(The following story by Karen Ogden appeared on the Great Falls Tribune website on December 30.)
GREAT FALLS, Mont. — If the state of Montana were a Monopoly game, one player — the Burlington Northern Santa Fe Railway — would own almost all the railroad cards.
BNSF operates 90 percent of the railroad miles in Montana.
And a coalition of lawmakers, mostly from northcentral Montana, says the railroad has an unfair advantage.
Consider this from a new state study on Montana’s lack of railroad competition:
Freight rates for Montana shippers often are 50 percent higher than those in states with railroad competition.
That translates into an extra $60 million a year and devalues Montana’s wheat-producing land by $1 billion a year, according to the state study, which was commissioned under a Senate bill sponsored last session by Sen. Trudi Schmidt, D-Great Falls.
In simpler terms, “it costs more to ship (grain) from Minnesota to the West Coast than from Montana,” said Sen. Jerry Black, R-Shelby.
Meanwhile, BNSF has made moves to abandon branch lines that link small-town grain elevators to export markets on the West Coast.
BNSF has been frank about its vision for the future, and that vision includes the huge shuttle loaders that are moving into the state. This fall, a BNSF spokesman said, “Our vision and our approach is to focus on what we do best, and we think that is to provide a high-volume, far-reaching mainline trainload network.” The spokesman, Pattrick Hiatte, said, “What that means is moving a whole train from one location to another.
Hiatte, who works in Fort Worth, Texas, was talking about the state’s high-speed grain elevators, which good for fast, efficient rail traffic, but bad for traditional elevators at the end of branch lines.
Black is among a handful of legislators who plan to tackle Montana’s railroad issues as the 59th Legislature gets under way.
However, it probably is more than a one-session job.
“I’m looking at this taking several sessions,” said John Witt, R-Carter. “They’re so huge, you just don’t stop BN and say, ‘Now guys, you have to play by our rules.'”
Black and Witt have submitted legislation to create a $4.1 million revolving loan fund to rehabilitate or build branch lines and related switching yards, intermodal freight facilities or other infrastructure.
A state study released this fall identified 10 “at-risk” branch lines in Montana.
One of the most prominent branch lines is the 95-mile line from Great Falls to Helena, which has had virtually no traffic since 2000.
However, most are in northcentral Montana and still are used by farmers to send their grain to market.
Saving the branch lines would prevent costly wear and tear on county roads from truck traffic and create opportunities to ship value-added products out of rural communities, proponents say.
“As Burlington Northern Santa Fe continues to abandon those short branch lines, it puts more pressure on truckers and more wear and tear on our highways, and it decreases the ability for some companies to ship products out of state to market them effectively,” Black said.
The proposed fund would provide low-interest loans to railroads, cities, counties, short-line railroads or other entities who want to buy, develop and rehabilitate branch lines.
Many of the branch lines need to be upgraded to handle the larger, 286,000-pound grain cars now used on the BNSF mainline.
Core funding for the proposal would come from a $1.1 million “balloon payment,” due in 2006 to the state-administered Federal Local Rail Freight Assistance Program.
The Port of Montana in Butte borrowed the money from the LRFA to expand its grain and rail facilities.
The bill would ask for an additional $3 million from the General Fund to establish the new revolving loan program, which would ultimately replace the LRFA.
The new program would be administered by the Montana Department of Transportation.
Borrowers would provide matching funds of 30 percent for rehabilitation projects and 50 percent for new projects, Black said.
Although that’s the only piece of legislation formally submitted so far, lawmakers are discussing several other ideas.
One is a resolution supporting an alliance with North Dakota, another captive state.
The two states would make a joint appeal to the federal Surface Transportation Board, whose job it is to monitor railroads and resolve rate disputes.
However, such appeals are costly, and an appropriation probably would be required.
Several ideas have come out of the Rail Freight Competition Study, commissioned under Schmidt’s Senate Bill 315.
A task force of economists, state transportation officials, producers and others who rely on rail service met in Great Falls earlier this month to decide on a set of recommendations from the study.
One option would attempt to force BNSF to offer more competitive rates by circumventing its tracks.
Under that scenario, the state would appeal to the federal government to allow larger, three-trailer trucks on Interstate 15.
The trucks would haul grain from northcentral Montana’s rich grain country to the Canadian Pacific line at Sweet Grass or the Union Pacific Line out of Butte, forcing BNSF to compete for the freight.
However, several questions would have to be answered, Schmidt said, not the least of which is whether the public would support the bigger trucks on the Interstate.
More study also would be needed to determine whether the advantage in better rail rates would outweigh the additional wear-and-tear on the Interstate, Schmidt added.
The task force also supported creating a multi-state coalition to fight for rail competition and the creation of the revolving loan fund for branch lines.
Black also suggests legislation that would support federal Senate Bill 919, the Railroad Competition Act sponsored by Sen. Conrad Burns.
Among other things, the bill would create a more effective system for lodging rate complaints with the federal government, Black said.
The typical Montana farmer sends his or her profits from roughly every third crop to Burlington Northern Santa Fe to pay freight rates, said Black and Witt.
“When you talk about economic development, that’s huge,” Witt said. “I’d like to figure out some way to keep that in the hands of the local community for infrastructure and schools. … We’re just giving up our tax base, and they’re taking it in freight.”