By TIM ALEXANDER
Illinois Correspondent

WASHINGTON, D.C. — Representatives from The Fertilizer Institute (TFI), the Illinois Fertilizer and Chemical Assoc., The McGregor Co. and Terra Industries testified before the Surface Transportation Board (STB) at a hearing held July 22 on the railroads’ common obligation as it pertains to the transportation of toxic-by-inhalation (TIH) materials such as anhydrous ammonia.

The groups, along with the National Corn Growers Assoc. (NCGA), stressed to board members the essential nature of fertilizers to U.S. and Midwest agriculture, and the importance of transporting those products by rail.

“Fertilizer nutrients provide the food plants need to grow and ensure that there is an adequate supply of nutritious food and animal feed, as well as a bountiful supply of fiber and biofuels to help meet our nation’s energy needs,” TFI President Ford West testified, citing the public need for anhydrous rail transportation because of its essential role in producing nitrogen fertilizers.
“Without fertilizer in general and in particular, ammonia, our nation’s food and energy supply would be without 40 to 60 percent of today’s harvest.”

These groups see railroads as trying to get out of their common carrier obligation, which includes hauling anhydrous to agricultural retailers. The U.S. Department of Transportation (DOT), House Small Business Committee and the STB are all involved in the fight.
DOT recently proposed a rule requiring railroads to haul TIH materials on only the most secure rail routes, fearing derailments, terrorist attacks and other risks.

An assessment of the issue will be completed by September 2009. Some expect the railroads’ self-conducted assessment, however, will result in the designation of few secure routes.

The DOT proposal could greatly impact the common carrier obligation railroads have been directed to follow since the law was enacted in 1906. However, proponents of eliminating TIH fertilizer transportation say the law needs to be reexamined. “From our standpoint, safety and security is our number-one objective,” Tom White, a representative of the Assoc. of American Railroads (AAR), told The Associated Press in June. “But you have to look at a more fundamental question: Why are railroads being required to carry these very dangerous substances in the first place?”

The AAR has told the board revenue generated from transporting TIH chemicals doesn’t cover the railroads’ liability, and it is difficult to afford insurance. “The potential liability is enormous,” White said.

TFI and the other pro-transport groups told the board that the ag industry is concerned about the economics of transporting fertilizers to farms in the Midwest and elsewhere from other locations in the country without rail service.

“One railroad tank car can transport as much ammonia as four trucks,” West told the STB last week. “Rail transportation is not only more efficient than trucks, it takes a highly hazardous commodity off our nation’s highways where the potential for accident and public release are many times greater.”

West shot down a broad recommendation by the rail industry that the agricultural sector replace anhydrous with other nitrogen fertilizers.

He countered that ammonia is a primary ingredient needed to produce other nitrogen and most phosphate fertilizers.
West also reminded STB members that TFI and its member companies had already made an offer to enter into an agreement with Class I railroads under which shippers would assume part of the cost of excess liability insurance for rail transportation of anhydrous.

“There is no existing or economical substitute for anhydrous ammonia in the Corn Belt and in the production of phosphate fertilizer, and no safer or more efficient mode of transportation for ammonia than by rail ... as a result, it is imperative that STB recognize and maintain the obligation of the railroads to continue transporting this essential commodity,” he said.

In written comments to the STB, the NCGA maintained that without anhydrous, U.S. farmers would be unable to produce the amount or quality of food the world depends on.

“We are concerned over the railroads’ desire to be relieved of their common carrier obligation because of materials they transport that are (TIH) such as anhydrous ammonia. Anhydrous ammonia is a vital and essential plant nutrient that is critical to the nation’s food supply. Rail is the safest and most efficient method for transporting this critical agricultural product,” the NCGA letter reads, in part.