July 7, 2014
By Christopher Doering
The ethanol industry Monday urged a federal regulator overseeing the nation's railroads to provide relief for shippers of the renewable fuel who have faced delays.
Growth Energy, which represents ethanol manufacturers, told the Surface Transportation Board that producers of the renewable fuel should be given the same relief that the agency provided to grain shippers in June.
Last month, the STB ordered Canadian Pacific Railway and BNSF Railway to provide the agency an update on their plans to reduce the backlog of grain cars across their networks -- a step welcomed by agricultural groups concerned that farmers could struggle to get their crops to market this fall.
In a letter sent Monday to the STB, Tom Buis, chief executive with Growth Energy, said with more than 61 percent of all ethanol delivered by rail, it is "imperative that these issues be directly addressed and given the same priority as grain shipments."
Buis said immediate action was necessary to "ensure that railroads improve their service." Ethanol supplies were squeezed and prices soared earlier this year, he noted, because of the inability to get rail cars to ship their product. Many ethanol producers were forced to reduce production because they had no place to store the fuel.
Dennis Watson, a spokesman with the STB, said the agency had received the letter but had no comment on it. The agency, he said, is constantly reviewing all commodities shipped by train and the service the rail companies are providing.
In recent months, BNSF and Canadian Pacific have come under fire from shippers, Washington lawmakers and the STB itself for shortages and delays in delivering rail cars to farmers, ethanol plants and grain elevator operators. The rail system in much of the western Corn Belt has been slowed by a plentiful 2013 harvest, higher coal and oil volumes, and the extraordinarily long, cold winter that reduced the size and speed of trains that operated.
Ethanol cannot be shipped through gasoline pipelines because of its corrosive properties, leaving movement of the flammable liquid to trains and trucks, often through densely populated residential areas. As ethanol production has grown, more of it must be shipped outside of the Midwest where much of it is produced, forcing makers of the renewable fuel to depend more heavily on railroads.
The corn-based fuel is a small but growing commodity for railroads, with ethanol shipments commanding just over 1 percent of total carloads moved by train annually, according to the STB. In 2011, 32 percent of U.S. ethanol shipments originated from Iowa, the country's biggest producer of the corn-based fuel.
Read the original story here : Ethanol Industry Asks For Relief From Rail Delays