I had (and still do) study this coal issue, and from my observations and reading quite a bit of different sources. And I will state this mail order pamphlets about the time of WWII about “Train to become a railroad fireman by mail at home” are gold for reading.
Some have come close to the correct answer however not put all the cards on the table.
I feel least four things and possibly more come into play here.
1) The otherwise cost.
Jim Betz, you kind of muddy the argument up here.
Is it the cost of a coal in a train used for company service? Or to a customer? You listed “such as to a railroad or to a cement plant (or any other large industry such as a steel mill or power plant).
This is why on my railroad company coal was handled as “filler tonnage”, coal for a customer “priority freight”, and up there with general merchandise.
OK, first one is like the gas you spend in your car driving to get a container filled for your lawnmower, or me for the snow blower. Shipping coal to the cement plant industry is pure profit.
And since all trains have tonnage limits, hauling a car of “company coal” means one less car to an industry. Tonnage added to fill out the tonnage rating after all the priority traffic was sorted into a train. To run a train just to clear a yard of company coal was a major no-no.
And by the way – one car of diesel fuel equaled 24 coal cars why?.... Answer later.
From this point, I will try to talk about “Company coal” if railroad related.
2) Cost of coal at the mine head/dock/interchange point. On any railroad, it cost money to haul company coal and this added up, mile after mile until the transportation costs were appreciable.
Still however in spite of transportation costs at one time on the NP, Six dollar per ton Kentucky Coal that came off the Duluth / Superior docks could compete with two dollar per ton Colstrip Montana Lignite to about Glendive, Montana.
OK, someone will state mileage Colstrip to Glendive is 160 miles or so by rail, while Duluth – Glendive is 600 +/- miles. What gives?
3) BTUs per ton that is what gives. And what no one has stated so far. That Kentucky Chestnut coal has quite substantial BTU’s compared to the “brown dirt” lignite that the NP mined. It I only that the NP could mine with non-union labor with strip mining techniques that made even that coal useful. The lignite had about 1/3 of the BTU content, however was about 1/4 the price of better grades of coal. Within those two percentages, (with lots of lab work to perfect a grate that would burn this coal and not have it settle unburnt into an ashpan or blow unburnt out the stack, the NP made this work.) That is one example of the different factors at play. (And why Robert LeMassena wrote in the June 1968 Trains that NP had some of the most powerful locomotives ever built, then miss-fed them with lignite. )
BTU content is why the one tank car of oil equaled 24 cars of coal.
Or put another way, the diesel fuel in that one tank car you now carry since you dieselized, means you can carry 23 other cars of paying customers freight, and stay in the same tonnage rating/siding length.
4) What exactly are you going to use the coal for? Honestly?
The NP used different grades of coal or I should say BOUGHT different grades of coal off the docks in Duluth to use depending on if it was a stationary boiler at a power plant (ie: at a roundhouse) a passenger locomotive, a freight locomotive, or a depot stove. Later, once diesels did come onto the scene, things changed further as the ability to haul longer trains meant that the cost to carry things did drop and that prior lignite transportation cost was less. Enough that Colstrip lignite could be used in St. Paul, MN and BTU wise compete price wise with the Kentucky coal. Both retained former level of BTUs, it was the transportation cost that was different.
Another factor to consider: Also, fuel like lignite “slack off” lose BTU content in about six weeks, (like the gas in the lawn mower goes “bad” over the winter,) the higher grade coals, BTUs were stable six months or even longer. The NP would put boxcars midway and at the ends of some branch lines in case the locomotive got snowed in on the branch. If you want the coal to be useful (burnable) in February, which do you choose?
4b) Many cities had smoke ordinances not only on locomotives (many of us are aware of those screens inspectors and officials looked through) however businesses had the same demands placed on them. The NP and I am sure quite a few other railroads looked at specific boilers and asked “what is the cheapest coal (determined via BTU output per ton of coal) we can purchase for this location that will work satisfactorily. Not smoke and get inspectors after us.
OK, now a businessman who is a building owner. He has a boiler to supply the building, with hot water, with heat. The building boiler furnace has a stoker and stokers have been around since 1902 or so. You can set them to run at a certain rate however you still need someone to make sure that the hopper feeding the stocker does not run out or the stoker jams and so on. He will figure the BTUs he needs so his stoker does not run full speed causing almost constant smoking, nor feed it more expensive coal than he has to. And if he has to run the stoker constantly, it will wear out prematurely and need to be replaced. Another cost to consider.
And Jim Betz, regarding your concrete plant here. The above example would closely adhere to that. The plants furnaces or boilers will be undoubtedly designed to burn a certain grade of BTU coal. After that it is just market economics at play.
And does the railroad serving the plant have anything to do with that?
No, if so then they really are playing with fire. A railroad vet, Jerry Masters, answered a query like that to me years ago. “Oh heck, certain salesmen used to say that if we gave a special rate, (through kickbacks outside published rates) they would give us all their business, but you could not do that, everybody knew it was illegal.”
4c) Even people domestically did this, (priced BTU’s) but for slightly different reasons. As I have wrote prior of what my father used to tell my brother and me when he was a young boy: “If I put some coke in the furnace, then put a piece or two of good bituminous in there to keep the coke burning, I could go to bed and sleep through the night and not have to tend to the stove till five or six when I threw a few pieces of bituminous in there and went back to bed for an hour or so. By then the house was warm when everybody got up”. So, two fuels, coal and coke, and an awareness the coal is to be “a good grade of bituminous”.
So he and his mom and siblings could sleep through the night. Price of convenience here.
4d) What are you going to use the coal for?
For example: There were good grades of coal to be gotten out of Red Lodge, Montana mines and in good quantities. However, it had some impurities. Some railroad building plans seen for this area list that “heavy triple ply roofing is to be used in the Red Lodge coal district”. Seems those impurities threw sparks and would burn down buildings from time to time.
Use of the Red Lodge coal through tunnels. This coal was tried west of Livingston, MT twice, through the Bozeman tunnel and with the same results. Almost killed the crews. (So much for the romance of the rails.)
4e) What size of coal? Before stokers came into the scene, pea size or fine coal was almost worthless. Other have posted coal size listings and here, Google is your friend, so I won’t list them.
Coal costs were based on BTU content, size of pieces, and transportation costs. (So where ever a large body of water is nearby…)
You mention the West Coast. San Francisco imported a lot of coal (by water) from Tacoma, WA, and I am sure elsewhere. Right up to the San Francisco earthquake where the use of coal was blamed on a lot of the fires that started post-quake. They (SF) then went to natural gas after that. (And if that IS safer is different argument). Pacific Coast Railway was one supplier, NP hauled coal from Roslyn and other areas inland from Tacoma - however this predates your question.
In writing all of the above, I hope to get across, there is no easy one answer.
At the end it is - how much it costs / per BTU - when it crosses onto your property. And of that, many factors came into play. James Dick St. Paul, MN