Railroads didn’t die. In fact, they will be an increasingly important part of the 21st century transportation of freight and people.
By Jon Talton, October 12, 2014, Seattle Times
When the Penn Central became the largest bankruptcy reorganization to date in 1970, it seemed to plant a headstone on the once-mighty American railroad industry.
The situation was so dire in the Northeast that freight rail service could only be preserved by the creation of Conrail, owned by the federal government.
The Pacific Northwest saw the Milwaukee Road’s Pacific Extension, arguably the best engineered of the transcontinental routes, abandoned in 1980. The rails were mostly ripped up and sold for scrap.
Mergers, abandonments and ’’rationalization” in subsequent years resulted in the loss of tens of thousands of miles of track.
As it turns out, railroads didn’t die. In fact, they will be an increasingly important part of the 21st century transportation of freight and people.
This was underscored by a new report by Philip Romero of the University of Oregon that asserts freight rail contributes at least $28.5 billion to the Washington economy and helps support 342,000 jobs.
He writes, “Freight rail allows Washington to be the path through which trade occurs. For example, trade that passes to and from eight states and four Canadian provinces to Washington allows for a combined regional GDP of nearly $2 trillion.”
To be sure, the Washington Council on International Trade and BNSF Railway commissioned the study. The latter, our dominant railroad, is facing plenty of scrutiny about oil and coal trains. But the report looks solid and prudent in its assessment.
What a change from four decades ago. Now the railroads’ problem is too much demand.
Like almost everyone, they were caught unprepared for the oil-fracking revolution, one happening in places not served by pipelines. According to the federal Surface Transportation Board, railroads carried some 415,000 oil cars last year compared with 9,500 in 2008.
The result has been big bottlenecks for freight and some Amtrak service, including the Seattle-Chicago Empire Builder.
The BNSF runs through the heart of the Bakken formation in North Dakota, the most robust area of fracking. But it also transports farm commodities, containers and other vital freight. Oil volume rose while other freight traffic was also increasing. Problems were exacerbated by a severe winter.
BNSF, owned by Warren Buffett, has committed a record $5 billion to increase capacity, add crews and purchase 500 locomotives. Spokesman Gus Melonas told me the railroad would be spending in Washington on such projects as stabilizing its Seattle-Everett main line against mudslides, double-tracking 17 miles between Spokane and Pasco and hiring 600 employees.
In Bakken, it’s a costly bet. Fracked wells play out much sooner than the conventional wells in places like Texas. This makes it less likely that pipelines will take over all the rail business. The staying power of Bakken is open to question.
Investment by all the nation’s railroads can’t come soon enough. The U.S. Department of Transportation expects an 88 percent increase in demand for rail freight by 2035.
The controversy about oil and coal shipping focuses on the railroads. And indeed there is a push and pull between companies and regulators about how quickly the lines should make the transition to safer, next-generation oil cars.
But in a larger sense, it represents the national cognitive dissonance. We want to reclaim our role as a petro superpower and export oil. We want to continue the happy motoring age. Many want jobs from exporting coal. At the same time, most are concerned about climate change. This is a contradiction that runs from people who drive to anti-oil train protests to the White House.
Another dissonance is that no mode of transportation is cleaner or more fuel-efficient than trains, even as they are being called upon to carry oil and coal that will add to greenhouse gases.
The best solution would be to pay the fossil-fuel companies in the United States and Canada to keep most of their dirty bounty in the ground. Also, implement a carbon tax. Neither is politically likely.
Calls to re-regulate the railroads because of recent capacity problems are questionable. The 1980 Staggers Act is one of the few successful deregulations. While perhaps too many mergers were allowed, re-regulation now would deter needed investment.
In the larger scheme, railroads don’t operate in a vacuum. They are the backbone of an intermodal freight system that includes container ships from Asia and trucks for shorter-distance deliveries. They should become a network for a renewed and expanded passenger rail system.
Officials have yet to think holistically. A Government Accountability Office study urges Congress to develop a national freight strategy that includes effects on communities. But that’s only the beginning of the federal effort that’s needed to ensure movement of goods and people by rail.
Federal action saved the Northeast rail system with Conrail, which was eventually privatized, then sold to the Norfolk Southern and CSX.
It shows how government and the private sector don’t exist in silos. When they work together, it produces great success.