While it strongly supports a new regulation that requires railroads to implement technology capable of making rail movements safer, the Chlorine Institute, Inc. asked the Federal Railroad Administration to re-issue the rule with a corrected cost-benefit analysis.
The Positive Train Control rule,
which was published Jan. 14, 2010, drastically underestimates the rule’s
benefits, according to a CI-commissioned follow-up cost-benefit study1 by L. E.
Peabody & Associates, Inc., Alexandria, Va. This faulty analysis could
foster a situation that would allow railroads to impose on shippers of chlorine
and other toxic inhalation hazard (TIH) chemicals an unfairly large share of
the costs of applying PTC technology, CI told the FRA in a petition.
"[T]he railroads have
already announced that they will attempt to recover their investment in PTC
from those shippers offering TIH materials for rail movement," President Arthur
Dungan wrote. "These efforts will have a direct and substantial impact on
prospective TIH rail shippers and a strong incentive to move TIH shipments from
the safer rail mode to the less-safe highway mode of transportation. Certainly,
TIH shippers also will be negatively impacted by the railroads rolling their
PTC investments on regulated shipments into their regulatory rate base, thereby
leading to a double recovery of PTC costs well into the future…"
cost-benefit analysis found that the final rule underestimated the net direct
and indirect benefits of implementing PTC by $12 billion-plus. In addition to
safer operation, key benefits to railroads, shippers and the public afforded by
the PTC rule include:
• Fuel savings for
railroads from better fuel monitoring and more efficient operations;
• Increased rail-line
• Improved rail equipment
reporting, monitoring and utilization;
• Improved rail dispatching
operations leading to greater efficiency;
• Reduced total cost for
all rail shippers resulting from improved rail transit times and reliability,
• Decreased highway
crashes, congestion, maintenance costs and truck emissions, all of which would
result from fewer trucks on roads as shippers take advantage of better rail
service (and/or reduced rail rates), and shift freight shipments from truck to
"To arbitrarily exclude
vast sums on the benefit side of the cost/benefit analysis is to fatally
prejudice the result in a manner that is wholly unacceptable, and inconsistent
with the most basic cost/benefit models," the CI petition states. "Given the
undeniable flaws in the cost/benefit analysis relied upon by FRA, and given the
substantial economic harm to TIH shippers, including chlorine shippers, that
would result from the use of that flawed analysis, FRA should reconsider its
final rule insofar as its cost/benefit analysis is concerned."
In comments filed last
August on the proposed rule, CI endorsed widespread application of PTC as part
of a holistic approach to rail safety and security across all mainline tracks,
not just those carrying passengers and TIH materials.
The Chlorine Institute,
Inc. is an Arlington, Va.-based trade association supporting the North American
and global chlor-alkali industry by fostering continuous improvements to
safety, security, and the protection of human health and the environment
connected with the production, distribution and use of chlorine and other
chlor-alkali mission chemicals.