Article published Oct 30, 2007

Union Pacific expects continued record hauls if mines keep up

By BOB MOEN

Associated Press Writer

CHEYENNE, Wyo. — Union Pacific, which hauled a company record amount of coal out of northeast Wyoming last month, should be able to stay near a record pace as long as mine production keeps up, a company executive said.

"I think we're pretty encouraged about the rest of the year," Doug Glass, UP vice president and general manager, said in a telephone interview from company offices in Omaha, Neb. "As long as the mines can keep up with the production we'll continue to have a couple of good months here to end out the year."

UP hauled 1,118 trainloads of coal from the southern Powder River Basin in August, shipping a monthly record 17.2 million tons of coal, mostly to the nation's coal-fired utilities. UP followed that with 1,114 coal trains in September, the first time the company has loaded more than 1,100 trains in a 30-day month.

"We're part of the supply chain that is totally integrated," Glass said. "So the mines, the railroad and the utilities have to all work pretty seamlessly ... to optimize our performance. I mean if one of us are struggling then obviously you know ... the old saying we're only as strong as the weakest link."

UP and BNSF Railway jointly own a triple-track line that hauls coal out of the southern end of the Powder River Basin in northeast Wyoming. Two derailments on the line in 2005 temporarily interrupted coal deliveries, but since then, the railroads have invested nearly $1 billion to expand and improve their track and delivery systems.

Glass noted that the railroads continue to expand and improve their joint line in Wyoming.

"So sometime by the middle of next year we'll have well over 400 million tons of capacity on the south Powder River Basin," he said.

The line currently has the capacity to ship between 355 million and 360 million tons a year.