A shortage of coal shipped by rail to power plants in the Upper Midwest this summer is raising concerns that there may be an energy crisis this winter, similar to what happened with propane supplies last winter.
While trains have been moving lots of crude oil from North Dakota’s Bakken oil field, coal on rail lines from western states such as Wyoming and Montana to electric generating plants in the Midwest isn’t keeping pace with need.
Sean Craig, Dairyland Power Cooperative fuel supply manager in La Crosse, Wis., said they have a shortage on the ground right now.
“By now we need to build inventory to be prepared for the winter burn,” he said. “The concern that we have is the amount of rail coal being delivered into the terminal is not enough to start building that inventory.”
In three months, Craig said, it could become critical. Coal is shipped by rail to the Mississippi River where it is loaded on barges and brought to the utility’s power plant in Genoa, Wis. Once the Mississippi freezes over, the barges stop.
Barron Electric in Northwestern Wisconsin buys electricity from Dairyland Power. General Manager Dallas Sloan said the lack of coal could spike prices and bring down supply.
The problem could affect “this whole region if we have another severe winter,” Sloan said. “If we run out of coal just like they ran short of propane, prices probably go up, plants go on idle.”
Midwest Energy Terminal in Superior is experiencing similar issues. The facility which provides coal to several power plants along the Great Lakes and St. Lawrence River, including Minnesota Power, is struggling to get supply.
With supplies down by about 1½ million tons, President Fred Shusterich said this is the time of year his customers are stockpiling coal to prepare for the January-March shutdown of the Soo Locks, which brings most shipping to a halt on Lake Superior. This year, difficult ice conditions persisted into May. Yet the trains that typically bring coal from the west to the Superior waterfront facility are coming only half as often as usual. He said that while a typical 123-car rail shipment has a five-day turnaround, it now takes about 10 days to get the shipment.
Minnesota Power spokeswoman Amy Rutledge said the utility also is dealing with coal shipments that have slowed, but the situation is not critical and their supplies are fine now. They also are working with BNSF railroad.
“It’s a disappointing situation we’re all in, and it’s frustrating,” Shusterich said. “But I know the good people locally — and even the railroad is working hard — to get themselves out of it. But it’s going to be the mess that it is … I would be surprised if this is fixed before well into 2015. …
“This never should have happened, but it did and there are a lot of people suffering for it,” Shusterich said.
BNSF said in a statement to WPR that the company is investing $5 billion in expanding capacity, hiring more people and adding more locomotives. Company officials say they are focused on “priority issues facing customers.”
Equipment alone won’t solve the problem unless the railroad is able to improve the turnaround speed, Shusterich said.
The issue is getting state and federal attention.
U.S. Sen. Tammy Baldwin, D-Wis., released a statement saying: “Following last winter’s devastating propane shortage, I am committed to ensuring that Wisconsinites do not face another energy crisis as temperatures drop. My staff and I will continue to work with BNSF, the Surface Transportation Board, and Dairyland Power to find a solution to this looming fuel shortage.”
State Sen. Bob Jauch, D-Poplar, and Democratic state Reps. Janet Bewley of Ashland, Nick Milroy of South Range and Stephen Smith of Shell Lake also sent a letter to the National Surface Transportation Board in Washington D.C. The state lawmakers urged the federal agency to take immediate steps to increase coal shipments to Midwest utilities to avert an energy crisis similar to the propane shortage last winter.
Wisconsin Public Radio can be heard locally on 91.3 KUWS-FM and online at www.wpr.org.