Freight Feast

Coal, oil and wheat can bind the rail system

Wednesday, February 26, 2014

A potentially serious case of railway indigestion appeared this week to complicate the tangled prognoses for the proposed coal port at Cherry Point. The most acute sore spot is east of Spokane but seemed certain to radiate to Bellingham and beyond.

In dueling news conferences within the past few days, Montana interests told Bellingham reporters how the proposed Gateway Pacific Terminal could (1) improve or (2) devastate the health of Montana’s huge wheat and barley industry.

The disagreement centers on farmers’ ability to ship their grain to Asia through Northwest ports. A delegation including the heads of the Montana Chamber of Commerce and Montana Farm Bureau came to Bellingham with a strong endorsement of the GPT. (It was a grain terminal before it was a coal terminal.) Its proposed design provides for shipping six million tons of grain per year to Asian buyers, as well as 48 million tons of Montana and Wyoming coal. The Montana interests say GPT would offer healthy competition for the business of shipping Montana grain, which now reaches Asia by way of Columbia River ports.

But a few days later, researchers for the Western Organization of Resource Councils of Billings told reporters that the new coal terminals in Washington and Oregon will harm, not help, their huge wheat and barley business. Their organization, heavily supported by grain growers, says farmers can’t compete for track space and locomotive power, against a dominant coal industry freighting millions of tons to Cherry Point. The traffic jam will be greatly aggravated, they believe, by a dramatic surge in oil trains headed for refineries at Cherry Point and Anacortes.

WORC has published a study extrapolating from industry data for current and projected train traffic in a 70-mile stretch of railway east of Spokane. Currently, 50 trains a day pass through that stretch to enter the city. In the next decade, WORC says, as many as 82 additional trains carrying coal and oil to Northwest terminals and refineries and returning empty, will create monumental railroad blues. The study predicts a dramatic spike in coal exports by 2023, from Montana and Wyoming. Some 11.8 million tons were exported westward last year at an average of seven trains per day, all of it through Canadian ports. Ten years from now, with Cherry Point and other new coal ports operating, WORC says coal exports could reach 170 million tons—52-62 train loads—if all the proposed new and expanded coal ports were to be approved.

Public opposition and unprecedented scrutiny of environmental impacts seem likely to discourage some port developers and reduce the grand plans of others. But if even half the proposed port capacity were to operate, freight volumes would require logistical genius and luck to avoid gridlock. Especially so when a surge in oil trains is added to the feast, hauling Baaken crude from North Dakota to refineries at Cherry Point, Anacortes, and Vancouver, Wash.

Those could total as many as 12 trains per day, the WORC study says.

Oil, coal and grain trains are so-called “unit trains” carrying a single commodity; it’s normal for one to occupy a mile and a quarter of track. The profit margin for hauling long trains with a single commodity to a single destination is greater than mixed freight to multiple destinations, the study authors say, and profits drive corporate decisions.

Burlington Northern Santa Fe spokesperson Courtney Wallace disputes WORC’s numbers.

“For one thing, they don’t consider market demand. The volume of any commodity being shipped is always subject to the market. It isn’t steady and isn’t always predictable.”

At any rate, Wallace says, BNSF will be ready for the boom.

“We’ll be investing $5 billion dollars in 2014 for expansion, maintenance and new technology throughout our system. Nine hundred million of that will be spend on the Northern Corridor [the route of concern for the coal, oil and grain shippers].”
As though the coal/oil/grain stew weren’t complex enough, there’s growing concern over the explosive danger of rail cars carrying volatile Baaken crude oil through cities along the BNSF routes. Second District U.S. Rep. Rick Larsen met with Bellingham and Whatcom County officials last week to consider the problem. Larsen said he’s doing what he can to prod federal agencies toward tighter regulations, but the volume will far outpace any safety upgrades.

Larsen said 400,000 carloads of crude oil went down the tracks in the U.S. last year, 20 times more than five years earlier. Of those, 92,000 cars don’t meet current standards for resisting puncture and need to be replaced.

“You have big companies arguing with big companies over how to do this right,” Larsen told the Bellingham Herald.

Meanwhile, there was crusty reaction from the direction of the coal mines to planned environmental studies of the Cherry Point coal port proposal. The Washington Department of Ecology study is expected to step on political toes across state lines, in studying the impact of the coal transport boom throughout the Northwest.

Yellowstone County, Montana Commissioner John Ostlund told reporters in Bellingham that the Washington Department of Ecology has no business studying air pollution and rail traffic conditions in Montana.

“They don’t deserve to be making decisions regarding our ability to ship our goods,” he said.

And in Cheyenne, Wyoming state legislators set aside half a million dollars for a legal war chest in case they decide to sue the state of Washington to “protect” Wyoming’s access to deep water ports (read: Cherry Point). House Appropriations chair Steve Harshman warned against “sister states” (read: Washington) who would “violate the interstate commerce clause of the U.S. Constitution.”

“This is very important,” Harshman said. “We’re going to fight for it.”

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