(The following article by Dustin Bleizeffer was posted on the Casper Star-Tribune website on March 28.)
CASPER, Wyo. — Union Pacific Railroad has lifted its embargo on new shipping contracts out of the Powder River Basin coal mining district in Wyoming.
The embargo was in place since July 2005, a month after back-to-back derailments on the jointly owned triple track route snarled traffic out of the basin and led to severe stockpile shortages for Powder River Basin utility customers across the Midwest.
Doug Glass, Union Pacific’s vice president of energy, said the embargo allowed the railroad to repair track and expand capacity for its Powder River Basin traffic. But some Powder River Basin coal users expressed concern that it may by too soon for the railroad to take on additional shipping commitments.
Randall Rahm, chief operating officer for Ethanex Energy Inc., said railroad service to many Powder River Basin customers still has not been restored to levels before the 2005 derailments.
“The (Powder River Basin) is one of the most complex rail systems in the world and very sensitive to minor disruptions,” Rahm told the Star-Tribune Tuesday via e-mail. “I hope the UP has the equipment and personnel to support the new volume.”
Union Pacific issued a press release Tuesday maintaining that its coordinated expansion effort with BNSF Railway, along with new maintenance and scheduling efficiencies, allows the railroad to take on new contracts while still meeting existing commitments.
“Union Pacific has the ability to move coal that its customers demand, although episodic mine production problems may affect deliveries,” Union Pacific stated in the press release.
BNSF Railway jointly owns the triple-track line that serves the southern Powder River Basin mining district. Although BNSF did not declare an embargo, utilities report that the railroad has been particularly selective in taking on any new shipping commitments.
Wyoming coal production spiked by more than 10 percent in 2006 due to a rush to replenish stockpiles of Powder River Basin coal at electric utilities related to the 2005 derailments.
Wyoming coal mines shipped about 446.1 million tons of coal in 2006, according to a Casper Star-Tribune survey and data from the U.S. Department of Energy’s Energy Information Administration. The Powder River Basin supplies about 35 percent of the nation’s coal. Coal fuels about half of the nation’s electrical generation.