Advocates Push to Expand Freight Rail Infrastructure
Railroads
Bangor Daily News
Vicki Ekstrom
Boston University Washington News Service
3/20/2008
WASHINGTON– Advocating for legislation to increase freight rail infrastructure, State Sen. Dennis Damon, D-Hancock County, co-chairman of Maine’s joint legislative Committee on Transportation, traveled to Washington last week to meet with Maine’s congressional delegation.
As part of “Railroad Day on the Hill,” Damon was joined in Washington by more than 450 rail advocates and members from Go21, a national advocacy group fighting to increase freight rail transportation throughout the country.
With freight rail demand expected to almost double by 2035, Damon asked the Maine delegation to support a 25 percent tax credit for private companies that invest in projects to expand rail systems. The credit used to be in effect but has expired.
“History has demonstrated that when those tax credits were in effect the railroads found it very advantageous to improve the industry,” Damon said in an interview.
But Damon expressed his opposition to a rival set of bills that its sponsors say would restore necessary regulation of the freight rail industry. He said he was not convinced that competition would result from the bills.
In Maine, Damon said, increased infrastructure would potentially allow passenger service to use freight rail tracks when available. He said he hopes that the new incentives would also help to further an expansion plan at the Port of Searsport to help products get to “America’s heartland.”
There are seven freight railroads in Maine, carrying more than 7 million tons of freight per year, according to 2005 data by the Association of American Railroads. Nationwide, rails carried more than 2 billion tons of freight in 2006, bringing in close to $54 billion in revenue.
“The tax credits are important not just to the industry, but to communities all over the country,” said Russell McGurk, vice president of Go21.
Because the demand for freight is predicted to grow 92 percent over the next 27 years and highways continue to be clogged with traffic, shipping freight by rail can benefit the public, McGurk said. The biggest impact would be on traffic congestion. One train can take 280 trucks off the road, according to Freight Rail Works, an advocacy group on rail issues.
There is also an economic benefit, as it costs less in fuel for goods to be transported by trains rather than trucks. A 2003 report by the American Association of State Highway and Transportation Officials estimated shippers would save $25 billion per year. That number is now likely to be even greater as gasoline prices continue to skyrocket. Transporting by rail is also three times more fuel-efficient, and so shipping by train is better for the environment as well, Go21 said, citing Environmental Protection Agency statistics.
Some freight rail customers, however, have expressed concern about the proposed legislation and are pressing for adoption of legislation that would increase federal regulation of the industry.
“It is in our interest to have a healthy and viable freight rail,” said Scott Jensen, spokesman for the American Chemistry Council. “But we need a balanced relationship between railroads and shippers, and the best way to balance that is to improve competition.”
The council and other shippers have endorsed two measures: the Railroad Competition and Service Improvement Act, which is intended to reduce barriers to competition and enforce reasonable prices and efficient service; and the Railroad Antitrust Enforcement Act, which is aimed at restoring competition to a rail industry that has been exempt from antitrust laws.
Jensen said he’s not against the tax credits if that’s what the industry feels it needs, but he fears, he added, that investment will go to improving rails in areas that already have a competitive environment,
Though 75 percent of the rails in the country are competitive, 25 percent of shippers have access to just one railroad. This has caused these “captive shippers” to experience high prices and poor services, said Bob Szabo, executive director for Consumers United for Rail Equity, a coalition of freight rail customers.
Kelly Donley, spokeswoman for the Association of American Railroads, said her group opposes the shipper-endorsed bills.
“It would limit our ability to maintain a vibrant business and expand rail capacity,” Donley said “This is a matter of a small group of shippers who consider themselves captive and want a better rate for themselves at the expense of others.”
Sens. Olympia Snowe, R-Maine, and Susan Collins, R-Maine, along with Rep. Mike Michaud, D-Maine, support tax credits for freight rail companies. Snowe, Collins and Michaud have not taken a position on the antitrust and reform measures because they are still being discussed by their committees.
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