(The following article by Gargi Chakrabarty was posted on the Rocky Mountain News website on July 26.)
DENVER — Union Pacific Corp. – Colorado’s dominant railroad system – is spending millions of dollars to ramp up its fleet to keep up with the state’s burgeoning coal production.
The company is adding 4,000 new rail cars – 525 dedicated to coal transport – and 315 locomotives. A new rail car costs $60,000, while a new locomotive costs nearly $2 million.
Hundreds of new rail cars and dozens of new locomotives will haul coal from mines in Colorado, where Union Pacific owns 1,702 miles of track. In total, the company owns 33,000 miles of track across 23 states.
In Somerset, near the North Fork of the Gunnison River, Union Pacific has promised to haul nearly 2 million more tons of coal this year, or 19.2 million tons, from three coal mines in the area. The three mines – Elk Creek, West Elk and Bowie – together account for nearly half the coal produced in Colorado.
Those mines were left with huge inventories of coal last year when Union Pacific failed to carry all of the coal out of the North Fork valley. Chris Carroll of the Colorado Geological Survey said the mines could produce more if the railroad companies buy new rail cars and locomotives.
“The coal companies have mostly sold out their coal this year,” Carroll explained. “If they could increase shipment, they would definitely sell more coal.”
Union Pacific expects to increase its coal transportation 10 percent this year.
“The demand just keeps increasing,” said Union Pacific’s Energy Marketing Director Dick Hartman. “We’re taking more coal out of Colorado than ever before.”
The state produced 40 million tons of coal in 2004, up from the previous year’s 35.9 million tons. This year, the U.S. Department of Energy’s Energy Information Administration estimates that the state’s production will more or less remain flat.
And that is partly because the railroads do not have enough capacity to carry more coal, even if the mines were to increase production.
James Cooper, executive vice president of Oxbow Mining LLC, which owns the Elk Creek mine, said the railroad is doing a lot of work in Somerset. For instance, the company hauled 150,000 tons of inventory in the past two weeks alone.
Cooper said the three mines could easily produce 19.2 million tons this year if Union Pacific keeps its promise. Last year, the railroad company hauled only 17.3 million tons, although the three North Fork valley mines had produced a total of 18.2 million tons of coal.
“So far, this is good news,” Cooper said. “I look at them and they are just like us, trying to do the best they can with their business.”
Union Pacific is spending $4 million to build a new siding outside Grand Junction. A siding is a side track where a train can sit to allow another train to pass through on the main track.
The new siding would allow more trains to run on the single track running from Grand Junction to Somerset.
The company also completed the $40 million Denver bypass in December 2004, running from about the Interstate 76 bridge between Federal Boulevard and Pecos Street east to Broadway, to ease the flow of eastbound trains going toward Kansas City, Mo.
It rebuilt the lines between Grand Junction and Somerset a few years ago, an investment of $25 million. And the main line from Denver going toward Kansas City, used primarily by the coal trains, was rebuilt in 1998 at a cost of $660 million.