Dive Brief:
- Slow railway deliveries have left many electric utilities short on coal reserves, an uncomfortable situation as almost a quarter head into the winter season with less than a 30-day supply on hand.
- Slow deliveries have been partially to blame, with coal competing for rail space with Bakken oil and a booming grain crop. Utilities are beginning to pressure BNSF to improve service or face possible regulatory fines, the Wall Street Journal reports.
- BNSF Railway Co. said last week it will spend $6 billion to expand and maintain its rail system next year to meet growing demand.
Dive Insight:
An association of consumers of coal from western mines, the Western Coal Traffic League, say slow deliveries by BNSF are threatening electric reliability, and the group has asked the Surface Transportation Board to force the railroad to speed deliveries—possibly using fines to ensure sufficient coal on hand.
“We’re trying to move oil, we’re trying to move grain, and we’re trying to move coal; competition for train tracks is up,” Beverly Jones Heydinger, chairwoman of the Minnesota Public Utilities Commission, told the Wall Street Journal.
Relief could be on the way, though not in time for the coming winter. BNSF Railway last week announced its planned capital expenditures for 2015 will be $6 billion, which will go toward maintenance and expansion of the railroad.
"BNSF's capital investment program since the beginning of 2013 through the end of 2015 is unprecedented and is clear evidence of our confidence in a growing economy and our intention to meet the demand for service that comes from all our customers," said Carl Ice, BNSF president and CEO. "We have made great progress in expanding the segments of our railroad that have been most constrained by rapidly increasing demand."
"Once these new capital programs are completed, we expect to further restore the capacity flexibility we have historically enjoyed to manage the periodic demand surges that come from a dynamic and fast-paced economic environment," Ice said.
