Potential Railroad Worker Strike In U.S. Looms As Threat To Coal Deliveries For Power Plants

A potential railroad worker strike that could occur as early as this week threatens to disrupt the delivery of coal supplies to power plants.

[EDITOR'S NOTE: A tentative agreement to avert a strike was announced in the early morning hours of Thursday by the White House].

A national railroad strike “could derail critical deliveries of chlorine to wastewater treatment plants and coal to utility plants, among other potentially crippling disruptions, prompting senior White House aides on Tuesday to review contingency options for protecting the nation’s drinking water and energy supply,” the Washington Post reported on Sept. 13.

“We strongly encourage resolution,” said Rich Nolan, President and CEO of the National Mining Association (NMA), in a Sept. 12 statement.

“A rail strike could create a debilitating logistics chokepoint for the movement of energy and materials resources essential to our grid reliability and energy affordability, as well as our manufacturing sector and the energy security of our allies. Ongoing service issues continue to threaten coal deliveries, impeding the delivery of essential fuel as utilities work to shield consumers from soaring natural gas prices and build up stockpiles to ensure they have the fuel security needed for the winter,” he said.

Reuters reported on Sept. 13 that U.S. natural gas futures “edged up to a fresh a one-week high on Tuesday on worries a possible railroad strike could threaten coal supplies to power plants, which could force generators to burn more gas to produce electricity.”

The Washington Post further reported that President Biden was briefed on the matter this week, “after he called the carriers and unions on Monday to press them to accept a deal, a White House official said. Senior officials at the White House are now leading daily meetings with the Departments of Agriculture, Transportation and Energy and other top agencies about how to mitigate the impact,” the newspaper reported.

On Sept. 12, Senator Richard Burr (R-NC), Ranking Member of the Senate Health, Education, Labor and Pensions (HELP) Committee, and Senator Roger Wicker (R-MS), Ranking Member of the Senate Commerce, Science, and Transportation Committee, introduced a resolution aimed at preventing a rail worker strike if contract negotiations are not soon resolved.

The Senate resolution would adopt recommendations made by President Biden’s appointees to the Presidential Emergency Board (PEB), which include significant wage rate increases for workers retroactive to 2020.

Since 2019, the railroad industry and rail unions have been engaged in negotiations for a new contract, failing to produce an agreement, Burr’s office said. In July 2022, following the process established by the Railway Labor Act, President Biden appointed a PEB to investigate the dispute and make recommendations.

In August 2022, the PEB released its recommendations, which were endorsed by the White House. The recommendations proposed a 24 percent wage increase, plus $1,000 annual bonuses, to be applied retroactively dating to 2020, as well as increased health care and other benefits. Eight of the 12 unions agreed to the recommendations; however, four remaining unions have not.

If the parties have not reached a tentative agreement by September 16, the rail unions could engage in strike activities, according to Burr’s office.

In 2021 alone, U.S. railroads moved 3.3 million carloads of coal, with each rail car carrying enough coal to power 19 homes for an entire year, according to the Association of American Railroads.