growth rates are impressive, the higher growth rate in Wyoming may reflect differences in labor

incentive structures, workplace rules, and technology adoption.

Another key factor contributing to PRB coal competitiveness is an efficient rail transportation

network. In 1980, the U.S. Congress passed the Staggers Rail Act that deregulated the railroad

industry. Prior to passage, rail rates were linked to tariffs regulated by the Interstate Commerce

Commission. After passage, railroads could charge their own tariffs and began to compete for

business by setting competitive rates. After the early to mid-1980s, average rates for coal

transportation declined steadily. In Figure 13 regional coal transportation rates are reported from

1979 to 2010 for coal shipped from Appalachia, Illinois, and the PRB. Coal transportation rates

Higher productivity and lower transportation costs contributed to a trend of declining real prices

for coal in the U.S. from the late 1970s through the first few years of this century, see Considine

(2013). Prices for bituminous and sub-bituminous coal are plotted in Figure 14 from 1979 to 2011.

Wyoming coal is primarily sub-bituminous coal so prices for this grade reflects trends in PRB coal

prices. The first notable feature of this time series plot is the wide differential between prices for

bituminous and sub-bituminous coal. These price differentials are consistent with a competitive

market in which prices reflect productivity and cost differences between regions. Early in the

sample, sub-bituminous coal prices were about 40% of prices for bituminous grades. Towards the

end of the period, prices for sub-bituminous grades were only 27% of bituminous prices. This price