Rail industry to Congress: California's locomotive rule is a state reg with national consequences
6/24/2024
By Julie Sneider, Senior Editor
BNSF Railway Co.’s planned $1.5 billion Barstow International Gateway facility in Southern California hangs in the balance if the California Air Resources Board (CARB) is allowed to enforce its locomotive emissions rule, Association of American Railroads (AAR) President and CEO Ian Jefferies told a congressional committee June 13.
Jefferies testified before a U.S. House Committee on Science, Space and Technology subcommittee about how CARB’s rule would impact the national rail network and U.S. supply chain. The hearing’s title: “Environmentalism off the rails: How CARB will cripple the national rail network.”
CARB is seeking a waiver from the U.S. Environmental Protection Agency to enforce its in-use locomotive emissions rule, which would require freight railroads in the state to adopt zero-emission locomotives for industrial use by 2030 and for normal hauling by 2035, according to the AAR. By 2047, 100% of annual fleet usage in the state must be from zero-emission locomotives.
Railroads and locomotive operators also will be required to pay into a spending account at an amount determined by the emissions they create while operating in California. Railroads and operators will be able to use the funds to upgrade to cleaner locomotive technologies. Locomotives also will have a 30-minute idling limit under the rule.
“Railroads know that, as cumulative global emissions continue to rise, emission reductions and policies aimed at transitioning toward a net-zero economy are desirable.” — AAR President and CEO Ian Jefferies Association of American RailroadsAAR and the American Short Line and Regional Railroad Association (ASLRRA) oppose the CARB rule, claiming that the technology for zero-emission locomotives isn’t yet available for railroads and other operators to meet the deadlines. Railroads and locomotive builders are in the process of developing such technology, but it will be years before it’s available for industry-wide use in California. And when that technology is readily available, the cost to railroads would be too expensive to overhaul their entire locomotive fleets to meet the mandated standards in a short timeframe, rail industry representatives say.
In some cases, smaller railroads in California could be forced out of business, according to the ASLRRA.
For its part, CARB projects that the regulation would result in the largest reduction in nitrogen oxide emissions to help meet California air quality standards by a 2037 deadline. The reduction in nitrogen oxide and diesel particulate matter also will lead to $32 billion in health savings by preventing 3,200 premature deaths and 1,500 emergency room visits and hospitalizations in California, CARB projects. Cancer risk from exposure to air toxins within 1 mile of locomotive operations is expected to be reduced by 90%, CARB officials say.
In his prepared testimony to the subcommittee, Jefferies noted that AAR members support CARB’s overall goals of improving air quality and reducing greenhouse gas (GHG) emissions related to rail transportation.
“Railroads know that, as cumulative global emissions continue to rise, emission reductions and policies aimed at transitioning toward a net-zero economy are desirable,” Jefferies said in his written testimony.
But government regulations designed to meet air quality goals have to be “realistic, lawful and reasonable from a cost-benefit standpoint,” he added.
“The policies cannot assume that technology that does not exist can simply be willed into existence,” said Jefferies. “And the policies must not unduly impair the efficient functioning of the national freight-rail network.”
Subcommittee Chair Jay Obernolte (R-Calif.) asked the panelists how the CARB regulation might impact job-creating projects, such as BNSF’s plan to build a 4,500-acre multimodal transfer facility in Barstow, California. The project would include a rail yard, intermodal facility and warehouses for transloading freight from international containers to domestic containers.
The facility will enable the direct transfer of containers from ships at the ports of Los Angeles and Long Beach to trains for transport through the Alameda Corridor onto BNSF's mainline to Barstow. Once the containers reach the Barstow International Gateway, they will be processed using clean energy-powered cargo-handling equipment, and then staged and built into trains moving east via BNSF’s network across the nation.
“The CARB in-use locomotive rule will have dire consequences for short lines, and will cripple the U.S. rail network.” — ASLRRA President Chuck Baker By Julie Sneider, Senior EditorWestbound freight would be similarly processed at the facility to more efficiently bring trains to the ports and other California terminals. The facility is expected to create 20,000 direct and indirect jobs, BNSF estimates.
Obernolte, whose congressional district includes Barstow, observed the rule likely would prompt BNSF to halt the International Gateway project or possibly move it to another state.
Earlier this month, BNSF President and CEO Katie Farmer told shippers attending the North American Rail Shippers conference that the Class I would have to reconsider the Barstow project if the CARB rule moves forward. Barstow city officials also have publicly opposed the CARB rule because of the impact it would have on the BNSF project.
“[BNSF] would build it somewhere else because they cannot afford freight locomotives that can’t operate in California and would have to be switched at the state border,” Obernolte said. “That would be nonsensical, and I understand that.”
Jefferies agreed, adding that the CARB rule runs counterintuitive to its own goals of reducing GHG emissions. The BNSF facility would benefit the environment by shifting millions of tons of freight from trucks to rail for transportation into and out of the state, he pointed out.
“These are the types of projects that we all should be celebrating and championing,” Jefferies said. “This is a $1.5 billion project, would be the largest intermodal yard in the country and would all be done with private dollars. Taking thousands of trucks off a very congested corridor, putting it on rail, getting it out of the L.A. Basin and into an area to sort for long-haul across the country is exactly the sort of thing we want to see happening.”
Later in the hearing, subcommittee member and U.S. Rep. Vince Fong — a Republican whose district includes California’s Central Valley — asked the panel how the rail network and supply chain outside the state would be impacted if the EPA grants CARB’s waiver request.
The impact would be significant because railroads operate on a national network that crosses state lines, Jefferies responded. Also, there’s concern that if California is allowed to mandate in-use locomotive emissions, other states might adopt similar measures. That could result in a patchwork of emission regulations that make it nearly impossible for trains to haul freight seamlessly to intended destinations.
Moreover, it would increase the cost of rail transportation even for the larger railroads given the estimated $1.6 billion a year that they’ll have to contribute to the CARB fund because “they cannot turn their fleet over with technology that does not yet exist,” Jefferies said.
“The title of this hearing says it all — the CARB in-use locomotive rule will have dire consequences for short lines, and will cripple the U.S. rail network,” ASLRRA President Chuck Baker testified.
The CARB rulemaking text even acknowledges the rule’s impact on short lines, which is that some would go out of business due to the high cost of upgrading their locomotive fleet, Baker said.
And if small railroads go out of business because they can’t afford the cost to meet the mandated timeframe for replacing their fleet, then much of the first-mile, last-mile freight business in California will move from rail to trucks, he added.
“And I would say that’s devastating for the environment, for safety and for the taxpayer who will have to pay for the highway maintenance,” Baker said.
