STB extends oversight of CN/EJ&E merger another two years

The Surface Transportation Board (STB) yesterday announced it extended for two years its oversight of CN's acquired control of the Elgin, Joliet & Eastern Railway (EJ&E).

The Class I acquired the EJ&E in 2008 and merged the railway's line into its operations. The board’s action grants a petition by the village of Barrington, Ill., and TRAC Coalition to extend the oversight until Jan. 23, 2017. The village and coalition filed the petition in August, arguing that because CN’s operating plan for the line hadn't yet been fully implemented, an additional two-year extension was necessary.

In their decision, STB members expressed concern about certain impacts on surrounding communities from increased rail traffic on the EJ&E line. In particular, they noted a connection between higher train flows and increased motorist delays, noise and air emissions.

"We find it appropriate to grant the petition to extend the oversight period for two years because of the substantially changed circumstances concerning recent rail congestion in the Midwest, particularly in Chicago, and the potential impact of this congestion on the EJ&E line, as well as the recent spike in blocked crossings on the line," STB members said in their decision. "Over the past year, congestion in the Chicago region and the effect that it is having on the entire rail network have become a major concern. This congestion has increased pressure to move trains around Chicago, even to the extent of sending trains to alternative gateways in other locations."

The STB's approval of the acquisition originally was subject to a five-year monitoring and oversight period to enable the agency to more closely examine the transaction's various impacts. The board later extended the oversight period for an additional year expiring Jan. 23, 2015.

As part of the oversight, CN is required to submit to the board quarterly reports detailing its compliance with STB-imposed environmental conditions, and monthly reports detailing its operations, including the number of times a crossing is blocked for more than 10 minutes and average daily train counts on various line segments.

CN officials expressed disappointment with the STB's "extraordinary extension" of its formal oversight period.

"With the former EJ&E now integrated into CN’s system and CN’s fulfillment of the requirements set out by the STB upon its approval of the transaction, there is no reasoned basis for the STB’s decision to continue its burdensome oversight," they said in an emailed statement. "The STB retains the ability to enforce the conditions that it imposed on this specific transaction that will continue to apply, and it retains its general regulatory authority over freight operations."

It's difficult to determine how CN’s Chicago-area rail operations differ from those of other railroads operating throughout Chicago or elsewhere in the United States, which are not subject to a similar STB reporting requirement, CN officials said.

"CN should now be allowed to focus its efforts and resources exclusively on the safe and efficient operation of trains free of unnecessary oversight and reporting," they said.