More cars, more lines could make a difference

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Farm Forum

At issue: With more oil being shipped from North Dakota and continued large harvests in South Dakota’s ag sector, the demand for more railcars and better rail service keep increasing. That’s a demand that must be met.

Sen. John Thune was in Sioux Falls on June 29 to discuss, and support, a bill to reform the Surface Transportation Board (STB). The STB is a three-member body with broad economic railroad oversight which allows it to address rail issues, streamline rate case protocol and create a “more robust arbitration process.”

Thune and Florida Democrat Sen. Bill Nelson co-sponsored Senate Bill 808, which would give the STB more regulatory power to initiate rail investigations.

First off, we’re glad to see a bipartisan start to this bill. While we’re sure rail service is important in Florida because of its citrus crops, it’s perhaps even more important to South Dakota. We’re an agricultural state and the ability to move crops that have been harvested and get livestock to market in a timely, efficient and affordable manner is essential.

Unfortunately, that hasn’t always been the case. A harsh winter and new demands from the Bakken Oil Field in North Dakota caused railcar shortages in 2013 and 2014 which resulted in grain piling up at elevators across the state.

During his speech before the South Dakota Corn Growers Association, Thune explained the details of his bill and how it would help the STB do its job better and hopefully prevent problems before they happen.

We hope that’s the case but considering how the federal government has been performing for the past several years and its inability to act in a timely fashion on much of anything, we’re not going to get too excited about Senate Bill 808 just yet.

Don’t get us a wrong. We hope it will do everything Sen. Thune says it will and help shippers avoid the problems they encountered in 2013 and 2014. There are, however, two other things we think that could also address the shipping problem and in a more permanent, efficient fashion.

The first is simply increasing the number of rail cars available. With the continued production in the Bakken Oil Field and the increasing use of rail cars to haul that product, coupled with the continued opposition to the Keystone XL Pipeline, it doesn’t seem likely that the demand for rail cars in the Bakken is going to decrease any time soon.

We realize that railcars aren’t cheap and railroads have to make sure they don’t have more than they need. But if cars can’t be consistently allocated to South Dakota and other ag states during harvest time, then perhaps adding more cars to the existing supply is the answer. The more cars that are filled, the more that are moving goods on rail lines then the more money railroads make.

We realize it’s not just a matter of snapping your fingers and more cars magically appear. But maybe Thune and Nelson can get together with other ag state lawmakers and come up with some kind of incentive program to encourage railroads to add more railcars.

Another positive step would be the upgrade of existing track and the laying of new tracks in areas where there is or likely to be an increasing demand for shipping by rail.

Once again, the Bakken Oil fields are going to keep pumping oil as long as the wells continue to make money. And although a few wells have been shut down, most of them are still pumping and producing oil that will be shipped to refineries.

If more tracks are available, that could make it easier for shippers – providing there are enough available rail cars – to meet the needs of both oil and ag producers.

The bottom line here is after years of being in a declining or stagnant status, the demands for shipping by rail have been increasing, especially with the development of the Bakken Oil Patch. The Dakota, Minnesota & Eastern Railroad saw the need years ago for better rail service when it proposed its historic plan to upgrade and build rail lines to haul coal from the Powder river Basin in Wyoming east. That project failed to become reality but imagine how it could have impacted and improved today’s shipping situation.