A BNSF Railway coal train is seen departing Helena in July 2022. Credit: Justin Franz / MTFP

Federal regulators have told BNSF Railway it must transport more than 4.2 million tons of coal this year from the Spring Creek Mine in southeast Montana after the mine owner alleged the railroad was giving better service to the mine’s competitors. 

Last week, the U.S. Surface Transportation Board ruled in favor of the Navajo Transitional Energy Company, which earlier this year requested a rare “emergency service” order to force BNSF to move its coal. It’s the latest development in a months-long dispute between the Navajo Nation-owned mine and one of the largest railroad companies in the United States. 

In December, NTEC filed a breach of contract lawsuit in U.S. District Court in Billings against Texas-based BNSF. The company alleged that BNSF’s preferential treatment of other mines caused NTEC to lose more than $150 million in revenue and incur more than $15 million in demurrage penalties in 2022. A demurrage penalty is a fee paid by a company when a ship is not loaded by an agreed-upon deadline. While that lawsuit worked its way through the court system, NTEC went to the Surface Transportation Board, the independent board that oversees the rail industry, seeking relief


Coal company sues BNSF, alleging the railroad gave competitors better service

On Monday, the Navajo Transitional Energy Company filed a breach of contract lawsuit in U.S. District Court in Billings against the Texas-based BNSF. The company alleges that BNSF’s preferential treatment of other mines has caused the company to lose more than $150 million in revenue and incur more than $15 million in demurrage penalties in 2022.

On May 10, the STB held a hearing on NTEC’s request. In filings ahead of the hearing, NTEC argued that BNSF has a “common carrier obligation” to move as much coal as the company can provide. Under federal law, railroads are required to provide transportation or service to anyone or any company “on reasonable request.” But BNSF argued that issuing a service order would be an overreaction and unfair to other customers who rely on the company to move their freight. BNSF blamed its service shortcomings on congestion issues on its network in the Pacific Northwest. 

“Emergency service orders and injunctions are extraordinary remedies, and neither is justified here. More importantly, there is no emergency. There is no threat to a water supply or potential disruption of the food chain, as in other emergency service situations recently addressed by the Board,” attorneys for the railroad wrote in a filing to the STB. 

Ultimately, though, the majority of the five-person STB sided with NTEC. The board issued a preliminary injunction requiring BNSF to transport 4.2 million tons of coal this year from the Spring Creek Mine to Roberts Bank, British Columbia, where the coal will be loaded into ships bound for Asia. In addition, BNSF will need to move another one million tons of coal this year as empty cars and train crews to move it become available. The ruling essentially mandates that BNSF will have to move 23 to 29 coal trains per month from the Spring Creek Mine. The STB is also requiring the railroad and mine to provide weekly updates to the board about how service is improving. 

The STB ruling stated that NTEC’s request was reasonable considering the past level of service the mine received. In 2021, NTEC shipped 5.1 million tons of coal from the Spring Creek Mine, averaging 28.4 trainloads per month. 

“The common carrier obligation is a core tenet of the Board’s regulation of the freight railroad industry and is a pillar of the railroads’ responsibility to our country’s economy,” STB Chairman Martin Oberman said. “Today’s decision reflects the majority’s finding that the common carrier obligation requires a railroad to provide service on a customer’s request that is within the railroad’s capacity to provide … The common carrier duty reflects the well-established principle that railroads ‘are held to a higher standard of responsibility than most private enterprises.’”

The STB also said that because the Spring Creek Mine accounts for a good portion of the Navajo Nation’s annual budget, it is in the public interest that BNSF increase its service. The Navajo Nation created NTEC in 2013 and acquired the Spring Creek Mine in 2019. The energy company usually provides the Navajo Nation with about $50 million annually, about 30% of the nation’s annual budget. 

BNSF did not immediately respond to a request for comment from the Montana Free Press.

One issue that might complicate BNSF’s ability to increase service to the Spring Creek Mine is Saturday’s bridge collapse and derailment at Reed Point. BNSF has often routed coal trains via Montana Rail Link across the southern part of the state, but it is now being forced to divert nearly all of its freight traffic to its main line in the northern part of the state, including coal trains bound for West Coast ports. 


Justin Franz is a freelance writer, photographer and editor based in Whitefish. Originally from Maine, he is a graduate of the University of Montana's School of Journalism and worked for the Flathead Beacon for nine years. His work has appeared in the Washington Post, Seattle Times and New York Times. Find him at justinfranz.com or follow him on Twitter.