Pending rail legislation expected to benefit ethanol producers

By Erin Voegele | December 09, 2009
Report posted Dec. 18, 2009, at 9:01 a.m. CST

Sen. John Thune, R-S.D., recently announced his support of the Surface Transportation Board Reauthorization Act of 2008, S.2889. The legislation was introduced Dec. 16 and referred to the Senate Committee on Commerce, Science and Transportation, which approved the bill the next day.

Thune, who is ranking member of the Surface Transportation Subcommittee of the Senate Committee on Commerce, Science, and Transportation, said the legislation would offer assistance to small shippers in a number of important ways. This includes creating a new customer advocate at the STB, who would assist shippers in getting their questions and concerns addressed. The bill would also streamline the rate complaint process and lower the fee for filing a complaint to $350. Of important note to small shippers, the legislation could create a new arbitration process for small rate complaints. According to Thune, this aspect of the bill will be especially valuable to grain elevators and farmer-owned ethanol plants that lack the time or expertise to challenge a railroad rate under the existing rate case procedures.

In addition, the legislation would:
  • Modify federal guidelines, which serve as a roadmap for STB oversight, to require a better policy balance between the interests of the railroads and their shippers

  • Require the railroads to publish service standards in their tariffs

  • Reinstate the STB's ability to initiate investigations on its own initiative, and undertake a study of rail practices, including switching, demurrage, and other accessorial charges, including fuel surcharges

  • Establish a process for the review of new and existing "paper barriers" that limit the ability of some short lines to interchange freight with a railroad other than the railroad which sold or leased the line

  • Expand and improve the quality and expertise of the STB

    "As a rural state in the middle of the country, rail service is critical to South Dakota's farm economy. Much of South Dakota's agricultural harvest is transported via rail to urban areas and ports on the East and West Coasts," Thune said. "This legislation will help ensure that South Dakota farmers receive a fair shake from rail carriers as they move their goods to market."

    The bill is also supported by Sen. Byron Dorgan, D-N.D. According to Dorgan, the legislation will give agriculture and energy producers, who often face rail monopolies to get their goods to the market, a better way to fight back against unreasonable rail rates. "For too long, the policies of the Surface Transportation Board, which was created to protect rail customers, have made it hard for captive shippers to get fair rail rates," he said. "This bill isn't perfect, but it will at long last make strides toward increasing rail competition and giving energy and farm producers in North Dakota fair rail rates."