The Baltimore Bridge Collapse Is Throwing the U.S. Coal Market for a Loop

The Port of Baltimore — currently closed to container traffic thanks to the collapse of the Francis Scott Key Bridge early Tuesday morning — plays a pivotal role in the energy trade, but not for anything that the Biden administration would like to talk about. It’s not some major nexus for clean energy components (although many cars go in and out of it), or even the liquefied natural gas that the U.S. proudly ships to Europe (that’s about 80 miles south at the Cove Point in Lusby, Maryland).

Instead, what’s flowing through Baltimore is coal.

The Port of Baltimore is the second largest coal export facility in the U.S. About 20% of U.S. the country’s coal exports ran through the port in 2022, according to the Energy Information Administration. In the first nine months of 2023, the most recent period for which data is available, about 20 million short tons of coal traveled through the port, a 20% jump from the same period in 2022. (At the Port of Virginia, about 150 nautical miles to the south, that figure was 26 million short tons, up just 6% from the beginning of 2022.)

U.S. coal largely went to Europe and Asia, with big jumps in exports to Indonesia and Vietnam. The biggest recipients of U.S. coal are India, South Korea, China, and the Netherlands, where coal is shipped for transport across Europe.

The projected block up of coal exports could last more than a month, one coal shipping executive told Bloomberg. While it’s still unknown exactly how long the port will be closed to container traffic, the effect of the collapse is already visible in the stock prices of coal companies that use the port.

Shares of Consol Energy, for instance, which ships more than 10 million tons of coal annually through a terminal at the Port of Baltimore, are down 7% for the day. Consol’s coal comes from mines in southeastern Pennsylvania and southern West Virginia, where it’s then shipped by rail to Baltimore. Shares of one rail company that services the terminal, Norfolk Southern, dipped in early trading Tuesday but were flat Tuesday afternoon, while shares in CSX, the other rail company that serves Consol’s terminal, were down 2%.

“We do not have a definitive timeline of when vessel access or normal operations will resume,” Consol said in a statement Tuesday. “We are looking at all available options to us to minimize or address direct and indirect impacts to the Company and its operations.”

In terms of its effects on the overall energy market, the port’s indefinite closure could be mild and may actually result in lower energy prices in the Northeast, as coal that would have been exported becomes, essentially, stranded stateside, Greg Brew, an analyst at the Eurasia Group, told me. But even this effect may be muted, Brew explained, because the weather is warming up with the end of winter, meaning there’s less demand on natural gas for heating.

“That can’t be too affected by more cheap coal sitting around,” Brew said.

The port is also a major throughway for imports and exports of cars, with around 750,000 cars going through it. GM and Ford said that they were diverting shipments around the port.