BNSF Railway's total coal tonnage is expected to exceed 290 million short tons
in 2007, as mines in the Powder River Basin are off to "a great start in the
fourth quarter," a railroad official told analysts during a third-quarter
conference call.

Significant flooding and washouts in the Midwest affected BNSF's coal traffic
early in Q3, and while operations "rebounded quickly," PRB mines kept the
railroad from significantly increasing shipments out of the basin during the
remainder of the quarter, said John Lanigan, executive vice president and
chief marketing officer. BNSF loaded a total of 228.2 million st through
October 15, an increase of almost 2% over the 2006 year-to-date total of 224.5
million st.

"Utility forecasts continue to indicate higher demand than what the mines are
producing," Lanigan said, but he added that the railroad has seen improvement
in mine loadings in recent weeks. Demand for PRB coal is strong, he said,
noting that the PRB burn is up 5% year-to-date over the 2006 period.

Lanigan also said the railroad is focusing on improving the efficiency of its
coal operations, which includes replacing some of the older steel railcars
with aluminum railcars that are lighter and more efficient.

BNSF's coal revenues were up 14% to $849 million in Q3, and the results
included "a net increase in revenues of $14 million as a result of
developments in several coal rate disputes." Last September, the Surface
Transportation Board ruled in favor of BNSF Railway in two coal rate cases,
rejecting arguments from AEP Texas North and the Western Fuels Association
that the railroad has been charging them unreasonably high rates for PRB coal
deliveries (PCT 9/12).

Coal revenue up, loadings flat

Year to date, coal revenue was up 11% to almost $2.4 billion, compared with
$2.1 billion in the year-ago quarter.

Coal loadings were almost flat in Q3, increasing just 0.2% to 627,000 carloads
in the quarter, compared with the year-ago period's 628,000 carloads.

--Marcin Skomial, marcin_skomial@platts.com