Dive Brief:
- Wary of dwindling coal stocks and and struggling to find rail cars to reliably transport the fuel, some utilities are choosing to generate power with natural gas even though it is currently less economical.
- Last winter's Polar Vortex left many utilities' coal inventory sparse, and Bloomberg reports that July coal supplies for utilities stood at just over 125 million tons, the lowest July inventory since 2004.
- The price for coal coming out of the Powder River Basin has dropped about 8% this year as utilities struggle to find methods of transport it out of a region where other commodities are competing for the same rail space.
Dive Insight:
In today's hyper-integrated world of commerce, a bumper grain crop means some utilities are burning natural gas instead of coal.
Coal coming out of the Powder River Basin is having trouble finding space on rail cars, as a hefty grain crop and Bakken oil are also competing for the same transport options. Utilities are worried about having enough coal to make it through the winter, as supplies are still low following the Polar Vortex that spiked January demand earlier this year.
Bloomberg reported on the issue and examined train speeds and wait times. According to the news organization's analysis, train speeds are the slowest in five years and cars are sitting idle for the longest times since 2008.