Category Archives: Coal

Oil Trains Causing More Delays for Other Goods and Passengers; Amtrak now late 60% of the time

Repost from The New York Times

As Trains Move Oil Bonanza, Delays Mount for Other Goods and Passengers

By Ron Nixon, October 8, 2014
A Burlington Northern Santa Fe oil train outside Casselton, N.D. The company has committed $5 billion for rail expansion. Credit Dan Koeck for The New York Times

WASHINGTON — An energy boom that has created a sharp increase in rail freight traffic nationwide is causing major delays for Amtrak passenger trains and is holding up the transport of vital consumer and industrial goods, including chemicals, coal and hundreds of thousands of new American cars, rail officials and federal and state regulators say.

American rail lines now move more than a million barrels of oil a day, much of it from the Bakken shale oil field in North Dakota and Montana and from the oil sands of Alberta, Canada. Last year about 415,000 rail cars filled with crude oil moved through the United States, compared with 9,500 in 2008, according to the Surface Transportation Board, a bipartisan body with oversight of the nation’s railroads.

In large part as a result, long-distance Amtrak passenger trains are now late 60 percent of the time, Amtrak officials said, compared with a year ago, when the trains were late 35 percent of the time.

The problems are particularly acute on long-distance passenger lines like the Empire Builder, which shares tracks with freight traffic from Chicago to Portland, Ore., and is late nearly 70 percent of the time. Trains on the 47-hour trip typically run three to five hours behind. Revenue from the line has dropped 18 percent from last year, Amtrak officials said, as word about the sluggish service spread among passengers, most of whom use the Empire Builder for shorter trips between cities on the route.

“Clearly, we’re not getting the level of service that we want to give, or what our customers have been used to getting over the last decade,” said Edward R. Hamberger, president and chief executive of the Association of American Railroads, an industry trade group.

Delays are not as serious for rail service along the Northeast Corridor, where Amtrak owns most of the track between Washington and Boston and has more control over passenger service. On long-distance routes, Amtrak passenger trains run on tracks owned by the major freight railroads.

On the long-distance routes, aging tracks and a shortage of train cars, locomotives and crews have also caused delays, rail officials said. In addition, an improving economy has meant more goods shipped by rail over all. Rail accounts for 40 percent of all goods moved in the country as measured in ton-miles, derived by multiplying a cargo’s weight by the distance shipped. Trucks are second at 28 percent.

A proposed pipeline to move oil from Canada would alleviate some of the rail congestion but would not eliminate it, officials said.

Although North Dakota has been known within the industry for a surge in moving oil by rail, and resulting delays in grain shipments for farmers, rail officials say the congestion and late passenger trains have spread to many other states. On Wednesday, the Surface Transportation Board announced that the nation’s largest railroads must file public weekly reports about their performance, which the board said would give rail customers a better sense of the magnitude of the delays.

The problems are only expected to get worse. American coal exports to countries like China, which are picking up as domestic demand falls, will also compete for space on trains, as new coal export terminals are planned at several ports in the Pacific Northwest. (Increased Asian demand for coal reached record levels in 2012 and continues to be high.) In the United States, a record harvest of corn, soybeans and wheat is expected this year, adding to the stress on the nation’s rail network.

“It’s like having a fire hydrant hooked up to a garden hose,” said Mike Steenhoek, executive director of the Soybean Transportation Coalition in Iowa.

Railroad executives say they are working to unclog the congestion. Michael J. Trevino, a spokesman for the Burlington Northern Santa Fe line, owned by Warren Buffett, said the company had committed $5 billion for rail expansion and track maintenance to help improve its service.

The money includes about $300 million over the next three years to improve capacity and beef up the rail system in North Dakota, which Burlington Northern Santa Fe said would bring 300 more employees to the state and lead to smoother operations and faster deliveries. Mr. Trevino said B.N.S.F. was also making improvements to its tracks in Missouri that carry coal trains coming from Montana and Wyoming.

Thomas L. Lange, a spokesman for Union Pacific Railroad, said the company was buying about 229 new locomotives and hiring about 3,200 additional train crews to help deal with the increase in demand for service.

“We’ve had some delays in our system because demand for freight rail transportation for Union Pacific surged in 2014 to unexpected levels, which we have not seen since 2006,” Mr. Lange said. “We’re upgrading and expanding our system to make sure that at the end of the day, we get the goods delivered.”

A major speed bump in the nation’s rail congestion is Chicago, a transit point for six of the nation’s seven biggest railroads. Nearly half of what is known as intermodal rail traffic — the big steel boxes that can be carried aboard ships, trains or trucks — travels through the city. The congestion in Chicago is also caused by track sharing among freight, Amtrak and commuter trains.

The railroads and local, state and federal officials have committed $3.2 billion for 70 construction projects to replace rail intersections with overpasses and underpasses, in an effort to smooth the flow of traffic for the 1,300 freight and passenger trains that travel through Chicago each day. The project will also separate tracks now shared by freight and passenger trains at critical spots. Officials said about 22 of the projects had been completed.

In total, railroads will spend about $26 billion this year to upgrade the rail network and hire new workers, said Mr. Hamberger of the Association of American Railroads.

Despite the improvements, many industries say they still suffer delays. In April, the auto industry said it had more than 200,000 new cars in storage because of a shortage of trains to move the vehicles.

“Since the summer, we are seeing progress, but automakers are entering the fall with a backlog of new cars to transport by rail,” said Gloria Bergquist, vice president of communications for the Alliance of Automobile Manufacturers, the auto trade group. About 70 percent of new vehicles are moved by rail, according to the group. Industry officials say they are moving more cars by truck as a result of the rail congestion. But trucks are a more expensive method of moving the cars, a cost that may eventually be passed on to customers.

Oregon Approves Subsidy For Oil Transport, Not Coal

Repost from Northwest Public Radio

Oregon Approves Subsidy For Oil Transport, Not Coal

By Tony Schick, August 22, 2014

The Oregon Transportation Commission voted Friday to deny funding for controversial coal exports but approved subsidies that will allow more oil trains to travel along the Columbia River.

The Oregon Transportation Commission Friday voted to deny funding for controversial coal exports but approved subsidies that will allow more oil trains to travel along the Columbia River. Credit McD22 / Flickr
The subsidies were part of a $42 million package of transportation grants using money from the state’s lottery. Only one project was denied: $2 million for the Port of St. Helens to expand a dock for exporting coal.

The coal would have come by train from Wyoming to eastern Oregon, and from there it would have been barged down the Columbia. That project was denied a crucial permit this week, but the transportation commission did approve $5 million for projects that benefit oil by rail.

Regna Merritt of Oregon Physicians for Social Responsibility said she hoped concerns about oil train explosions would have swayed the commission.

“The health and safety issues were taken quite seriously by dozens of elected officials, and we wish that their concerns had been taken more seriously by the commission,” Merritt said.

One grant gives $3 million for improvements on a rail line through Rainier, making it safer and allowing for more oil trains. An additional $2 million will help expand a dock where the oil from North Dakota is transferred onto ships bound for West Coast refineries.

The port said the expansions have long-term benefits beyond shipping fossil fuels.

NTSB final report on 2012 fatal freight train derailment

Repost from The Washington Post

Report on fatal Ellicott City train accident details how a piece of rail snapped

By Ashley Halsey III,  August 23, 2014

Workers stand near one of the coal cars of the derailed train behind the Baltimore & Ohio Railroad Museum: Ellicott City Station on Aug. 21, 2012. (Mark Gail / FOR THE WASHINGTON POST)

They would be college graduates now, poised on the brink of life, had not a train gone off the tracks two years ago in a tragic fateful moment that caught them where they should not have been.

After almost two years of investigation into a 2012 train derailment in Ellicott City, Md., the National Transportation Safety Board said a piece of rail near replacement age simply snapped under the weight of a half-mile-long train carrying 9,873 tons of coal toward the Baltimore docks.

Elizabeth Nass and Rose Mayr, both 19 and celebrating their imminent return to college, were sitting a few feet away on a trestle 20 feet above Main Street. They were buried beneath the spilling coal. Death transformed them into a parable for being in the wrong place at the wrong time, and for the random cruelty of fate. The details played out on the airwaves and in print as far as Australia.

They had tweeted messages and photos to friends from atop the rail bridge as the freight train rumbled toward them just before midnight. One photo showed the tiny shops and bars of Main Street, gone dark deep into Sunday night. Another showing their feet dangling off the bridge came with a one-word exclamation: “Levitating.”

Last month, the parents of the girls spoke out for the first time, releasing a statement through their attorneys saying that the CSX railroad was to blame.

The NTSB report is more meticulous than captivating. It describes details of the accident and gives a broader picture of a freight rail company struggling to stay ahead of deterioration on the oldest stretch of common carrier rail line in the United States.

It describes how the three crew members had the train rolling at 23 mph, just below the acceptable limit, when the emergency brakes slammed it to a halt. They got out to discover that 11 cars had overturned, including eight that had dumped their loads as they toppled into a parking lot below.

As they pieced together sections of shattered rail, investigators could not find five inches of it. “At the point of derailment, the rail fractured,” they said. The board said that “the probable cause of the Ellicott City derailment was a broken rail with evidence of rolling contract fatigue.”

The NTSB report said the railroad was aware of the history of rail defects on that line and of the increased volume of coal tonnage the line was carrying. As a result, the report said, CSX ran ultrasonic tests on the rails 11 to 12 times a year, far more frequently than regulations require. The rail had been tested by federal regulators in July 2012 and by CSX 17 days before the Aug. 20 derailment. “In the area of the derailment, no defects were recorded” by that CSX testing, the NTSB said.

After the accident, some people in Ellicott City said the railroad bridge was a place where underage people went to drink out of sight of others.

Just before they died, Nass tweeted, “Drinking on top of the Ellicott City sign,” a reference to the welcome sign painted on the bridge just below their dangling feet. The underage girls were not heavily inebriated, the NTSB report said. One had a blood alcohol level of 0.05 and the other was at 0.03, both below the limit of 0.08 for driving a car.

“Our daughters did not cause the derailment, CSX did,” Sue Nass, Elizabeth Nass’s mother, said in the statement released by the law firm, which said the families would seek a settlement from CSX. “A rail car should not turn over and kill innocent people.”

The NTSB report said CSX has installed a chain-link fence along the rail line “in an attempt to deter future trespassing.”

Crude by rail causing delays for rail shipments of other goods

Repost from The Wall Street Journal
[Editor: We missed this significant article from last March.  Also on the delays of farming shipments, see the Reuters report of April 15, 2014: Farmers: Oil trains may delay fertilizer shipments.  – R]

Surge in Rail Shipments of Oil Sidetracks Other Industries

Pileups at BNSF Railway Is Causing Delays for Shippers of Goods Ranging From Coal to Sugar
By Betsy Morris, Jacob Bunge and John W. Miller, March 13, 2014
A train carrying crude oil heads west through the small town of Shelby, Mont., in November. A major snarl in railroad traffic is ricocheting through the supply chains of businesses across the U.S. AP

A major snarl in railroad traffic is ricocheting through the supply chains of businesses across the U.S., causing delays and losses for shippers of goods ranging from coal to sugar.

Many of the problems stem from pileups at BNSF Railway Co. in a critical northern stretch of the country where it is shipping crude oil from North Dakota’s booming Bakken Shale region. The railroad, one of the biggest in North America, was already taxed by the heavy demand for oil transport. But its difficulties multiplied when it ran out of locomotives and crew, as a bitter winter forced it to use smaller trains.

That has caused a ripple effect across the country as shipments have been delayed. Deliveries of empty grain cars to farmers and grain elevators in the Midwest and Great Plains are running about two to three weeks late, the railroad says. The chief of a major sugar producer said he likes to load 50 railcars a day this time of year, but BNSF sometimes brings more than 50 and sometimes 30.

An executive close to big utility companies says coal-fired power plant inventories are running much lower than the usual 30 days. “The railroads tell us they aren’t serving power plants until their inventories are in single-digit days,” he said.

BNSF isn’t the only railroad with capacity problems, but its woes have been aggravated by a big grain harvest and its surging crude business.

The railroad knew it was in trouble when winter hit. “We found ourselves behind the curve,” said Bob Lease, vice president, service design and performance, for BNSF. “Now, we are finding we can’t fill all of the demand” as quickly as usual.

The backlogs could wind up costing shippers hundreds of millions of dollars, says Steve Sharp, president of Consumers United for Rail Equity, a group representing agriculture companies, manufacturers and utilities. His group has been pushing for tougher railroad regulation.

Andrew Walmsley, director of congressional relations for the American Farm Bureau Federation, a trade group for farmers, worries that continued capacity problems could hurt U.S. competitiveness in the world arena. “Our reliability as a trading partner comes into question anytime we can’t provide the most cost-competitive price in a predictable and timely manner,” he said.

BNSF is scrambling. The railroad is leasing and buying locomotives by the hundreds and hiring new crews. In mid-February it began building new track on top of frozen snow-covered ground along its main oil-patch route. It normally wouldn’t have attempted such a project until spring.

Mr. Lease says traffic should become more “normalized” by April 1, but he concedes that the railroad’s challenges will extend through 2014. “It takes a while to unravel,” he said.

BNSF, a unit of Warren Buffett’s  Berkshire Hathaway Inc.,  BRKB +1.19%     invented the business of carrying crude oil by rail when it launched its first long oil train, essentially a rolling pipeline, in 2009. The business has sharply exceeded its expectations. Shipments of crude by rail from North Dakota rocketed to a peak of 800,000 barrels a day last October from fewer than 100,000 barrels a day in 2010.

The surge has contributed to a tangle with potentially widespread impact. Larry Stranghoener, chief financial officer of fertilizer maker  Mosaic Co.  MOS +0.73%     , says that transport problems, including the crunch in railroad capacity, could spell “a slower season.”

“The primary preoccupation of our sales force, our supply chain and our customers frankly is getting product to them in time for the spring season,” he told the Minneapolis-area company’s investors Wednesday. Any delays transporting Mosaic’s fertilizer to dealers could cause them to defer additional orders, he said.

Some shippers, eager to move their products, have opted to use trucks. Trucking rates compare with rail costs within a 500-mile radius, but beyond that companies can wind up paying four to five times as much on a per-ton basis, says one shipping official.

At Black Gold Farms, based in Grand Forks, N.D., Chief Executive Gregg Halverson says his company has had to pay more to hire trucks to transport its potatoes, which it sells to chip makers.

“There’s more demand for truck transportation, and that hits us between the eyes,” Mr. Halverson said. “It’s not only the actual availability of the trucks, but trucking firms having trouble getting drivers, because of demand from the oil patch.” He declined to estimate how much more he is paying for trucks.

American Crystal Sugar Co., which says it supplies about 15% of the nation’s sugar, had to slow production at three of its five plants for 11 days in mid-February because it was running out of storage space while waiting for trains to ship its sugar to food companies. That has disrupted the Moorhead, Minn.-based cooperative’s just-in-time delivery system, said David Berg, its chief executive. “The railroad just threw that into complete chaos,” he said.

He said delays in outbound shipments of sugar have interfered with the production schedules of American Crystal’s customers, many of them major food manufacturers.

While he said he wasn’t aware of any food companies that have had to halt production, “They’ve been running on fumes for weeks,” he said. “We’ve been humping trucks all over the U.S. to keep people in supply.” American Crystal supplies  General Mills Inc.,  GIS +1.27%      Kraft Foods Group Inc.,  KRFT +1.30%     Nestlé SA, Mars Inc. and  Kellogg Co.  K +1.09%     , among others.

Mr. Berg and Perry Cerminara, director of global sweetener and energy-risk management at  Hershey Co.  HSY +0.07%     , called the problems caused by BNSF “serious” in a March 4 letter to regulators and stressed the “urgent” need to fix them. Mr. Cerminara wrote on behalf of the Sweetener Users Association, representing food manufacturers.

A spokesman for BNSF said it is working with customers individually to address their most critical issues and plans record spending on expansion this year.

Utilities are hoping railroads can improve their capacity before the busy summer season. “We try to build up inventories to around 40 days, so we’re counting on spring,” said one official at a coal-fired power plant. But, he added, “We’re not counting on a magic bullet.”

—Tony C. Dreibus, Annie Gasparro, Chester Dawson, David George-Cosh and Laura Stevens contributed to this article.