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Growing demand for coal a challenge to railroad transport
By Bob Moen
The Associated Press
6/11/2006
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 some 1.6 million homes, the power plant burns up to 24,000 tons of coal every day. Operating 24/7, the plant's three generating units require a dependable, steady stream of coal.
This past year, however, the stream was anything but steady, even though the plant is only about 100 miles from 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.
Xcel Energy's top energy-supply official said consumers have been forced to pay tens of millions of dollars in higher utility bills because of delays in railroad coal shipments.
In testimony last month before a U.S. Senate committee, David Wilks, Xcel's Denver-based president of energy supply, and other utility officials said U.S. railroads' coal-shipping delays are boosting consumers' electricity bills as much as 10 percent because of the switch to natural gas.
"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 believes 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.
"The economy is still rolling along, so everybody expects production and demand to keep increasing," said Fred Freme, industry statistician with the U.S. Energy Department's Energy Information Administration. "It is the cheapest as far as electric generation goes."
