A dispute between railroads and labor unions could result in a shutdown as early as Friday, halting most train traffic across the country. Trains carrying freight, coal, soda ash, and other commodities through Wyoming would “stop right where they’re at,” according to a local union representative.
This is a major concern for utilities across the country that rely on Wyoming’s Powder River Basin coal. The region provides half of the coal used to generate electricity in the United States.
Even without a work stoppage, the Powder River Basin’s only two rail service companies, Union Pacific Railroad and BNSF Railway, have been unable to keep up with increased demand and higher prices for Wyoming coal for nearly a year.
Although both sides in the labor dispute anticipate that a shutdown will prompt Congress to quickly order crews back to work, a disruption in rail service for any length of time will be costly for coal producers, utilities, and the state, according to Wyoming Mining Association Executive Director Travis Deti.
“The state is already losing tens of millions of dollars in tax revenue,” said Deti. “Right now, there is a lot of demand for [Powder River Basin] coal.” Prices are high. And we should have a pretty good production year this year. To say it’s frustrating for the companies that we can’t get rail service to move the coal like we need to move it is an understatement.”
The labor dispute involves 12 unions that are unhappy with their wages, time off, and working conditions. Many rail carriers, including UP and BNSF, had reduced crews prior to the pandemic, in part due to declining demand for Powder River Basin coal. According to Kevin Knutson, a conductor with the BNSF Railway in Gillette, rail carriers have struggled to attract and retain workers, prompting efforts to force more productivity from fewer workers.
President Biden convened a Presidential Emergency Board earlier this year to try to reach an agreement that would either avoid a nationwide strike or provide Congress with a roadmap for imposing a compromise and a return-to-work order.
The PEB proposal, which was finalized in July, would provide union members with a 24% wage increase through 2024, based on 2020 wages, as well as increased health benefits. According to unions, the administration’s proposed agreement does not address several demands regarding “working conditions.”
The PEB agreement established a 30-day “cooling off” period, which expires on Friday, September 16. There were still a couple of holdouts among the 12 unions as of Wednesday, leaving the door open to a nationwide strike.
Despite the possibility of a labor-management agreement or congressional action, rail carriers are securing hazardous commodities that cannot be left on rail lines and warning customers of indefinite delays.
“While these actions are required, they do not guarantee a work stoppage,” Union Pacific Railroad Communications Manager Robynn Tysver said in a prepared statement. “Union Pacific is hopeful for a prompt resolution of the labor agreements so that we can continue to provide rail service to our customers.”
“While President Biden’s Presidential Emergency Board recommendations far exceeded the rail carrier’s proposal, the railroads agreed that we would support agreements based on those recommendations in the interests of all stakeholders involved,” BNSF said in a prepared statement.
Predictions of a prolonged rail industry shutdown, significantly exacerbated supply-chain issues, and economic shockwaves are exaggerated and amount to “propaganda,” according to Knutson. Because the situation is politically volatile, particularly with midterm elections less than two months away, he believes that swift congressional action is almost certain.
“More than likely, Congress will step in and put us back to work based on the recommendations of the [Presidential Emergency Board],” Knutson predicted, adding that a strike would likely last only a few days. “It really is not going to mean anything to anybody,” Knutson said, referring to the general public.
Wyoming Mining Association’s Deti disagrees. Coal mines cannot dig more coal if trains cannot load them. Soda ash and other Wyoming industries that rely on rail transportation face the same logistical challenges.
Although coal-burning utilities typically keep a 30-day supply on hand in case of unforeseen supply disruptions, Deti believes there could be no worse time for a disruption in coal deliveries. Utilities’ coal stockpiles are already below average, and this is the time of year when they typically try to increase stockpiles in preparation for winter demand.