NORTH PLATTE, NEB. - Like the circuitry of a computer chip, rails split and parallel into a wide network of track at Union Pacific Railroad's Bailey Yard in North Platte, Neb. From a vantage point midway over a viaduct, Cameron Scott surveyed the slow-moving flow of trains in the system.

He noted three trains loaded with southern Powder River Basin coal. Letter coding on the cars indicated one train was bound for a power plant in Wisconsin; another was headed to a plant in Texas and the other to Arkansas. Scott didn't even try to hide the anxiety on his face as he pointed out that the coal trains, and another "run-through" train, were idling to allow one high-priority "Z-train" through the yard.

"This is a great example of the bottleneck. For us at North Platte, we grind our teeth on this," said Scott, Bailey Yard supervisor.

A major source of the bottleneck originates in Wyoming's southern Powder River Basin where four major coal producers are on pace to scoop more than 350 million tons of coal this year. Although Union Pacific and BNSF Railway doubled their coal export systems out of the region many times over since the 1980s, utility demand for southern Powder River Basin coal has outpaced delivery by about 20 million tons in recent months.

In May, the railroads announced a $200 million expansion of their jointly-owned triple-track route that serves mines in the southern portion of the basin, increasing capacity from about 355 million tons annually now to 400 million tons by 2009. Now the railroads and coal producers say they will continue expansion efforts until sustainable capacity is up to 500 million tons by 2012.

That means total coal exports from the basin would well exceed 550 million tons a 36 percent increase over today's production pace.

"We have to keep that thousand-pound gorilla (coal) moving and fluid," said Scott.

Jeff Maier, assistant vice-president of UP's energy division, said there are proposals for at least 60 new coal plants in the Powder River Basin's customer region throughout the Midwest and Texas. He said that based on utility demand and the projected growth that southern Powder River Basin mines say they can achieve, Union Pacific is dedicated to the multi-million investment. In fact, UP has already spent $7.7 billion to expand capacity system-wide much of that to accommodate coal.

"We are pouring millions billions back into our coal infrastructure," said Maier.

SYSTEM-WIDE EXPANSION

UP and BNSF Railway jointly own the rail line which serves the southern portion of the Powder River Basin from the Caballo mine to the Antelope mine. Work began last year to build several miles of third track along the 100-mile route, and in some areas there will be a fourth track.

But coal isn't the only growing commodity for railroads right now. Traffic volumes for consumer goods are also on the rise. That means railroads can't expand coal delivery without finding operating efficiencies and expanding infrastructure throughout their entire operations, including Union Pacific's Bailey Yard in central Nebraska where 70 percent of the run-through traffic is Powder River Basin coal.

"You have to look at this as a system and not an individual component," said Andy Cebula, vice president of planning and engineering for Canac Rail Services.

Canac is a third-party consultant for BNSF Railway, Union Pacific and four southern Powder River Basin coal producers. All the parties must work in concert with one another to match production with rail delivery and systems operations.

"Everybody's got to play the game together on this one," said Cebula. "To move 150 trains a day on the joint line, that takes tremendous coordination."

Scott said an additional main-line track will be completed at Bailey Yard before year's end to help the flow of run-through traffic. The railroad moved from heavy steel cars to higher-capacity, light-weight aluminum cars in recent years.

Bill Yard will expand from a six-track facility to 12 tracks. A new 70-person over-night lodging facility is also in the works.

The railroad also moved to a configuration of two locomotives on the front and one locomotive on the back of coal trains in order to increase the number of cars to about 130. Now the goal is to grow trains to 150 cars, which means sidings will have to be stretched to accommodate longer trains as will "landing" facilities at rail yards.

The expansion would also increase loadings on the joint-line from about 66 per day to 90 trains per day. Longer, heavier trains means the railroads must increase their maintenance operations. Along with increased traffic, the railroad must work aggressively to hire more workers.

"We are hiring very aggressively for attrition and for coal growth," said Scott.

The retirement rate at UP is currently 40 percent. In addition to treading against that outward flow, the company must also hire an additional 25 workers at its Bailey Yard each month.

"That's a number we have to hit. We cannot miss it, and that goes out to 2010-2011," said Scott.

Energy reporter Dustin Bleizeffer can be reached at (307) 682-3388 or dustin.bleizeffer@casperstartribune.net.