"Products of Forests" To Offset "Products of Mines"?

This past Tuesday's Journal carried an interesting column suggesting that increased construction activity will noticeably offset the loss of coal traffic:

http://online.wsj.com/article/SB1000142 ... 67236.html

Brief passage:

• They say the only way to see the real America is by train.
  
  Whether or not that is the case, railroads paint a great picture of what is and isn't working in America's economy. For example, the recovering housing market and resurgent U.S. auto industry are reflected in a 13% and 16.5% respective increase in lumber and motor vehicles shipped last year, according to the Association of American Railroads

The unfortunate fact as noted within this "piece" (I'm not certain whether to characterize such as an "article" or "opinion") is that domestic utilities, who do sell their product (even if somewhat less so now that their are third parties increasingly involved in the process of selling residential electricity) to "John Q", hold that "coal is bad"; never mind that natural gas is also a product of the domestic energy boom and utilities find greater public acceptance in its use to generate electric current.

Only problem, natural gas is a product not exactly conducive to being handled by rail; the "bad stuff' of course there is only one reasonable and practical means to transport that. Both CSX and NS have now reported unfavorable Fourth Quarter (CY & FY) earnings attributing such to coal.

Now the "piece" noted export coal; CSX and NS mostly handle coal for the European markets through their Hampton Roads facilities. All of Europe is in a economic "morass"; while of course the former Soviet-bloc nations have greater reliance on coal for their economic output than those of Western Europe, public sentiment against coal will only rise. To what extent export coal to Europe will continue to be a long term traffic source can be debated. There appears to be a continuing market for export coal to Asia, and this is reflected in the building of several facilities along the lower Columbia River must to the dismay of environmentalists. Coal would move from the Powder River region to these facilities for onward shipping to Asia. Only problem; it would appear that the rail facilities in the Powder River region are set for the Eastward movement of coal; in order to handle such Westward, additional capacity will have to be built.

However, the real "ace in the hole" will be the industry's ability to retain the "bonanza" traffic from the Bakken Crude oil deposits. No question whatever, the most economic and efficient means to move petroleum products is pipeline. However, there are considerable capital costs and at present environmental resistance to the further construction of such - in short, the NIMBY interests for once are working in favor of the railroad industry. What is incumbent on the industry is to develop a business plan, along with successful marketing of such, that will enable the industry to continue its dominance in handling this traffic (the continuation of such is public acceptance of $4/ga and that some Sheik of Araby doesn't get desperate and start dumping product on the market - remember Abdul's stuff costs far less to extract per bbl than does Bakken) rendering it unnecessary to build a new network of pipelines to handle the crude.

There is of course the dangerous shoals of post-PANAMAX to address; I have commented on such at many another topic, so here I defer to other members to address such if they so choose.

According to some of the Lumber wholesalers I deal with at work they say, that is approxomately 2 to 3 years worth of unsold framing lumber sitting at transloads and warehouses just in the US that is not sold. Once they work thru that there will more traffic moving I would think. Plywood and waferboard and other types of sheathing are always tight for supplies and that moves pretty regularly and alot moves by truck because of the shortness in supply in certain areas. A lot wholesalers buy on speculation and also lumber futures and the will store it at reloads an warehouse in the US until they sell it.

Without discounting any of Mr. Bigfreight's immediate observations, Monday's Journal reported on the impact to the economy's recovery arising from the housing sector. The article certainly suggests that the railroad industry will be a beneficiary from such, not only arising from increased lumber shipments but also "all the stuff that goes inside" - furniture and appliances:

http://online.wsj.com/article/SB1000142 ... 22300.html

Brief passage:

• Rail-freight operators are benefiting from the increased movement of furniture and supplies. Union Pacific Corp., which posted a 7% rise in quarterly profit, said lumber shipments increased 17% as housing starts showed solid year-to-year improvement.
  
  In the second half of this year, Union Pacific's business that transports goods by land, sea and air will be driven by furniture and "the things that you build housing with," said the railroad's marketing executive, Eric Butler

Unfortunately, the article you posted the link for is subscriber only content so I couldn't read it.
As far as the Gulf (Persian, not Of Mexico) producers hypothetically dumping oil; China's and much of the rest of Asia's voracious and growing appetites for energy make it unlikely to make the newer US development uneconomical, IMHO..
I very much doubt that the WSJ's editorial position holds the coal industry as "bad", however.