(Bloomberg News circulated the following article by Christopher Martin on July 28.)
DENVER — Railroad disruptions are cutting into U.S. power-plant coal stockpiles, prompting concern at the Energy Department about electricity shortages.
The agency asked for a report from the North American Electric Reliability Council on how coal inventories are affecting power supplies, said David Hilt, the organization’s vice president of compliance. The council, which oversees the grid, has asked regional reliability groups whether supplies are adequate.
Railroads have cut up to 20 percent of deliveries on damaged lines from Wyoming’s Powder River Basin, and coal stockpiles are dropping. A heat wave in the Southwest and California last week and in the mid-Atlantic states this week has plants burning more coal. Utilities typically hold enough to last for 40 days.
“Utilities were counting on the railroads not to miss a beat,” Daniel Roling, an analyst at Merrill Lynch & Co. in New York, said in an interview. He estimates utility supplies at the end of June were at 35 days, 15 percent below a year ago. “Inventories have been drawn down to a level that’s not prudent.”
The limits on coal deliveries may signal that mining and transportation infrastructure needs to be expanded to accommodate renewed interest in coal. President Bush has said coal will grow in importance because of rising oil and natural-gas prices.
Union Pacific Corp. this month said it cut coal shipments from Wyoming by as much as 20 percent until at least November.
The rail line leading from the Powder River Basin, the busiest in the U.S., has been disrupted since May, when there were two derailments related to damage caused by heavy rains.