By TIM ALEXANDER
Illinois Correspondent

BLOOMINGTON, Ill. — The Illinois Fertilizer & Chemical Assoc. (IFCA) joined The Fertilizer Institute (TFI) and makers and shippers of anhydrous ammonia and other toxic-by-inhalation (TIH) materials in Washington, D.C., on July 22 to testify in front of the Surface Transportation Board (STB).

IFCA President Jean Payne represented the interests of Illinois ag retailers upset that the U.S. railroad industry has asked the STB to relieve it of its common carrier obligation pertaining to transporting ammonia and other TIH products, such as chlorine.

The STB has indicated it will issue a ruling by the end of the year as to the American Assoc. of Railroads’ and other rail groups’ request to require the fertilizer industry to pick up 100 percent of the railroads’ liability insurance costs for transporting products Payne said are crucial not only to Midwest agriculture, but to nearly every U.S. municipality.

“We in Illinois use about 750,000 tons of anhydrous ammonia each year for agriculture, with about 75,000 tons, or 10 percent, transported by rail,” putting the state neck and neck with Iowa as leaders of ammonia use, Payne told Farm World. “I presented to the STB how important it is to us to have the rail option. (Rail) takes the pressure off the pipeline and distribution system.”

Last fall, Illinois ag retailers and farmers faced a near-crisis when ammonia terminals, fed by pipeline and barge, ran dry.

“We literally could not get enough product through those terminals to meet demand,” Payne said. “We need, and have to have, rail transport.”
Railroads are citing increased public safety awareness as a reason to banish rail service for TIH materials – or at least make the industries pay their insurance costs. They point to three rail incidents in recent years that resulted in chlorine and ammonia leaks as evidence that the substances are unsafe to transport by rail. Fault for the incidents, however, fell with railroad personnel and track maintenance problems, Payne said.

“In all three cases, the National Transportation Safety Board ruled the railroad had erred, but they still want the fertilizer industry to pay for all their liability insurance to carry ammonia. If the railroad had an accident (carrying TIH materials) they would carry no responsibility at all and we would have to pay 100 percent of the costs,” Payne said.

The IFCA, also represented at the hearing by six board members and legislative committee chair Mark Powell, maintains that whoever is in possession of a product, be it manufacturer, shipper, the railroad, the retailer or the farmer, should carry the responsibility of safe handling.

“That’s just part of good product stewardship,” said Payne.
Rail safer than truck transport?

The railroads’ contention that their own rails are not safe for transporting TIH materials makes little sense in comparison to other options, according to the IFCA.

“If we had to replace those 75,000 tons with (trucks) on the highways, it would take 3,700 semi loads just for Illinois,” Payne explained, “and we have neither the trucks or the drivers available. Is it safer to have 3,700 more semi loads on the roads in the fall hauling ammonia next to school buses, cars and motorcycles than to continue to utilize rail service?”

The U.S. Department of Transportation has said rail shipment is safer than truck shipment regarding TIH substances and is opposed to the railroads’ request, according to Payne.

“Millions of tons of ammonia have been transported safely by rail in this country,” she said, “but suddenly the railroads claim safety is an issue.”

When the railroads asked the STB to schedule the July 22 hearing to relinquish their common carrier obligation for TIH materials, the action blindsided members of TFI and IFCA. TFI had been conducting private meetings with rail carriers in an attempt to establish a $1 billion, third-party insurance policy paid for by chemical makers that would cover any liability amount above the railroads’ liability limit.

“We really thought the offer was very proactive, but the railroads forced the STB meeting anyway,” Payne said. “Our efforts seem to have been for naught.”

Because of the way the railroads handled the negotiations and the call for the hearing, a “trust factor” may have been fractured between the two sides, she said.

Municipalities may be affected

An even larger issue than the threat of discontinuation of transportation of chemicals used for agriculture by rail is just under the surface of the railroads’ action, Payne feels. She worries that the ban on transport of TIH substances, if approved, would include chlorine – which nearly every city uses.

“Chlorine is used in every municipal drinking water plant in the U.S.,” she said.

“If (the railroads) don’t want to carry chlorine, can you imagine the impact on public health? This is a huge issue that reaches far beyond its impact on agriculture.

Payne remains concerned that the STB’s three-person board could rule for the railroads, which she said would result in higher prices for chemicals and fertilizers used in agriculture. The cost for the railroads’ liability coverage – which is really what is behind the railroads’ request of the STB – could “price out of business” rail shipment of ammonia in Illinois and force shippers to use more trucks, she said.

The groundwork has been laid for a legislative battle over the issue, with railroads now openly lobbying for indemnification from their common carrier obligation, which is defined by a 1906 law.
TFI responded by sending its own lobbyists to Capitol Hill last week.
Payne said those with an opinion on the issue should contact their U.S. legislators.