(The following story by Brent Jang appeared on the Globe and Mail website on April 21.)
TORONTO — Two of the largest railways in the United States have joined rival Canadian National Railway Co. to sound the alarm that expansion plans by North America’s freight carriers are being jeopardized by local residents defending their own backyard.
CN’s plans to revamp its Chicago hub have become the test case, with the railway running into opposition from suburban residents, who fear that increased train traffic near their homes will lead to longer waits at rail crossings, extra noise and more pollution.
CN announced last September that it would pay $300-million (U.S.) for Elgin, Joliet & Eastern Railway Co. (EJ&E), a strategic but underused line along Chicago’s outskirts, subject to regulatory approval from the U.S. Surface Transportation Board.
Union Pacific Corp. of Omaha, Neb., and Norfolk Southern Corp. of Norfolk, Va., say the board’s environmental review of Montreal-based CN’s proposals for EJ&E will set a precedent for rail industry growth in the face of neighbourhood criticisms.
Claude Mongeau, CN’s executive vice-president and chief financial officer, said the stakes are high not only for CN, but for the continent’s railway industry, which will be closely watching the regulatory board’s environmental impact assessments of CN’s plans.
“The trains aren’t going to disappear. It’s just a question of putting trains where it’s most efficient and where it’s in the public interest,” Mr. Mongeau said in an interview. “In the Chicago suburbs, the trains can move more efficiently, but there is resistance to change.”
Norfolk Southern and Union Pacific didn’t offer their direct support for CN’s EJ&E deal, but they raised broader issues to argue that local concerns shouldn’t trump the importance of an efficient rail network to the U.S. economy.
Delays in Chicago, the railway capital of North America, create a domino effect across the continent.
Seeking to reduce gridlock, CN is proposing to reroute its trains to take a detour through the suburbs because the route through Chicago city centre takes a frustrating 33 hours, the same time it takes the train to travel from Winnipeg.
CN executives will have a first-hand view of the bottlenecks when the company holds its annual meeting tomorrow in Chicago. Protesters say they will be delivering a message that they oppose CN’s suburban strategy.
The complaints are being led by Barrington, a community of 30,000 people located 56 kilometres northwest of Chicago.
About 30 neighbouring suburbs have banded together with Barrington to combat CN’s efforts to increase use of the 300-kilometre EJ&E tracks.
“It’s like a turning a country road into an interstate highway – a dramatic impact,” Barrington Mayor Karen Darch said in an interview. “You destroy communities and lives.”
Ms. Darch said there are better ways to alleviate Chicago’s choke points, including a regional plan that encompasses various railways.
For the past four years, railways have enjoyed a renaissance, fuelled by surging commodity prices and brisk Asian trade.
“The need for rail capacity improvements is particularly acute in the Chicago area,” Norfolk Southern said in its submission to the regulatory board.
Norfolk Southern added that the board should “consider the important national need for rail capacity growth when weighing the environmental impacts of proposed rail transactions and potentially costly mitigation measures.”
Union Pacific asserts that the railways and their customers need greater rail capacity to help build prosperity.
“The way the board handles these issues will have major implications, not only in the Chicago area, but in future proceedings throughout the nation,” according to Union Pacific’s regulatory filing. “It will determine whether railroads will be able to effectively add capacity to handle the traffic demands likely to be placed on them in the future, or whether the board will allow these projects to be impaired by local interests opposed to additional train traffic.”
Mr. Mongeau said railways are more environmentally friendly than trucks, and increased traffic on EJ&E tracks would still be vastly less busy than existing rail lines of rivals operating near Chicago.
He said CN hopes to close the EJ&E transaction by the end of this year.