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Energy via Rail: A Multifaceted Dilemma

July 03, 2014 By Conrad deFiebre, Transportation Fellow

In Benson, the western Minnesota city that has ticketed BNSF Railway for its trains blocking street access for emergency services, local merchants wrote a letter to the editor of the Swift County Monitor complaining about the railway "interrupting commerce." It seems teams of horses weren't able to get through. The letter was dated 1887.

Rob Wolfington, Benson's current city manager, keeps a copy of the letter in his desk to lend perspective to the latest controversy, which landed the city and BNSF in court last month. Swift County District Judge Donald M. Spilseth took the matter of multiple traffic citations issued by Benson's constabulary under advisement. He is expected to rule by summer's end on the railway's pleas of immunity from state traffic statutes under interstate commerce doctrines.

"It's an ongoing problem," Wolfington said in a telephone interview. "We have unique geography with the railroad and three state highways intersecting in the center of town. We depend mightily on the railroad, but we also have an obligation to protect public safety."

Under state law, trains aren't supposed to block crossings for more than 10 minutes at a time. But with increased main line train traffic adding to that serving Benson's ethanol plant, coal-fired power plant, grain elevator and propane distributor, congestion on the tracks has stretched delays to as much as 45 minutes. And that cuts off the police department, fire station and hospital on one side the tracks from the sheriff's office, nursing home and ambulance service on the other. 

BNSF has refused to pay traffic fines of more than $1,000 so far, and the case could drag on through appeals. Meanwhile, the city has launched a $20,000 study of options for reducing the backups at three downtown rail crossings.

Benson's dilemma is an offbeat microcosm of the challenges arising across Minnesota and the rest of the nation from a new boom in the freight railroad business. Attention has focused on increased rail shipments of volatile crude oil from North Dakota -- with particularly heavy impacts in Minnesota as tank cars fan out for 1,600-mile average journeys to distant refineries -- although oil still accounts for only 1.6 percent of U.S. railroad loadings despite a 40-fold increase since 2008.

In April, however, U.S. oil production hit a 26-year high of 8.3 million barrels daily as North Dakota topped 1 million a day for the first time. The U.S. Department of Energy expects nearly another million barrels a day to be added nationwide next year. Given that pipelines are at full capacity and face strong environmental opposition to expansion, it's likely that virtually all of the new production will move by rail for years to come. 

In 2014's first quarter alone, a record 110,164 carloads of crude oil were delivered by U.S. railroads. That's more than 1,000 unit trains, averaging 12 a day. If the predicted additional crude ships by rail, the number could nearly double within a year.

And that's not all. With the oil boom has come a glut of undeliverable natural gas, more than $1 billion worth burned off each year at wellheads for lack of processing plants or pipelines. A third of North Dakota's gas currently is "flared," an economic and environmental waste. In response, the energy industry is looking into ways to put the gas on trains, too.

Railroads "make a lot of money transporting oil, so it would make sense" to haul gas as well, an executive of one of the tech companies considering research into ways to do it told Reuters.  The solution would involve new million-dollar tank cars to transport liquefied natural gas (LNG) that must pass stiff regulatory muster. Railroads and the Federal Railroad Administration have formed a task force to establish standards, but no timetable has been set for completing the work.

Meanwhile, BNSF is testing tank cars for LNG and locomotives powered by it, an LNG tanker is being developed in Germany by a U.S.-German partnership and LNG has been transported in tanks loaded on rail cars in Japan since 2000. More volatile fuels such as ethylene and propane already travel by U.S. rail, but energy experts expect certification for LNG trains to go very slowly in the wake of recent fiery explosions of crude oil trains.

"I can only imagine the amount of pushback we're going to have on transporting gas by rail," Breitling Energy Corp. CEO Chris Faulkner told Reuters. "The discussion isn't about safety and fact, it's about fear."

That's debatable, of course. It's surely in the industry's interest to downplay safety risks of the nation's energy boom, as illustrated by an assertion from two trade associations that North Dakota's Bakken Shale crude is no more flammable than other grades moving by rail.

Maybe so, but that's hardly a persuasive defense of the Bakken traffic, according to Christopher Hart, acting chairman of the National Transportation Safety Board. He noted recent derailments of tar sands crude oil from Canada in Minnesota and other places that damaged the environment and had the potential for deadly fires. 

"Accidents involving crude oil or flammable liquids of any kind, especially when these liquids are transported in large volumes, such as in unit trains or blocks of tank cars, can have disastrous consequences," Hart wrote in a letter to two U.S. senators last month. 

Naturally, the railroads seek to minimize such worries as they argue against proposed new rules for oil trains such as a 30 m.p.h. speed limit, better brakes and stricter requirements for crews to stay on board. According to a fascinating report by Politico,  the carriers opposed the latter two ideas on economic grounds and the lower speed limit as a recipe for greatly increased congestion on the tracks. Even Amtrak weighed in on that issue, saying it could slow its Chicago-Pacific Northwest Empire Builder passenger service through Minnesota by two hours.

And that certainly wouldn't ease the tie-ups in Benson, either. Clearly, there's a complicated balance to be struck among the economic benefits of home-grown energy, its long-term environmental risks and its very real threats to public safety -- even when the trains don't crash. As long as black gold and gas from deep underground keep fueling our lives across the nation, it might make more sense in financial, ecological and hazard reduction terms to transport them below ground, too. 

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