved on the Ohio, especially on the upper half. Much as been written here and elsewhere about the reasons for the decline in coal traffic and what the outlook could be.

It makes me wonder when the time will come that coal barges will be a rare sight on the river.

But at one time we couldn't predict what shale gas and shale oil would do to domestic and international energy markets. So things may change. You never know.

Tuesday, April 3, 2018

More on Jeffboat

The Waterways Journal has posted its article about the demise of Jeffboat's operation in the Louisville area. The reasons given are not unexpected, given the downturn in traffic on some waterways and the lack of new boat builds, particularly the large boats, in recent years.

I was fortunate, blessed or whatever you prefer to call it to have had time in 2009 and 2010 to gt re-acquainted with the Ohio River after being so near but so far away for several years. It was exciting to chase down new boats that were coming through the area, whether it was on a pleasant day looking for the AEP Future or subzero cold to get a glimpse of the Paula Ruble.

Back to Jeffboat for a personal note ... Maybe it was twenty years ago, but I remember when Ashland Inc. announced it had reached a deal with Jeffboat to build new double-skinned liquids barges to replace the older single-hulled barges in its fleet. The big announcement was to be in Jeffersonville. To get us media jackals in the Huntington-Ashland market to Jeffersonville so we could cover the event, Ashland put us on a corporate jet and flew us down there and back. It was my only trip on a corporate jet. I thought they would be bigger, but I had no complaints.

Other than the jet ride and learning one of the Ashland p.r. guys was a fan of British sitcoms, I remember asking Ashland CEO John R. Hall one question at the news conference. I asked Hall if his position on the CSX board of directors — CSX owned ACBL at the time — had anything to do with Ashland's decision to have the barges built at Jeffboat. Hall said it did not.