Ag Policy Blog

Senate Committee Passes Railroad Regulatory Bill

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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The Senate Commerce Committee took some action Wednesday to give more authority to the Surface Transportation Board to react to railroad delays that have plagued the upper Plains.

The Surface Transportation Board Reauthorization Act (S. 2777) by Commerce Chairman John Rockefeller, D-W.V., and committee Ranking Member John Thune, R-S.D., unanimously passed the committee. According to a news release from Thune's office, the bill would give the board more authority to work on rate disputes and service complaints.

“I am pleased the committee was able to work together to pass these common-sense improvements to the STB,” said Thune. “While there is more work to be done to address the concerns that agriculture producers and other shippers face, providing targeted improvements to the STB ensures that it functions as the regulatory body that Congress envisioned, while not stifling the railroads with additional regulations that can reduce infrastructure investment.”

Rail has become a chronic problem for grain elevators in the Plains and Midwest, leading to multiple hearings by the STB this year both in Washington and in the field, such as the recent hearing in Fargo, N.D. Farmers and grain elevators have complained about months-long delays getting grain cars. Thune moved quickly following the hearing to hold a Senate committee hearing and introduce legislation to deal with the problems.

The Association of American Railroads isn't happy about it. The AAR complained the bill "would harm the nation's railroads’ ability to move what the economy demands and deliver the service shippers expect. The railroad industry would not be able to continue to reinvest record amounts of private capital into the freight rail system if the STB Reauthorization Bill passes in its current form."

According to Edward Hamberger, president and CEP of the railroad group, the bill would cause STB to potentially cap rates and force railroads to allow competitors to use their lines.

"The rail industry believes this legislation will harm the ability of the nation’s railroads to invest in the network and improve service for our shippers,” Hamberger said. “These new restrictive regulations would be imposed on the nation’s railroads at a time when investments in capacity, new equipment and new hires are needed.”

At this point, it's unclear when Senate Majority Leader Harry Reid, D-Nev., could bring the bill to the floor. Moreover, there is no companion bill comparable to the Senate legislation. It's unlikely the House would consider any action on such a bill before a lame-duck session. The House will be in session only four more days between Friday and Election Day.

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SD Farmer
9/19/2014 | 11:00 AM CDT
The FSA has a program with a low interest loan (2.5%) for seven years to build grain storage and handling facilities. I always find it interesting that those who scream for free thinking and tolerance, seem to be the least tolerant of all.
Bonnie Dukowitz
9/19/2014 | 9:30 AM CDT
Try USDA's website, Don, along with public comment period several years ago. Try newspaper archives, union news,etc. History is very educational if one can read without a predetermined , uneducated, biased opinion. Rep. Collin Peterson was a major player and author of the legislation. Even at that time the infrastructure of the nation was very inadequate. The development of the unit grain trains was one positive result in that timeframe. Take a look, the river system is running neck and neck with the R.R. for failure. Unless you make your boat out of birch bark and chew your skins to make leather, you are part of the problem.
Jason Billenstein
9/19/2014 | 9:13 AM CDT
The irony in this, who was it that repeatedly blocked the keystone pipeline? Now the oil is being moved by trucks and railroads instead of the more efficient, more environmentally friendly and safer method of a pipeline. Pretty obvious who to blame for this one.
9/19/2014 | 8:30 AM CDT
Once again Jay is out stereotyping, something he hates when people do it against his idea of a dream world. And remember that the majority of Obamas stimulus money was channeled into enhancing government employees and more was sent to universities than went into re-building the infrastructure. You can be mad at congress for not doing the right thing but didn't the Democrats hold both the House and Senate when the stimulus money was being doled out?
Jay Mcginnis
9/19/2014 | 7:29 AM CDT
Hey Don, I don't think Bonnie is making it up, you need to listen to Rush Limbo and the other hate radio hosts to understand that they just blame every negative thing on the president and open minded thinkers. If you listen to them you will also understand that your solar installation won't work, better you stick with dirty old coal and oil so the Koch brothers make some more billions. If they aren't raking in trillions Walmart and McDonalds won't be able to pay their help $7/hr and the economy will collapse! I hope you think of that when your solar panels are producing years of free kilowatts and you better feel guilt and remorse for your part in promoting socialism. Electric companies in my state are trying to limit the amount solar producers are paid for, that any extra you produce belongs to them to sell, pure capitalism right? Anyhow our decaying infrastructure is our own fault and the amount we pay to defend Mideast oil interests way outweigh what we put into infrastructure. Wait,,, didn't Obama want to invest stimulus money in infrastructure and the Congress shoot it down???? No to infrastructure but yes to any war against any country for any reason.
Don Thompson
9/19/2014 | 6:52 AM CDT
Bonnie, Please cite evidence for your claims. I fear you are making things up again,
Bonnie Dukowitz
9/19/2014 | 5:58 AM CDT
FSA's facility loan program was developed and enacted to even out the transportation problem years ago. Problem is, the Eviro's have all but halted transportation expansion capabilities of commodities and minerals.
SD Farmer
9/18/2014 | 11:14 PM CDT
There is plenty of storage in North and South Dakota. Many farmers have enough storage for At Least a full years production, if not more. Plus many are building an extra 80,000+ bushels of storage this year. I find it a little naive to blame this on merchants and farmers when almost any geographical area would have a hard time storing two years worth of production. Basis levels are already $-0.90 to $-0.99 for corn and harvest hasn't even started.
Raymond Simpkins
9/18/2014 | 9:50 AM CDT
Who knew they would ever grow crops in North and South Dakota.Buy more trucks I guess.
David Kessler
9/18/2014 | 9:29 AM CDT
I hope we don't go down a path of re-regulating the railroads. Why do we expect the railroads to have anticipated two record crop years in a row plus bountiful new oil production and then build infrastructure so they could handle the surge in volume? Turning the question around on the agriculture industry, why didn't farmers and grain merchants realize the potential for this to happen five years ago and build enough storage to handle the surge? The only way to make sure new capacity of either storage or transportation will be built is to allow the markets to work. Either transportation rates have to go up enough to entice the creation of new capacity, or basis has to move to a level that entices farmers and grain merchants to increase storage. I realize this doesn't do much to help the immediate situation, but re-regulating the railroads won't help in the short or long term. We have forgotten what happened in the 70's when regulation stifled investment.
Bonnie Dukowitz
9/18/2014 | 5:35 AM CDT
Just what is needed: The government expediting the R.R.s. How about the government expediting a couple of pipeline construction projects? Build all the railcars and tracks you want, there will still be congestion. One accident on a freeway and everything stops.