The budget is signed, so I'm all for "on to Larkspur....." asap. And, let the track maintenance tax credits send more hops to Lagunitas, soon.

I don't expect any significant export of oil (rail or otherwise) at these prices, except maybe to Japan from the North Slope, in the very short term. I had predicted earlier this year that these price would flatten out and come back up a bit by the fall, and I was clearly wrong. Iranian oil isn't even flowing at much volume yet, so oil will probably go even lower into the winter and early spring.

This is not good news, near term, for new domestic fracking production, and/or rail shipped oils or fracking sands. But, this is the time to buy every kind of oil service stock, as they won't be this cheap again this decade, as the world economy continues to grow. However, this is great news for the consumer, and the overall economy, since it is like a massive "private sector" tax cut given out to everybody who ever needs to fill their tank, or who makes or buys almost anything made or shipped.

I do expect natural gas edging $1.70 per mmbtu will compete very well with filthy Chinese coal for power production. The ability to export large volumes of gas from the west coast is currently somewhat limited. But there are several options out of Texas and the Gulf coast for that. Rail will not play a significant role in that, however.

I also expect to see a big pick up in Chinese purchase of western coal (moved by rail), due to the horrible air pollution in northern China, in the mid term. This despite the economic growth rate "slowdown" in China, which has been less steep (and still nowhere near negative....?) than the always pending "end of the world" nonsense that the media would have you believe.

Domestic rail coal traffic is going to very slowly continue to die as natural gas replaces coal fired power almost anywhere a utility can get it, or get out of existing long term coal contracts. Cost differentials and flat US electrical demand growth, way more than environmental concerns, are really driving this switch to gas fired electrical power. However, the environmental benefits of replacing coal with gas fired plants for CO2 emissions are truly staggering, even with relatively "cleaner" western coal.

Protectionism (Nancy's "exporting refinery jobs" nonsense), jingoistic nationalism (America got to keep her own oil or awful things will happen), and/or molly-coddling American consumers (the consumer will be robbed by the evil oil conspiracy) with "feel good" economic policy is bad both for our economic well being and the environment in the long run. Protectionism, for any reason, by its very nature, makes our economy inefficient, wasteful, and uncompetitive. Whereas free trade is almost always good for the consumer and society as a whole, and always also benefits a healthy competitive transportation sector, in the long run.

This is actually a real budget compromise, and while it contains plenty of pork, perks, loopholes and bull (when hasn't it?), the very act of shutting down the noisy extremes and getting to a compromise at all, seems to be an improvement, given the low bar we've come to set for Congress lately. And, we even got a new train extension from Santa.....

So Merry Christmas to all and to all a good night.....!