Fuel Prices

[GP-9_Man11786]

With the price of oil the way it is, I can't help but wonder if the railroads are being hurt the way the airlines are. Here in New York, Governor Pataki has been pushing ethanol and biodiesel like crazy. Do any railroads use these fuels in their locomotives or maintainence vehicles? Do railroads have to pay the same taxes on fuel as truckers?

[tomnoy3]

The Biodiesel, I am only aware of one railroad in the country that is running on a B5 (5% Biodiesel 95% Diesel) Blend and that’s Minnesota Prairie Line Railroad based in Glencoe, MN. Most railroads are wary of the fuel because of its tendencies to gel up at colder temps and the drop in efficiency (In my testing, for every 1% of biodiesel added, efficiency drops .1% compared with #2 diesel).

As for the taxes, railroads use the same diesel as farmers do, it has a red dye added to it hence the name #2 Ruby Diesel. This way it can be identified as tax-free just by law enforcement looking at it. Railroads and Tractors typically do not us public funded infrastructure which is why they do not have to pay the road tax. If say a trucker was caught using Ruby Diesel, it ends up being a multi-thousand dollar fine.

-Tom