Oil-by-rail traffic hurts farmers, travelers, U.S. officials told

Thu Apr 10, 2014 9:59pm GMT
 

WASHINGTON, April 10 (Reuters) - Midwestern farmers and Amtrak passengers are among those being hurt by rail congestion caused in part by an energy boom that has spurred the massive movement of oil by rail, U.S. officials were told on Thursday.

Rail shipments of oil have been on the rise in regions that lack sufficient pipelines as alternatives, such as North Dakota's Bakken energy patch, where production is nearing 1 million barrels per day and roughly 72 percent of that fuel moves on the tracks.

Rail lines clogged with 100-car trains carrying oil heading to refineries, as well as coal hoppers bound for export terminals, help explain why passengers are often delayed and farm commodities are late to market, witnesses told the Surface Transportation Board, a regulatory agency that arbitrates rail disputes.

"Increased volumes of oil and coal shipments have displaced grain shippers leading to long, expensive delays," said Roger Johnson, president of the National Farmers Union.

Weeks can pass before trains reach grain farmers in Montana and the Dakotas, Johnson said, easily leading to thousands of dollars of losses per farm family.

BNSF Railway Co. and Canadian Pacific Railway Company came in for particular criticism and the carriers acknowledged that they have sometimes failed to provide a reliable link between farmers and markets.

"Let me say we know we have created supply-chain risk for you and fell short of providing the level of service that you expect from BNSF," Steve Bobb, the train operator's marketing chief, told regulators.

An uncommonly severe winter slowed service across much of the Midwest, rail executives said, and some of those problems will be alleviated with the change of seasons.

But Bobb said BNSF must lay more track to serve existing agricultural customers and answer rising demands from the energy sector.   Continued...

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