Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Coal

Midwest flooding may affect utility coal shipments, stockpiles for months

Energy | Coal | Thermal Coal | Shipping

Staying alive: the future of the ever-evolving thermal coal market

Electric Power

Platts M2MS-Power

Oil | Crude Oil | Refined Products | Equities | Financial Services | Private Markets

North American Crude Oil Exports Summit, 2nd Annual

Coal | Coking Coal | Steel | Raw Materials

US 2020 met coal contract talks hit by 25% fall in benchmark, US supply risk

Midwest flooding may affect utility coal shipments, stockpiles for months

Highlights

Union Pacific, BNSF still shipped roughly 60% of demand in March

Recovery to 'pre-flood levels' took place in April

Utilities could feel the impact of flooding in the Midwestern US for months to come, railroad and coal sector representatives said Wednesday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Powder River Basin coal shipments were hit the hardest by the combination of cold winter weather early in the first quarter followed by strong rain in mid-March, resulting in flooding that railroad representatives said they had never previously seen.

Linda Brandl, Union Pacific's vice president of energy, said at the Surface Transportation Board's Rail Energy Transportation Advisory Committee Meeting that the frozen ground in the region could not absorb the water, making way for "unprecedented" flooding. Small vehicle-sized ice chunks in the rivers broke off as well and were strewn across the region.

Union Pacific's network saw 13-day outages in some areas during the period, marking the worst of Brandl's career, she said. The railroad worked with customers and "rerouted as many of the 50 trains a day that typically traverse that corridor as we could."

Union Pacific and BNSF Railway, two of the large railroads that were hit the hardest, put together operating plans to keep Powder River Basin coal flowing to utilities, said George Duggan, who leads BNSF's coal business.

While the railroads deal with inclement weather every year, it typically does not result in the level of damage the network saw this spring, he said. BNSF raised tracks 10-15 feet higher in some areas after a prior flood, but the water still reached the tracks and five subdivisions are still under water.

"I had the opportunity to work with our customers in the 2011 floods," he said. "The magnitude of this one was two, three times that."

BNSF has improved its surface track and is loading 40 or so coal trains a day in the Powder River Basin, Duggan said, and working with customers to recover and reload inventories.

Union Pacific expects continued improvements and is seeing residual effects, including in the Mississippi River region, Brandl said. Despite the circumstances, the railroad saw a 19% year-on-year improvement in freight car dwell during Q1 and a 7% increase in freight car velocity over the period.

Scott Yaeger, Peabody Energy Corp.'s director of transportation, said train loadings in the region came to a "screeching halt" in March, but Union Pacific and BNSF still shipped roughly 60% of the producer's customer-nominated demand that month and recovered to "pre-flood levels" in April. The devastation occurred in an area "critical to Powder River Basin coal traffic," he said.

"It was in the main corridors where 80% or more of Powder River Basin coal travels," Yaeger said, "and the fact that they were able to recover as quickly as they [could] was really a remarkable thing."

FLOODING LOSSES

Jennifer Hood, vice president of transportation for Contura Energy, referencing an estimate from Doyle Trading Consultants, said that about 5.5 million st of coal deliveries were lost as a result of the flooding, much of which occurred in March and the first half of April.

"While obviously everyone hopes that those deliveries can be made up this year, May and June are historically the wettest months of the year in Montana and Wyoming," she said, "So it'll be after that before we see any material catch-up."

Brian Fuller, director of coal services at Southern Company, said utilities are usually trying to build their inventories in the spring to prepare for higher summer demand, but his company was unable to do so to the extent executives would have liked. He estimated the utility's inventory is about 10-20% lower than the company would prefer.

"We're going to be behind a little bit of the curve going into the summer," Fuller said. "We'll be okay, but we will have to continue to build that inventory back throughout the summer and even into the fall period."

-- Ellie Potter, S&P Global Market Intelligence, newsdesk@spglobal.com

-- Edited by Valarie Jackson, newsdesk@spglobal.com

Request a free trial of: Coal Trader

Platts Coal Trader provides traders, risk managers, analysts and other professionals with factors affecting the coal market including supply and demand dynamics, export market fluctuations, and market moves. Click the link below to see how this publication can meet your needs.

Free Trial