- The Washington Times - Friday, June 9, 2006

WHEATLAND, Wyo. — In the time it takes to microwave a frozen dinner, another 120 tons of coal is dumped from a railroad car at the Laramie River Station. It’s a scene that can occur 200 times a day.

To keep electricity flowing to about 1.6 million homes, the power plant burns up to 24,000 tons of coal every day. The plant’s three generating units require a dependable, steady stream of coal.

This past year, however, the stream of coal was anything but steady, even though the plant is only about 100 miles from the largest producing coal mines in the United States — the Powder River Basin in northeast Wyoming, home to the nation’s top 10 producing coal mines.

As the power plant’s stockpile of coal, sapped by sporadic shipments, dwindled to less than a week’s supply, Basin Electric Power Cooperative had to make plans for scaling back the plant’s operations and power output.

“The best I can characterize it is that we’re operating on the ragged edge,” Basin Electric spokesman Floyd Robb said.

Basin Electric is not alone. Power plants around the country have seen their coal stockpiles dwindle, mainly because of problems with shipping coal out of Wyoming and increasing worldwide demand for energy.

The result has been higher electric bills in some areas because power companies were forced to replace coal with more expensive natural gas to feed their plants.

“People call us the Saudi Arabia of coal. But if you don’t get it to the power plants, it doesn’t matter,” said Mike Grisso, executive director of the Alliance for Rail Competition, a shippers’ organization.

The two main shippers of U.S. coal — BNSF Railway Co. and Union Pacific Railroad — say they are investing hundreds of millions of dollars in order to ship more Wyoming coal and keep up with an ever growing demand for power.

Anthony Hatch, an independent transportation analyst in New York, said he thinks railroads will meet future demands for shipping coal. But it will take time because of the enormous task of expanding an industry that until only a few years ago was abandoning track as its business dwindled.

But until the rail system can match rail capacity and demand for service, there will be periods where rail shipments can’t keep up, he said.

With plentiful coal reserves and alternative fuels still too costly or years away from becoming reality, coal is seen by many as the most practical means to meet the nation’s and world’s growing power needs.

Other power companies are having supply problems. Entergy Arkansas said its coal shipments declined up to 20 percent last year, forcing it to reduce operations at two power plants in Arkansas and to buy power on the open market.

Wisconsin utilities incurred nearly $50 million in extra costs last year because of interruptions in coal shipments.

Entergy Arkansas has sued Union Pacific Railroad, claiming the railroad schemed to hold back deliveries of Wyoming coal in an effort to make more money.

Union Pacific denied the claim, saying it actually turned down new contracts to ship coal in order to catch up with delayed shipments to existing customers.

Power-generating companies are not expecting any improvement this year. David Wilks, president of energy supply for the Minneapolis-based Xcel Energy, testified before a Senate committee last month that power companies may be forced to buy up to $2 billion worth of natural gas to make up for a coal shortfall.

It used to be that people would set their clocks by the train coming into town. But the business of running the nation’s train traffic is much more complicated these days.

Today’s railroads use a rail system that had not added track and other infrastructure for decades.

In fact, before 2003, railroads had been abandoning miles of unprofitable and underused lines.

BNSF and Union Pacific jointly share a rail line coming out of the southern end of the Powder River Basin.

With an average of about 61 coal trains a day traveling on the joint line, about 325 million tons of coal — about one-third of the nation’s total coal production — was carried over the line last year.

The same line handled just 19 million tons of coal in 1985.

BNSF and Union Pacific are investing about $200 million in a project that will eventually expand what had been a two-track line into three tracks for the entire 75-mile length.

A 15-mile stretch will get a fourth set of tracks, BNSF spokesman Pat Hiatte said.

As a result of the expansion, the two railroads expect to be able to ship more than 400 million tons of coal a year over the joint line.

And the first major rail expansion in the United States in about a century is in the works.

The South Dakota-based Dakota, Minnesota & Eastern Railroad is seeking $2.5 billion in federal loans to extend and rebuild rail lines so it can haul Wyoming coal to the Midwest and Great Lakes regions.

Its loan application is pending before the Federal Railroad Administration.

“What we’re seeing here is a rail renaissance,” Mr. Hatch said.

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