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Obama’s DOT: A Detailed Rail Plan?
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THE INSPECTOR GENERAL (OIG) of the feder- al Department of Transportation believes DOT should hurry up and complete a Na- tional Rail Plan (NRP). The call for the Oba- ma administration to focus its efforts “heav- ily” on the project came in an OIG’s “top ten” recommendations for the entire depart- ment. The purpose of completing the report, according to OIG, is “to provide a framework for the integration of passenger and freight rail across the country so that the public and private stakeholders understand their roles in developing services and can invest with certainty.” Further, the OIG’s office added that NRP should be able to “identify specific interstate corridor goals and measures of success. De- lays in establishing the NRP could result in FRA investing billions of dollars in federal grant funds without assurance that these ef- forts support national policy goals, and stakeholders could remain reluctant to com- mit.” The prod from the OIG’s office comes just as DOT Secretary Ray LaHood is preparing to make his exit after the White House finds a replacement. Surely such a report would have much to
say about such freight rail issues as the im- pact of the natural gas/shale oil fracking boom and passenger rail issues, as a recent Brookings study showing that Amtrak’s huge growth in recent years has come from the short corridors while its long-distance trains have been losing ridership.
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16 APRIL 2013 •
RAILFAN.COM
Speaking of Energy’s Rail Role The nation’s largest railroad (revenue-wise) is preparing to test liquefied natural gas as a locomotive fuel. Citing its low cost, BNSF CEO Matt Rose says that attraction in and of itself could bring his company a decision on that “pretty quickly.” Final word will come in 2014 following six months of testing six locomotives, which is fueling (so to speak) red-hot competition between GE and Caterpillar for the rest of this year. It likely will set the tone for much of the rest of the rail industry. The energy industry-centric newsletter fuel-fix says that the potential shift from diesel to natural gas could be as significant as the 1950s shift from steam/coal to diesel on the rails. Industry observers, including this col-
umn, have been aware for the last two or three years of the serious consideration the railroads are according the idea of switching to natural gas and that cars full of gas — much like the tender cars that used to carry coal for the steam locomotives — will trail the natural gas locomotives. BNSF did some prior testing of natural gas on a small stretch back in the ’80s. CN began its own trial runs for LNG in September .
On the Other Hand…. Just when we think we’ve figured out the path America is taking in the energy market comes word that crude oil prices are about to take a 19 percent nosedive from $92.95 per barrel (as of this writing)to $75 just in the second quarter alone. Furthermore, Andrew
Su, CEO of the Australian commodities bro- kerage firm Compass Global Markets, thinks that plunge could continue for the rest of the year. So if Su is right, how would it affect (if at all) the rail industry’s pondering LNG loco- motion? We’ll see.However, it will be a while before the property is heavily traveled by LNG. One indication of that is that the FRA has selected the state of Illinois to take the lead role of a five-state group hoping to buy new locomotives for $800 million. Purchas- ing by volume usually means saving money. The other four states in the group are Cali- fornia, Michigan, Missouri, and Washington. The total purchase will involve 35 “next gen- eration” diesel locomotives and 130 bi-level rail cars. Illinois and Missouri will accommodate the new equipment as part of their planned improvements to the rail line between Chicago and St. Louis. The project will en- able higher speeds of 110 m.p.h. over 70 per cent of the route by 2015.
Meanwhile, On the Hill The Association of American Railroads Pres- ident Ed Hamberger says the AAR “strongly objects to the Railroad Antitrust Enforce- ment Act.” AAR put its position on the table the same day the measure was introduced by Senators Amy Klobuchar (D-Minn.) and David Vitter (R-La.). The senators claim their legislation would repeal what they de- fine as the freight railroads limited anti- trust exemptions. AAR’s perspective on the bill is that it “singles out railroads for poli- cies that could undermine the industry’s ability to build, maintain, and continuously upgrade the nation’s rail infrastructure without taxpayer assistance.”
The industry fears the bill would create conflicts and uncertainty by in effect over- riding
existing regulatory decisions and
“could potentially roll back government ap- proved transactions in railroad history,” thus creating confusions not only for the railroads, but also for railroad customers and the courts. The Klobuchar-Vitter bill is predicated on the allegation that railroads enjoy an anti-trust immunity not available to other industries In response, AAR recalls the railroads in- vested more than $526 billion in private cap- ital over three decades — half a trillion dol- lars — and also argues that railroads are already subject to most anti-trust laws, and in those areas where there are exemptions, the rail corporations are still regulated by the Surface Transportation Board (STB). Klobuchar, Vitter and several other sena- tors previously (in the last Congress) had written the STB urging the regulatory panel to require railroads serving shippers who are close to another railroad to transport the competing railroad’s cars for a regulated fee; require railroads to provide access to their terminal facilities for a regulated fee; and require that railroads grant competing rail- roads access to their tracks, also for a regu- lated fee.
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