ARA, TFI Fight Being Railroaded
July 24, 2008 If you shudder to think of the difficulties in transporting fertilizer and other crop inputs without rail, then be assured that your voice is being heard in the nation’s capitol as the issue is debated.
The Agricultural Retailers Association (ARA) and The Fertilizer Institute (TFI) provided testimony before the Surface Transportation Board (STB) regarding railroads’ "Common Carrier" obligation and transport of hazardous materials on Tuesday. This is the second hearing held by the STB on the issue and it provided an opportunity for the two ag industry associations and others to stress both the essential nature of fertilizers.
At issue is the request by railroads to apply another part of the Stagger’s Act in place of the “Common Carrier” obligation. The "Reasonable Request" language of the act would exempt rail carriers from the obligation to transport chemical goods classified as toxic by inhalation (TIH). Already, railroads have started to charge additional fees as a means of encouraging shippers to use other methods of transport.
ARA Chairman Dan Weber, vice president of agronomy for Ceres Solutions, explained the importance of fertilizer and other crop input materials and the valuable role railroads facilitate in transporting agriculture products nationwide, ensuring productivity for retailers’ grower-customers. Ag retailers use railroads as a means to distribute and receive crop inputs, such as anhydrous ammonia, nitrogen, phosphate, and potassium.
"America’s agricultural industry is currently faced with high fuel, fertilizer, and transportation costs," Weber told the STB. "If the railroad is allowed to avoid its ‘Common Carrier’ obligation, the agricultural industry may be stalled in its productive capacity, and the United States will continue to see food and energy prices soar. The current railroad regulatory environment may help to further drive many within agriculture out of business and increase the nation’s dependence on foreign sources of food and fiber."
TFI President Ford B. West also testified about TFI’s efforts to seek a business solution to address the railroads’ concerns about transporting anhydrous ammonia.
Although anhydrous ammonia is transported by several methods including pipeline, barge, truck and ocean vessel, rail transportation is a critical means for shipping the strategic commodity and is also recognized by the Association of American Railroads and TFI as the safest mode for transportation of TIH materials. “One railroad tank car can transport as much ammonia as four trucks,” explained West. “Rail transportation is not only more efficient than trucks; it takes a highly hazardous commodity off our nation’s highways where the potential for accident and public release are many times greater.”
West’s testimony also addressed issues related to the rail industry’s suggestion that the agricultural sector replace anhydrous ammonia with other nitrogen fertilizers, which West pointed out is not realistic because ammonia is a primary ingredient needed to produce other nitrogen and most phosphate fertilizers. In addition, West reminded the STB members of TFI and its member companies’ efforts related to its proposal whereby TFI members would be willing to enter into an agreement with Class I railroads under which shippers would assume part of the cost of excess liability insurance for the rail transportation of anhydrous ammonia.
The proposal, which received praise from STB Chairman Charles Nottingham during the hearing, has facilitated individual meetings between TFI and five of the seven Class I railroads with the final two meetings taking place later this week.
Those testifying on behalf of shipper associations included the National Grain and Feed Association, the Illinois Fertilizer & Chemical Association, CF Industries, The McGregor Co., and Terra Industries.
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