Union Pacific lifts coal embargo

Union Pacific lifts coal embargo

Union Pacific said on Tuesday it halted an embargo on new business on a section of track serving the coal-rich Powder River Basin in Wyoming.

The embargo officially ended March 27.

The embargo went into effect on a section of track Union Pacific operates jointly with Burlington Northern Santa Fe railroad July 18, 2005, after heavy rain resulted in two derailments and necessitated an extensive track repair program.

Union Pacific will now accept and seek new business on that section of track, officials said.

Burlington Northern Santa Fe has not had an embargo on new business on the line but had another line that entered the Powder River Basin from the north side. UP had no access to that line.

The embargo imposed by UP was in place to insure customers got the coal they needed.

The demand for low-sulfur, cheap coal from the Powder River Basin soared as utilities have sought alternatives to more expensive natural gas.

Union Pacific and BNSF set new records last year for the amount of coal they hauled but failed to keep up with the nation’s rapidly growing appetite for coal and drew criticism in the process.

Officials learned that the joint line had accumulated coal dust on the rail bed and that it had become unstable after two derailments in May 2005. The accidents resulted in major repairs on the 102-mile track and prompted the embargo.

UP officials said they completed a number of projects that have increased capacity and and expect to continue adding capacity. UP expects to begin signing up new customers for the first time in two years.

”Western coal from Colorado and Wyoming supports critical energy needs throughout the entire United States,” said Doug Glass, vice president of energy, Union Pacific Railroad. ”The embargo was originally put in place during the summer of 2005 when an aggressive track work program was under way to restore full capacity to the Joint Line. The embargo allowed us to protect service to our existing customers without being forced to transport coal to new customers.”

About Union Pacific

Union Pacific Corporation, the nation’s largest railroad, is also one of America’s leading transportation companies. Its principal operating company, Union Pacific Railroad, links 23 states in the western two-thirds of the country and serves the fastest-growing U.S. population centers. Union Pacific’s diversified business mix includes agricultural products, automotive, chemicals, energy, industrial products and intermodal. The railroad offers long-haul routes from all major West Coast and Gulf Coast ports to eastern gateways. Union Pacific connects with Canada’s rail systems and is the only railroad serving all six major gateways to Mexico.

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