The Importance of the Railroads

Washington Post:

The long trains that seem to be everywhere in this sparsely populated stretch of land haul nearly 1 million tons of Powder River Basin coal to power plants daily, but that's simply not enough.

Utilities are clamoring for more of this fuel, which has become a popular alternative to costly natural gas. The mines in this region, dubbed the "Saudi Arabia of coal," say they are able to increase production.

The bottleneck lies in the railroads.

Like the miners that unearth the coal, railroads must move mountains over the next few years to match the demand, said Andy Schroder, logistics director at Union Pacific Corp. <UNP.N>

Omaha, Nebraska-based Union Pacific, the largest U.S. railroad, and second-ranked rival Burlington Northern Santa Fe Corp. <BNI.N> own a joint 100-mile (160 kilometer) section of line here and are hauling record amounts of coal from the 10 mines in the area.

Both railroads are laying new track and are seeking ways to haul more coal, including using longer trains.

"We are adding capacity and are exploring ways to use that track more efficiently," Burlington Northern spokesman Patrick Hiatte said.

But U.S. utilities are unimpressed.

Trade group Edison Electric Institute spokesman Ed Legge said that while coal deliveries were up, many utilities were getting less than they had agreed upon -- and not enough to meet demand.