Much of that ethanol will likely continue to be produced in the Midwest, with the heaviest demand remaining concentrated along the East and West coasts. Proper transportation infrastructure will be crucial to delivering ethanol to these markets outside the Midwest. A significant portion of this transportation will likely take place by rail. However, railcars and tracks aren't the only infrastructure needed for rail transportation. Ethanol transloading terminals at both the destination markets and point of origin are essential to providing quick, efficient and economic rail transportation. As ethanol shipments continue to increase, large terminals capable of handling unit trains are expected to be a necessary component to effectively serve key markets.
According to John Schmitter, a rail transportation consultant who is involved in the biofuels industry, approximately 70 percent of U.S. ethanol production is currently shipped by rail. This level is expected to remain relatively stable as the industry moves forward. Although, there has been some concern over the railroad’s future capacity, and its ability to handle increased ethanol shipments, Schmitter says it is important to put the amount of projected ethanol shipments into perspective. Even as ethanol production and shipments continue to increase, ethanol will barely constitute 1 percent of total rail volume, and railroads will have plenty of capacity to handle that.
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However, rail capacity is only one element of efficient rail transportation. The ability to ship unit trains of ethanol, as opposed to single manifest cars, is important to ensuring quick and affordable ethanol shipments. Robert White, the Ethanol Promotion and Information Council’s deputy director, explains the importance of large ethanol transloading terminals. “The continued involvement of those larger facilities that can handle multiple cars—or, in fact, a unit train—will ultimately lower [freight prices] because the more people who have to touch the fuel—the more times it has to be touched—the more money will be spent on freight,” White says. Every penny saved on shipping is a penny that can be passed on to the consumer in the form of lower prices. Transportation will continue to be an important aspect of consumer acceptance because of its impact on the price at the pump, he says.
Although no comprehensive list of current ethanol rail terminals is known to exist, Schmitter says that approximately nine U.S. rail terminals can currently handle a unit train of ethanol, with nearly eight more in various stages of planning and development.
Terminals in Operation
Safe Handling Inc., a bulk product transportation and toll processing company, operates two rail terminals. One is in Mount Pleasant, Pa., approximately 45 miles southeast of Pittsburgh. The other is in Auburn, Maine. Both terminals have the capacity to transload ethanol. “We are not handing unit trains,” says Andy Meyer, Safe Handling’s vice president of sustainability. “The market we are in doesn’t need unit trains, so they are not unit-train terminals.” Although Meyer doesn’t classify the terminals as unit-train terminals, the Pennsylvania location can handle 145 railcars, while the Maine location has capacity for 210.
Each of Safe Handling’s terminals can transload 180,000 gallons of fuel per day. The company is in the process of doubling the Pennsylvania terminal’s capacity. “Pennsylvania has been a giant success for us,” Meyer says. “We are scrambling to keep up with demand. We are in the process of doubling our capacity, and that is already sold out.”
Meyer says the decision to handle ethanol was a natural extension of the company’s business. Safe Handling already had the rail space, fire suppression, containment, trained staff and utilities. Although ethanol represents a relatively small portion of the products Safe Handling transloads, the company is expecting demand and shipments to grow. “It has been a great business for us,” he says. “We are pleased with the business, and it has allowed us to create jobs.”
Although Safe Handling’s terminals do not offer barge access, Meyer says be believes most ethanol rail terminals currently handling unit trains of ethanol are located on marine terminals that can fill barges. He says that the markets served by Safe Handling’s terminals don’t require unit trains or barges of the product because people simply aren’t using that much ethanol right now.
Several other companies are working to add ethanol capability to their terminals. U.S. Development Group LLC currently operates four rail terminals in Houston, Dallas/Fort Worth, Texas, Baltimore, and Linden, N.J. All four locations have the capability to transload unit trains of ethanol. According to Meg Martin, a U.S Development Group spokesperson, the company’s experience handling ethanol has allowed their business to grow. The company expects to add additional ethanol capacity in the future.
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