Tell the RTC to protect our coast!
“If you happen to be a short line that’s in and around and operating near one of these shale formations, the money that you are making is unprecedented.”
—Rich Simmons, President of the American Short Line and Regional Railroad Association
Why does Progressive Rail want to come to Santa Cruz County?
Santa Cruz County Regional Transportation Commission (RTC) staff, better known for careful long-term studies than agile decision making, are moving quickly and quietly with the current rail operator proposal and negotiation process. Given the unique and extraordinary value of our coastal corridor, this is not prudent.
Basic research about Progressive Rail, the rail operator currently negotiating with RTC to operate freight on the Watsonville section of the corridor, turns up disturbing info:
- Progressive Rail, a Midwest freight rail operator with no background in tourist trains, submitted a 60-page "tourist train" proposal that included a single, buried bullet point about their plans to construct a propane distribution terminal in Watsonville.
- Progressive Rail has strong ties to the oil and gas industry. Chair/CEO, Craig McKenzie has a 29-year career as an oil and gas executive. At least four of six on Progressive Rail’s leadership team, including Craig McKenzie, sat on the board of Dakota Plains Holdings, a company connected to the 2013 Lac-Mégantic rail disaster that later declared bankruptcy. Craig McKenzie was CEO of Dakota Plains Holdings when the 2013 disaster happened.
- Progressive Rail has a history of using and threatening to use railroad preemption to establish, maintain, and expand operations that have created safety, health, traffic, and environmental concerns in Lakeville, MN; Chippewa Falls, WI; Eagle Point, WI; and other communities where they operate.
The U.S. oil and gas industry is booming like never before. The Federal Government is working to encourage off-shore drilling and new drilling sites on public land. There is a growing demand to ship dangerous Bakken Crude by rail and the oil and gas industry is exploiting historic railroad "preemption" law to circumvent local zoning and environmental regulations in communities across the U.S. In light of these national trends and our local situation, the RTC staff should exhibit extraordinary caution before signing a contract with a new rail operator.
railroad preemption leaves communities vulnerable
Preemption is a federal process used by railroad operators to control a rail corridor and sidestep the wishes of local communities. Preemption is adjudicated by the federal Surface Transportation Board (STB).
The following excerpt from a September 2015 report by the New England Center for Investigative Reporting shows how one community fell prey to railroad preemption. Let's hope the RTC can protect Santa Cruz County from the vulnerabilities railroad preemption creates.
In December 2012, Delli Priscoli finally unveiled his plans to more than 100 Grafton, MA residents at a meeting in the municipal gym. The railroad yard, he announced, was to become a propane transfer or “transloading” facility, meaning that propane would be brought there by rail and unloaded onto tanker trucks to be distributed. With four 120-foot long, 80,000-gallon storage tanks to be filled by up to 2,000 train tank cars a year, it would be the biggest rail propane facility in Massachusetts.
Residents were dumbfounded: The location was in the middle of a residential neighborhood, less than 2,000 feet from an elementary school and atop the town’s water supply. But, aside from an application to the state’s fire marshal (still unapproved), the railroad’s owner had not requested nor obtained, town officials say, any local construction permits, environmental assessments, zoning variances — or permission.
And as residents would learn, it was the railroad’s position that it didn’t have to: Being a railroad, the Grafton & Upton was exempt from any state or local law that interfered with its business, a legal doctrine known as preemption.
As one resident put it, “You mean we have no rights?”
Around the country, in towns as small as Grafton and as large as Philadelphia and Chicago, communities are beginning to ask the same question as the domestic energy boom makes the expansion of railway infrastructure — to host trains carrying crude oil, propane and ethanol — a profitable venture indeed.
Railroads are exploiting a large, surprising loophole in federal regulatory law, critics say, and they are doing so with the backing of an obscure federal agency, the Surface Transportation Board (STB), which has been quietly creating what some call a “regulation-free zone” and asserting a jurisdiction over railroads that trumps health and safety laws.
The result is a “regulatory hole you could drive a train through,” says Ginny Sinkel Kremer, an attorney who represents the town of Grafton in its legal battles against the transloading facility and the STB. (Read full NECIR story)
Why Do we need to choose a new rail operator now?
Perhaps the biggest question is:
Should the RTC even choose a new rail operator now when the Unified Corridor Study (UCS) to be completed in December 2018 may determine that a non-rail option is the best use of the corridor?
We are fortunate that the RTC had the foresight to purchase the corridor from Union Pacific. Now that our current rail operator, Iowa Pacific, has asked to pull out of their contract prior to 2021, we are free to move forward with the best plan for the corridor in 2019. Let’s not risk losing our options by choosing an inappropriate rail operator.
Berge, Clint. “Town of Eagle Point and Progressive Rail Butt Heads over the Future of a Popular Road.” WQOW TV: Eau Claire, WI NEWS18 News, Weather, and Sports, 7 Dec. 2017, www.wqow.com/story/37019674/2017/12/Thursday/town-of-eagle-point-and-progressive-rail-butt-heads-over-the-future-of-a-popular-road.
Chase, Taylor. “As Rail Moves Frac Sand across Wisconsin Landscape, New Conflicts Emerge.” Wisconsin State Journal, Wisconsin Center for Investigative Journalism, 13 July 2014, host.madison.com/wsj/news/local/as-rail-moves-frac-sand-across-wisconsin-landscape-new-conflicts/article_5c1e6f33-a963-58ba-961f-98cca14934bb.html.
“Company Overview of Dakota Plains Holdings, Inc.” Bloomberg.com, Bloomberg, www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=145398915&utm_source=Santa%2BCruz%2BCounty%2BGreenway&utm_campaign=850119d37e-PROGRESSIVE-02&utm_medium=email&utm_term=0_40e12da381-850119d37e-19843023.
Farmer, Blake. “Short Line Railroads Face Tough Track Ahead.” Marketplace, Marketplace, 8 Jan. 2013, www.marketplace.org/2013/01/08/sustainability/fiscal-cliff/short-line-railroads-face-tough-track-ahead.
Fears, Darryl. “Trump Administration Tears down Regulations to Speed Drilling on Public Land.” The Washington Post, WP Company, 1 Feb. 2018, www.washingtonpost.com/news/energy-environment/wp/2018/02/01/trump-administration-tears-down-regulations-to-speed-drilling-on-public-land/?utm_term=.ad80dbe30643.
Ferrar, Kyle. “CA Refineries: Sources of Oil and Crude-by-Rail Terminals.” FracTracker Alliance, 28 May 2016, www.fractracker.org/2016/05/ca-crude-by-rail-sources-terminals/.
“Grafton Statement to STB: Affidavit of Tim McInerney, Grafton Town Administrator.” DocumentCloud, www.documentcloud.org/documents/2428665-grafton-statement-to-stb.html#document/p22/a243064.
Haifley, Dan. “Dan Haifley, Our Ocean Backyard: March 9 Last Day to Comment on Offshore Oil Plan.” Santa Cruz Sentinel, Santa Cruz Sentinel, 24 Feb. 2018, www.santacruzsentinel.com/environment-and-nature/20180224/dan-haifley-our-ocean-backyard-march-9-last-day-to-comment-on-offshore-oil-plan.
Hein, Jayni Foley. “Trains and Crude Oil Are Too Often an Accident Waiting to Happen.” Los Angeles Times, Los Angeles Times, 19 May 2014, www.latimes.com/opinion/op-ed/la-oe-hein-oil-train-accidents-20140520-story.html.
Holdings, Inc. Dakota Plains. “Dakota Plains Board Of Directors Announces Executive Management Appointments.” PR Newswire: News Distribution, Targeting and Monitoring, 12 Feb. 2013, www.prnewswire.com/news-releases/dakota-plains-board-of-directors-announces-executive-management-appointments-190826671.html?utm_source=Santa%2BCruz%2BCounty%2BGreenway&utm_campaign=850119d37e-PROGRESSIVE-02&utm_medium=email&utm_term=0_40e12da381-850119d37e-19843023.
Jr., Nick Sambides. “Lawsuit Motion Claims Faulty Tanker Design, Deadly Negligence Caused Quebec Train Explosion.” Bangor Daily News, Bangor Daily News, 18 July 2013, bangordailynews.com/2013/07/18/news/state/first-lac-megantic-lawsuit-claims-faulty-tanker-design-deadly-negligence/?utm_source=Santa%2BCruz%2BCounty%2BGreenway&utm_campaign=850119d37e-PROGRESSIVE-02&utm_medium=email&utm_term=0_40e12da381-850119d37e-19843023.
Michael J. Mishak, Center for Public Integrity. “Big Oil's Grip on California.” The Nation, Center for Public Integrity, 17 Apr. 2017, www.thenation.com/article/big-oils-grip-on-california/.
Nelson, Emma. “After 7 Years, Lakeville Residents Fight Rail Storage in Backyards.” Star Tribune, Star Tribune, 21 Jan. 2016, www.startribune.com/after-seven-years-lakeville-neighbors-are-still-fighting-railroad-storage-in-their-backyards/366006451/#1.
“Progressive Rail | Freight Transportation | Shipping in Minnesota, Missouri, Illinois, Iowa, and Wisconsin.” Progressive Rail | Freight Transportation | Shipping in Minnesota, Missouri, Illinois, Iowa, and Wisconsin., www.progressiverail.com/.
Richmond, Stephen M., and Marc J. Goldstein. Collision Course: Rail Transportation and the Regulation of Solid Waste. www.bdlaw.com/assets/attachments/163.pdf.
Spencer, Susan. “Train Cars Carrying Propane Tanks Derail in Grafton.” Telegram & Gazette, Worcester, MA, Telegram.com, 17 June 2015, www.telegram.com/article/20150616/NEWS/150619270.
Thompson, Isaiah. “Rail Loopholes Take Communities by Surprise.” New England Center for Investigative Reporting, 28 Sept. 2015, www.necir.org/2015/09/28/loopholes-in-national-railroad-policy-take-communities-by-surprise-documentation/.
“Town Map of Grafton Propane Site.” DocumentCloud, www.documentcloud.org/documents/2428745-town-map-of-grafton-propane-site.html//.
“Unified Corridor Study.” Santa Cruz County Regional Transportation Commission, sccrtc.org/projects/multi-modal/unified-corridor-study/.