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For what it's worth (cut and pasted from TRAINS newswire 01/09/06): "Railroads struggling to keep up with coal demand GILLETTE, Wyo. - Railroads are trying to keep up with the increasing demand for coal shipped out of Wyoming, an industry official said in an Associated Press story that appeared in the Billings (Mont.) Gazette. As of Dec. 24, Wyoming produced an estimated 399.2 million tons of coal in 2005, including about 385.5 million in the Powder River Basin of northeast Wyoming alone, according to the U.S. Department of Energy’s Energy Information Administration (EIA). The EIA estimates that the United States will demand an additional 100 million tons of coal annually from the Powder River Basin by 2010. Coal production increased slightly in the Powder River Basin in 2005 even though railroads were unable to fully restore capacity on a triple-track main line that was damaged in the spring. Union Pacific and BNSF were able to ship about 85 percent of scheduled coal trains on Wyoming's main coal export route in 2005. The disruption of coal exports out of the Powder River Basin may contribute to higher heating costs this winter. The railroads will have to make significant progress on restoring and boosting shipping capacity on the joint line in order to meet what is expected to be unprecedented demand for Powder River Basin coal in 2006, Thomas Canter, executive director of the National Coal Transportation Association, said. "We'll be very fortunate if we can ship 345 to 350 million tons for 2006," Canter said. One project to boost coal shipments is the proposal by the Dakota, Minnesota & Eastern Railroad to ship Wyoming coal east through South Dakota and Minnesota. If constructed, the DM&E project would be the largest railroad construction project in the United States in 100 years. DM&E plans to build 280 miles of new line into Wyoming's Powder River Basin coal region from Wall, S.D., and to rebuild its 600-mile main line from southern Minnesota to Wall. DM&E also plans to upgrade 150 miles of its line from Wall, S.D., northwest through Rapid City to Colony, Wyo." Two things jump out. 1) It's been 10 months now and still the triple track Orin line is running at less than capacity. Anyone still doubt the benefits of dispersed redundancy? 2) If estimated demand for PRB coal is expected to increase by 25% in 2010, doesn't this bode well for DM&E's expected market share and demand-induced pricing power (assuming they can get the project done before then)?
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