Wyoming’s Powder River Basin, the largest coal-producing region in North America, suffered two major coal supply disruptions in the span of three weeks.

A loaded coal train derailed four miles southeast of Lusk on Monday morning, overturning 21 rail cars and temporarily closing two “main lines.” No injuries were reported, and both rail lines were back in operation by late Tuesday, according to Union Pacific Railway.

On June 23, a tornado struck the North Antelope Rochelle mine — the largest coal mine in the nation — causing severe structural damage, injuring eight workers and hobbling the mine’s ability to load coal trains for several days. 

Union Pacific hasn’t yet determined the cause of Monday’s derailment, and the tornado strike at the mine was a random severe weather event, but both incidents revealed the vulnerability of a coal-by-rail infrastructure that the nation still relies on for about 15% of its electrical power generation capacity, according to the U.S. Energy Information Administration.

Industry analysts doubt that either event seriously threatened coal-power electricity generation. But, any prolonged Powder River Basin coal supply disruption could quickly become a problem for the power sector. Especially considering that UP and Burlington Northern Santa Fe Railway — the only two railroad companies serving the region — both have struggled to meet Powder River Basin coal demand in recent years.

“Any new delivery challenges are coming on top of problems with rail deliveries over the past year or so, and will only add to coal supply concerns in the power sector,” Seth Feaster told WyoFile in June.

Feaster, an energy data analyst for the Institute for Energy Economics and Financial Analysis, said even delays of less than a week could impact the nation’s power sector, and would “not be welcome news for customers.

“Capacity constraints in the rail system may make it challenging to easily recover from missed shipments,” Feaster added.

The still lingering failure by the rail companies to meet demand — which both blame on workforce struggles after massive layoffs and the COVID-19 pandemic — resulted in an estimated loss of 50 million tons in Wyoming coal sales in 2022, according to the Wyoming Mining Association. That’s a loss of about $100 million in revenue to the state.

The issue has also resulted in millions of dollars in fuel replacement costs at some utilities, at least one Wyoming-related lawsuit, a closed-door meeting between BNSF and Wyoming lawmakers and a call for Union Pacific to appear before the Interim Minerals, Business and Economic Development Committee on July 18 in Rock Springs.

Wyoming efforts

Minerals committee co-chairman Rep. Donald Burkhart Jr. (R-Rawlins) — who convened the closed-door meeting with BNSF in February — said the committee merely wants to hear an update from UP when the body convenes next week.

“Any new delivery challenges are coming on top of problems with rail deliveries over the past year or so, and will only add to coal supply concerns in the power sector.”

Seth Feaster, Energy Economics and Financial Analysis

“At this time, I know of no legislation being proposed regarding the railroads,” Burkhart told WyoFile via email this week.

Railroad labor unions have suggested possible measures to help counter what they claim is a headlong determination among railroads to reduce crew sizes, increase train lengths, defer maintenance and demand “inhuman” scheduling policies for their employees. None of those lobbying efforts have resulted in successful bills in Wyoming — so far.

Most recently, House Bill 204 – Allowable train lengths introduced this year would have limited the length of trains in Wyoming to prevent congestion. The measure was voted down in the House Corporations, Elections and Political Subdivisions Committee. Efforts to impose a minimum two-person train crew have also failed in the Legislature.

Though railroads appear to be improving performance to meet the demand to ship Wyoming coal in recent months, the situation appears a precarious, potential threat to the state’s mining industries, said Wyoming Mining Association Executive Director Travis Deti.

“Things have improved,” Deti told WyoFile regarding meeting demand for Wyoming coal-by-rail deliveries. “It’s not where it needs to be yet. But it has improved significantly over the past year. The train issues are still there.”

The minerals committee is scheduled to hear testimony from Union Pacific — and hear public comment on the issue — beginning at 2:15 p.m. July 18 at Western Wyoming Community College in Rock Springs. Click here to join a livestream of the hearing.

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Hundreds of workers escaped serious injury, though six required hospital treatment, when a tornado ripped through the North Antelope Rochelle coal mine in northeast Wyoming during a shift change Friday evening. The mine — the largest in the nation — was not as fortunate, suffering serious damage that temporarily halted production operations.

As crews continue to clean up and repair facilities, mine operator Peabody Energy says it will likely resume loading trains by Tuesday. But it’s unclear how long it may take to return to full production capacity.

“Initially, focus will be on restoring the train loading dock and the NARM North facility, where some power has been restored,” Peabody said in a statement Sunday. “Other parts of the mine will require power line restoration before they can return to operation. Rail cars that were blown over and derailed in the storm will need to be recovered.”

Any persistent supply disruption from the Powder River Basin coal district could threaten scores of coal-fired power plants across the nation. NARM, located in the southern portion of the basin, accounts for approximately 25% of Wyoming Powder River Basin coal production. The mine shipped 63 million tons of coal in 2021, about 13% of U.S. coal consumed for electrical generation that same year, according to the U.S. Energy Information Administration.

Texas is the largest consumer of Powder River Basin coal, according to the EIA, relying on the Wyoming product for approximately 16% of its electrical generation capacity in 2022. The Lone Star State is currently experiencing an intense heat wave, driving near-record demand for electrical power, according to reports.

Some experts say a temporary slow-down in NARM deliveries won’t likely seriously impact customers in Texas, however.

Coal-fired power plants typically maintain a stockpile of coal onsite to buffer against potential supply disruptions. Power plants burning sub-bituminous coal — the type mined in the Powder River Basin — kept an average stockpile of “126 days of burn” in March, according to the EIA.

Coal plants also typically increase their stockpiles ahead of the high-electrical-demand summer and winter seasons, University of Wyoming energy economist Rob Godby said. “Normally, this would not pose a huge issue unless [a supply disruption is] sustained for quite a while.”

The disruption, so far, should not have an impact for coal customers in Texas, according to Steve Piper, Director of Energy Research at S&P Global Commodity Insights. “This isn’t a sufficient disruption to cause a concern about coal supplies at Texas power plants,” Piper said.

Peabody hasn’t commented on the full extent of the damage or the scale of coal-delivery disruptions for its customers, which span several states.

‘Massive job to clean up’

The tornado measured as a 2 on the Enhanced Fujita Scale, given estimated wind speeds of 120 to 130 miles per hour, according to Rapid City National Weather Service meteorologist Susan Sanders who was onsite to assess the storm event Saturday.

A tornado warning was sent to cell phone users in the area about 10 minutes before the tornado struck the mine, Sanders estimated.

The tornado — along with damaging hail and torrents of rain — apparently struck the main operations center of the mine at about 6 p.m. Friday, according to Campbell County Emergency Services Agency Coordinator David King. Though the mine’s operations span many square miles — larger than most Wyoming towns — there’s a cluster of buildings and operational facilities at its main entrance. This area took the brunt of damage, King said over the phone while assessing the damage on location.

“I’m sitting here looking at aluminum and tin off of buildings wrapped around poles and things,” King said. “It’s just a massive destruction.”

Eight people were injured and six of them were transported from the remote location to nearby hospitals for non-life threatening injuries, according to King. The drive north to Gillette takes more than one hour, and it takes nearly an hour to drive south to Douglas. All six of the injured had been released from the hospital by Sunday morning, Peabody stated.

A roof was ripped off the mine’s “change house” — a locker room-type of facility where crews prepare before each shift and meet to discuss operational plans. Bay doors were torn from the mine’s fire and emergency station building, which may be “totalled,” King said. Tin siding was peeled away from atop a set of cement silos that are used to load coal into trains. More than a dozen coal cars were blown over on a railroad line in the vicinity. One “coach” bus that transports miners was flipped onto its side while several other vehicles were scattered into one another, according to reports.

“It’s going to be a massive job to clean up,” King said. “It looks like a typical tornado, especially when it hits a whole lot of steel buildings.”

The timing of the tornado strike couldn’t have been more precarious, King said. Between 150-200 workers are typically on location to ensure 24/7 operations, he estimated. But that number was nearly double when the tornado struck due to a shift-change that occurs between 6 p.m. and 7 p.m.

Given the number of people in the vicinity and the severity of initial reports, emergency responders from multiple agencies in Campbell and Carbon counties prepared for the worst.

“Everybody responded as if it was a mass casualty incident,” King said.

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