Railroads and shippers are in a growing dustup over coal dust that could change the way key rail cargo is handled.
What began when BNSF Railway moved to slap strict limits on the amount of dust blown off coal shipments has mushroomed into a regulatory case that pulled in numerous coal firms, utilities and railroads.
BNSF says coal dust is fouling trackbed ballast in high-traffic coal lanes serving Wyoming’s mines in the Powder River Basin, the nation’s top coal production region.
So much dust comes off the loads, rail officials say, that it settles between the ballast rock, prevents normal runoff of rainwater and can distort tracks and ties.
Shippers, however, say their freight rates are supposed to cover track maintenance, and dust blowing off coal has always been part of that business. They say a BNSF tariff warning that it would limit the allowed dust emissions is an “unreasonable” practice.
The case, to be decided by the Surface Transportation Board, could, for the first time, give railroads clear power to set emission limits on cargoes carried in open-topped railcars. It also could force customers in effect to share with the railroads responsibility for trackbed maintenance by allowing new restrictions on shipments that strain rail infrastructure.
None of this takes place in a vacuum. Electrical utilities in recent years have been among the toughest customer groups confronting major U.S. railroads, lodging formal complaints against rail rates or service at the STB or pushing Congress to tighten rail oversight.
And, while coal is the largest rail commodity by far in terms of railcars hauled and tonnage carried, carriers have lost thousands of revenue trainloads of coal traffic during the recession.
The outlook is tough. With the U.S. rapidly building wind power sites to avoid new coal-burning power plants, increasing the use of natural gas by some utilities and moving toward historic carbon emission curbs on others, coal’s future isn’t what it used to be.
So when BNSF — supported by Union Pacific Railroad, which also serves Powder River Basin mines and shares some of the same track — digs into the sensitive issue of coal dust clogging its trackbed, it quickly hits a lot of nerves.
BNSF said the problem has been on its agenda since 2005, when congestion and flooding on Powder River Basin tracks became an industry controversy and when it determined that coal dust buildup contributed to a train derailment that exacerbated the situation.
After years of studying the problem, including the use of trackside detectors to measure dust coming off loaded cars, BNSF served notice last May that it had enough.
BNSF limited the amount of dust that could be emitted from coal cars using its Powder River Basin Joint Line shared with UP. And it said that as of Nov. 1, 2009, it would slap limits on dust blowing off cars on its nearby Black Hills track subdivision.
Shippers studied the tariff, and on Oct. 2 Arkansas Electric Cooperative asked the STB to block the railroad’s next move. It asked regulators to declare BNSF’s tariff on coal dust to be “an unreasonable rule or practice and a refusal to provide service in violation of BNSF’s common carrier obligations.”
The co-op represents nearly 500,000 electricity customers and has a partial stake in several power plants using Powder River Basin coal. It charged BNSF was threatening to refuse service “or otherwise penalize the shippers” if they did not keep the dust blow-off to levels the co-op said were “arbitrary.”
The case file grew rapidly from there.
BNSF delayed the target date to Aug. 1, 2010, and said it had never set any penalties or said it would refuse service if customers failed to comply. It also challenged the co-op’s standing to try to block the tariff because “BNSF does not currently transport coal cars for (Arkansas Electric)” or for any shipper to power plants the co-op cited.
The STB took the case last month, and is taking evidence. A host of coal industry groups and rail groups want to take part, and all have a stake in the outcome.
Unless the STB rebuffs BNSF, and other railroads in support, coal shippers could see big changes or hefty costs to make sure they take their dust with them.
Contact John D. Boyd at email@example.com.