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BNSF: We will shut down

Posted by Fred Frailey
on Wednesday, September 09, 2015

In a candid letter to a U.S. senator, BNSF Railway’s chief executive, Carl Ice, said September 9 that BNSF would in effect shut down most of its network rather than violate a federal law mandating that positive train control be operational by December 31. CSX Transportation has said it, too, questions whether it should violate federal laws, and other Class I carriers are likely to follow suit. This set up the real possibility of a national transportation crisis at the beginning of 2016. The public may be unaware of how closely the U.S. economy is tied to railroads, but the reality is that without railroads, this country will quickly cease to function normally. Imagine, for instance, no electricity to heat homes.

In his letter to Senator John Thune (R-South Dakota), chairman of the U.S. Senate Committee on Commerce, Science and Transportation, Ice says that the railroad has already spent $1.5 billion to deploy PTC and will likely spend another $500 million. Ultimately, this new technology will be deployed on half of BNSF’s network, the portion that handles 80 percent of its traffic.

But portions of both transcontinental routes will not be operational by the December 31 deadline set by Congress in 2008. Nor will commuter zones in Chicago, Seattle and Minneapolis. Ice says that to avoid operating on PTC-mandated subdivisions where PTC will not be installed before the deadline would force traffic on secondary routes unequipped to handle it and lead to a paralysis of the railroad.

Ice goes on to explain the railroad’s position. First, BNSF reads the law as saying no train can legally operate on a PTC-mandated line if PTC is not in service by December 31, rather than no train carrying hazardous substances. Then he goes on to say: “BNSF, as a matter of law, corporate policy and principle, does not willfully violate safety statues or regulations or ask our employees to do so. The announced enforcement policy by the [Federal Railroad Administration] of imposing fines for non-performance puts BNSF in a position that will be difficult to reconcile with our aforementioned unwillingness to willfully violate safety laws or regulations. BNSF does not believe that it can pick and choose which safety rules must be followed.” Ice adds that were his railroad to operate over lines where PTC is not in place and an accident occurs, the exposure to legal claims and punitive damages would be significant.

Ice is careful in his letter not to say BNSF will refuse to run trains in violation of the law, only that it doesn’t see how it can. But any reasonable interpretation of his language is that the railroad will either coagulate to paralysis or operate at a fraction of its capacity.

The Surface Transportation Board, which regulates railroads, in effect came to the aid of BNSF and other railroads this past week. Its chairman, Daniel Elliott, wrote to Thune to say that railroads can “lawfully suspend service for various reasons, including safety.” In other words, Elliott is saying that the common carrier obligation of railroads is not absolute. Elliott added that CSX has expressed sentiments similar to those of BNSF.

So what does this all mean? I take railroads at their word that they have diligently tried to install PTC by the deadline. Six years ago Congress thought it was giving railroads enough time to do this, and railroads did not object then to that deadline. But implementation has been a disaster. The technology being put in place is largely new. FRA was slow to issue necessary rules. Signal engineers able to put all the pieces together have been in short supply. And then for more than a year everything ground to a halt because the Federal Communications Commission would not issue permits for construction of radio towers and antennae.

Further, as Ice points out to Thune, PTC is full of bugs as railroads roll it out on their networks. Says Ice: “We are seeing the PTC system trigger unnecessary braking events in which trains are stopped with a full-service brake application. This means that significant work has to occur before the train can re-start. These kinds of delays are numerous and cumulatively consume railroad capacity.”

What railroads have sought is an extension of the deadline, something that Congress has thus far refused to act upon because the votes to permit an extension aren’t there. Now the industry is beginning to say fine, we will not disobey the law and as a result we will be able to offer only a fraction of the service our customers depend upon.

My wife Cathie, who spent her corporate career dealing with political life in Washington, calls this “classic DC gamesmanship.” She says the fact that Carl Ice has now publicly laid out a disastrous outcome that neither voters nor shippers can countenance means that the problem will be resolved either by a suspension of the law or an amendment to it pushing back the deadline. Or maybe not. Who knows?

Our political system is full of hypocrites who pass laws yet will not deal with the consequences of those laws. This situation cries for clarity and level-headedness, and we’re seeing little of it in Washington. You wonder why Republicans are flocking to The Donald. This is why. Everyone is hiding from reality—everyone, that is, except a few brave souls such as Carl Ice, who is unafraid to say the ball is in Washington’s court and that we as citizens may end up burning our furniture in the fireplace to stay warm.—Fred W. Frailey

 

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