WASHINGTON — Today, Bob Dinneen, president and CEO of the Renewable Fuels Association, submitted written testimony to the U.S. Senate Committee on Commerce, Science, and Transportation, which held a hearing to examine rail congestion and the harmful impact it has had on agriculture and other commodities, such as ethanol. Dinneen stressed the role that Bakken Crude rail shipments have played in increasing dwell times and decreasing train speeds and pointed toward the negative impact these delays are having on ethanol producers.
The rail system is a vital asset to the ethanol industry as “…trains have historically served as an economical and efficient ‘virtual pipeline’ for ethanol, safely moving our product from plants concentrated in the Midwest to population centers on both coasts.”
The testimony reads, “The recent crisis of congestion that has seemingly overtaken the rail industry has become a huge and costly problem … This crisis is one that is causing significant harm to the economic health and well-being of our nation’s economy, as well as driving up costs for a wide array of commodities that rely on the rail for transportation.”
Last winter’s Polar Vortex hampered the ability of the railroads to efficiently and effectively deliver their cargo on time, but dwell times and train speeds still have not reached pre-vortex levels, even after the summer months. Dinneen noted, “…the fact that the congestion on the rails has continued well after the end of the past winter season leads one to believe that it has more to do with rail capacity, rail operations and ongoing rail demand, than simply a tough winter.”
He points toward another factor in rail congestion, increased shipments of Bakken oil by rail, stating, “…it is becoming more and more apparent that surging crude oil shipments are coming at the expense of other goods and commodities.”
Grain shipments are expected to increase this fall as America is on course to harvest a record corn crop. With the increase in grain shipments this fall and the current rail congestion, Dinneen stressed that “…rail operators must respond in a way that treats the vast array of other goods and commodities competing with crude oil on the rails fairly and equitably.”
The letter points to two critical components of alleviating rail congestion and ensuring equality in the rail system, noting that “…greater transparency is needed to help regulators oversee and monitor how logistics and contracting decisions are being made by rail operators.” It also notes, “…it is critical that regulators have the ability to oversee what new shipping contracts are being negotiated while the rail operators continue to try to catch up with current customers.”
The full testimony is available here.