Bill to increase authority of agency overseeing rails

WASHINGTON – The regulatory agency responsible for overseeing the country’s rail network would get more power under a bill proposed Monday by South Dakota Sen. John Thune.

The legislation, which follows months of delays on the rail network in South Dakota, North Dakota and neighboring states, would give the Surface Transportation Board greater authority to conduct investigations and make it easier for the agency to “advance important STB proceedings.”

Thune, the top Republican on the Senate Commerce Committee, introduced the billwith Sen. Jay Rockefeller, D-W.Va., who chairs the panel. The lawmakers said the increased authority will help shippers who depend on the railroads by making the network more competitive and efficient.

“While the Surface Transportation Board has made good faith efforts to address concerns of freight shippers and railroads, the current inefficiencies in the STB’s operations are symptomatic of the need for common-sense reform,” Thune said.

The legislation comes as Canadian Pacific Railway and BNSF Railway, and other railroads, struggle to recover from widespread delays across the region, resulting from a large 2013 harvest, higher coal and oil volumes and the extraordinarily long, cold winter that reduced the size and speed of trains.

The shortage of rail cars left farms in South Dakota with piles of grain on the ground left from last year’s harvest and forced some ethanol plants to scale back production because they had no place to store fuel that normally would already have been shipped.

As farmers gear up for a record corn and soybean harvest this fall, there are concerns that it could take even longer for grain elevators, ethanol producers and other agriculture shippers to receive train cars. The result probably would mean lower prices offered to farmers for corn, soybeans and other commodities.

The issue has caught the attention of the White House.

During a meeting with President Obama and Vice President Joe Biden to discuss a range of issues on Monday, Agriculture Secretary Tom Vilsack said concerns were expressed about whether there is enough capacity on the rail network in the upper Midwest to haul agriculture commodities.

The Agriculture Department has called the rail service issues affecting agricultural shippers a “serious situation.” In a letter to the STB in August, Edward Avalos, USDA’s undersecretary of marketing and regulatory programs, expressed concern with Canadian Pacific’s ability to fulfill an estimated 30,000 requests for rail cars by October, and he said the current rate still would leave a grain backlog for farmers and others who depend on the railroad to move their grain.

“With remaining grain in storage due to the backlog, grain elevators in some locations, such as South Dakota and Minnesota, could run out of storage capacity during the upcoming harvest, requiring grain to be stored on the ground and running the risk of spoiling,” Avalos said. “The projected size of the upcoming harvest creates a high potential for loss in the affected states.”

Thune and other members of the Senate Commerce Committee are scheduled to hold a hearing Wednesday to look at the rail service backlogs and the effect on the U.S. economy. Jerry Cope, a vice president of marketing, Dakota Mill & Grain, Inc. in Rapid City, is among those expected to testify at the hearing.