Tens of thousands of US railway workers in several different unions they are poised to go on strike later this week after a protracted labor dispute. Workers have been unable to reach an agreement with a group of six rail carriers despite months of back-and-forth over issues like stagnant wages, long shifts and the inability to take time off.
Officials in the Biden administration have been racing to mediate between the parties ahead of Friday’s deadline, hoping to avoid a rail strike and shutdown that the Department of Transportation has estimated will happen. costs the economy about $2 billion a day. biden himself convened an Emergency Presidential Meeting two months ago to help oversee the talks, but the board has been unable to help the two sides reach a final resolution. Marty Walsh, the administration’s labor secretary, postponed a planned visit to Ireland this week. help with negotiations.
The looming rail workers’ strike threatens to deal a blow to the economy by disrupting critical supply chains for staples like lumber and wheat. No sector stands to lose as much as the coal industry, which relies almost entirely on the railroads to move its product. A work stoppage could reduce coal stocks that have already been reduced due to poor rail service and high levels of consumption caused by recent volatility in global energy markets. This could lead to electricity shortages and skyrocketing prices in parts of the country that rely on coal.
Coal is by far the more dependent on the railway fossil fuel. Most crude oil and natural gas moves around the country through pipelines, but you can’t put coal in a pipeline, so it has to be moved by trains, trucks, and barges. Because fuel is so heavy and takes up so much space, rail is the only cheap way to transport it from mines to power plants: the average coal train consists of 140 cars, each containing as much coal as it could hold. in ten trucks. Even if coal could be moved onto trucks, the trucking industry itself has also been experiencing labor shortagesand there is not much excess truck capacity to absorb rail transport.
“We are captive shippers,” said John Ward, executive director of the National Coal Shipping Association, a trade group representing coal shippers and buyers. “There really are no alternatives.”
Dependence on the railway industry has proven to be a constraint even before the recent union disputes. Labor shortages in the rail industry have already led to leaner and less reliable rail service, hampering coal producers’ ability to move your products and the reduction of coal reserves in power plants throughout the country. A National Coal Transportation Association survey earlier this year found that about 80 percent of utilities said they had missed coal shipments due to faulty rail service. A prolonged rail closure would fuel that dynamic, forcing coal miners to hold onto more of their product.
“Coal reserves are already at record lows in the United States,” Ward said. “Any further disruption could be disastrous for power generation. In the old days, it wasn’t uncommon for utilities to have a 60 or 90 day supply of fuel, but now I don’t know anyone who has that luxury. If it turns into a prolonged strike, the consequences could be dire.” If utilities burn their reserves, they will have to reduce generation to save supply, which could lead to power outages during times of peak demand. Prices would rise as long as the supply buildup lasted.
The hardest hit places would be states like West Virginia and Missouri, which generate about 90 percent of its electricity from coal and do not have the opportunity to switch to natural gas at short notice. However, even states with large gas supplies will struggle, as Gas markets are also tightt as producers export large amounts of gas to Europe.
The US coal industry has been in decline for decades thanks to a move away from highly polluting, high-carbon fuels and a new abundance of cheap natural gas. Domestic coal consumption has halved since 2005contributing to Decrease of nearly 30 percent in greenhouse gas emissions from the electricity sector during the same period.
But a rebound in energy consumption following the post-pandemic lockdown and Russia’s invasion of Ukraine have brought the industry back to life, causing prices to soar amid a general power shortage. Still, analysts don’t expect the jolt lead to a lot of new production, as the long-term economics of the coal industry remain very poor. An industry trade group expects about 86 gigawatts of coal-fired generation to retire over the next decade — about half of current capacity.