BNSF Railway Considering Coal-to-Liquids Plant in Montana
9 January 2007
The Billings Gazettereports that the head of BNSF Railway Co. has sent an engineering team to Montana to analyze a possible coal-to-liquids project.
In September 2006, BNSF and Tenaska, an independent energy developer, announced they were conducting a joint feasibility study including the exploration of multiple locations for the siting of commercial-scale, Fischer-Tropsch coal-to-liquids (CTL) facilities to produce an assured supply of cleaner diesel fuel at stable prices. BNSF’s 6,300 locomotives burned 1.4 billion gallons of diesel in 2005. As part of the project analysis, BNSF signed an agreement with Syntroleum Corporation to purchase quantities of Fischer-Tropsch diesel fuel to test its suitability for use in locomotives with more than 3,000 horsepower.
Old news. And no, BNSF isn’t going to build a CTL plant, at least not in Montana. The Montana Democrats are refloating the idea of trying to tax BNSF into providing lower rates.
Here’s an idea - get the rates lower by introducing competition! Doesn’t really matter how they do it -
confisticate core BNSF lines at assessed value and make them state owned, then contract out rail services to a franchise
same as above, but make it true open access
sue the STB to get them to enforce competitive caveats of Staggers (actually on Schwietzer’s to do list)
request the Justice Department to bypass antitrust exemptions and sue BNSF into breaking up
allow Canadian type GVW on key truck routes to Lewiston Id - this would allow the truck/barge alternative (memo to Murphy: It’s “truck/barge” that’s competition for railroads, not soley “trucks”[:-,]) and would need Idaho to go along
build their own rail line to the nearest port or competitive railhead - that could include rebuilding parts of the ex-Milwaukee or not, but the idea would be to find the closest way to either the UP and/or the Port of Lewiston ID. Start applying for that $10 billion
FRA loan now! You can use your state lands as collaterall!
As I’ve mentioned previously, the first two points of Dave’s proposal run contrary to the Fifth Article of Amendment to the Constitution. The fourth point would require an Act of Congress, the Justice Department cannot bypass existing statutes.
The states do reserve the right of eminent domain, which is a blatant right to confisticate property with due compensation for the purposes of the public good. As far as I know, eminent domain has withstood Constitutional muster.
The point is, has anyone tried to enact eminent domain over a current ROW? If the State of Montana decides it needs it’s own railroad, what’s to stop them from choosing a preferred alternative that just happens to coincide with a current railroad ROW?
Again, the fault isn’t necessarily with Montana or BNSF - both are protecting their own best interests as they see it. It is the STB that is at fault for not implementing the competitive caveats of Staggers when BN went into merger mania.
And if BNSF ever decides to get into the energy generation business via CTL, it is more likely they’d opt for North Dakota lignite - the high moisture content of lignite is ideal for gasification.
A state’s use of eminent domain to force “open access” on a railroad right-of-way would probably get overruled by a federal judge (even in Montana) as state regulation of interstate commerce, which is quite unconstitutional.
… so there is precident. And if the ROW is condemned into state ownership, how the state utilizes it’s new property aquisition is up to them. Doesn’t matter if it’s OA, franchising, or state rail operations.
On syntroleum…AAA announced today gas up to average of $2.62…a gallon…OPEC refuses to increase production…on eminent domain…Oops there are some loopholes in the legislative bucket…this attempts to address. Someone say a toxic derailment due to poor track maintenance…opening the door…not that State X could or would carry this to it’s logical and counterintuitive conclusion but it makes a handy fulcrum for leverage
H.R.4128To protect private property rights. The bill addresses concerns raised as a result of an eminent domain decision by the City of New London, Connecticut to take private property and allow ownership of that property by a private corporation with the goal of economic redevelopment in that area of the city. The action was justified by a Supreme Court decision. (Kelo v City of New London, Connecticut)
Although Congress can not pass a law that would override the Court’s decision it does place a condition on such actions that State and local governments would likely heed.
The bill asserts that a State or political subdivision may not take action or allow action to be taken that uses eminent domain to take over property to be used, or later to be used, for economic development if the State of local government are recipients of Federal economic development funds. Funds would be prohibited for two fiscal years after a court determines that the State or municipality violated this act. If funds have already been distributed they will be withdrawn.
Those governments found in violation of this act may return to eligibility for Federal development funds if they return the property to the owners from whom it was taken, replace any property that was destroyed or repair any property that was damaged as a result of the taking.
Economic development is defined in the bill as taking private property without the consent of the owner a
Wrong. The utilities are getting an easment on the ROW, not the actual track itself, so there is no precident for what you are proposing. And CSSHEDWISCH is correct, the judge would overrule the case in a heartbeat.
I don’t think we need to use such extreme phraseology as “seizing”, but since you’ve gone ahead and framed it that way…
It ain’t that it would have an effect on interstate commerce, it’s whether the effect would be positive or negative regarding that aim. Our current laws are meant to prohibit restrictions to interstate commerce by the states (with the possible exception of bully California[D)], which seems bent on flaunting such laws). If said “seizure” resulted in a net benefit to interstate commerce, who’s to say it wouldn’t meet the legal criteria in principle?
An increase in competitive opportunities would certainly fulfill the spirit of pro-commerce legislation, while maintaining the status quo certainly fits the bill of commerce restrictions.
Consider some dream world, where Montana could seize the BNSF lines inside it’s borders. One inch outside of Montana, the tracks switch back to BNSF ownership. When Montana ships the first car of grain over the border, BNSF says “no thank you, we won’t be accepting any of your traffic, but thanks for asking.”[(-D]
This conversation actually occured in 1986. I no longer recall the provocation, I am sure it had something to do with Wheat, but the Speaker of the House of Representatives of the Montana Legislature, an old friend, sat down with me one day to discuss the proposition.
I would not object to have the government take it all over, so long as we were all bought out at market prices. If my prior experience with the USG’s way of doing business is any indication, my hourly rate would go WAY up.
If the feds deferred to the states as is done with federal highway and airport funds, then you’d be out of luck regarding that income boost. They’d use condemnation at assessed valuations rather than market valuations.
I have talked with a BNSF AVP and yes, they are looking a Montana as a spot to CTL plant. Negotiations are happening. Besides BN has former Northern Pacific land grant claims that have coal deposits on them and they own the mineral rights. Montana is looking to work with them at but their are some taxing issues. It will be interesting to see.
BNSF is never going to build a CTL plant in Montana or anywhere else in the US. It’s not their line of work, and it doesn’t fit into their mission statement.
They are more likely to build a CTL plant in China![;)]