Railroads and the Chemical Fertilizer Business

Trains Magazine General Discussion
1

I was searching for information on rail transportation of fertilizer today and learned something interesting about ammonia and railroads. (As background info, ammonia is used as a chemical fertilizer by farmers.) What I learned is that because of the hazards of ammonia, it is a huge liability to the railroads. So apparently, they either want protection from the liability, or else want out of the business.

Farmers, on the other hand, want the railroads to stay in the ammonia business. Without railroads, their shipping costs go up. They also argue that railroads are obligated as common carriers to carry the ammonia. Here is a quote that states their case:

“Anhydrous ammonia is a vital and essential plant nutrient that is critical to the nation’s food supply,” stated NCGA President Ron Litterer. “Rail is the safest and most efficient method for transporting this critical agricultural product.”

According to the Interstate Commerce Act and reaffirmed by the Staggers Act, railroads cannot be selective in determining which commodities to transport based purely upon their self-interest. NCGA believes that while the STB may have an advisory role in making recommendations to Congress on railroad common carrier obligation, only Congress has the authority to change this obligation.

“Anhydrous ammonia is an essential agricultural nutrient used to grow the nation’s food supply,” the letter continued. “With increased concern over escalating food prices, as well as food shortages around the world, it is critical that American farmers have anhydrous ammonia when and where they need it.”

Link: http://colora

2

The only issue farmers really care about is getting nitrogen to certain types of plants such as corn. There are many sources of nitrogen such as urea, nitrogen fertilizer solution, DAP and MAP that are not hazardous. If there is a derailment at two in the morning and a product releases these products have the distinct benifit of not killing people in their beds while they sleep. Anhydrous will kill people. If Anhydrous were banned farmers would still have many many of applying nitrogen fertilizers to their crops.

The lawyers will be arguing about the common carrier issue for years. My guess railroads will be required, as common carries, to carry this stuff but they will also be able to recover their special costs of handling such as extra insurance and Positive Train Control (PTC). It is my understanding if you have a branchline somewhere in Iowa that does not handle any passengers but does handle grain, non hazardous fertilizer and anhydrous ammonia the railroad will be forced to spend money to install PTC on the line. If my understanding is correct, it would seem to be common sense that the grain shippers on the line not be forced to pay for the PTC caused by another shipper.

3

About a year ago, the UP asked the STB for permission to not provide rail service for clorine shipments from Utah to the Gulf Coast. I don’t think I ever saw the outcome. Was that permission granted or refused?

4

I believe it was refused.

5

Who owns the tank cars that carry the anhydrous?

A quick web search shows that many cars are owned by independent car leasing companies.

Do the chem or fertilizer companies also own some tank cars?

I never see tank cars owned by railroads. How come?

6

Tank cars, for the most part are prevented from handling multiple commodities as the residue from one will contaminate a different commodity. Because of the restricted use of these types of cars the railroads have never seen fit to invest scarce capital in acquiring these types of cars.

Secondly, the contents of tank cars, at the consignee’s plant are used as a integral part of the consignee’s production line, be that chemical or manufactured products. In such service cars may take many days to empty.

Tank cars and their product are normally ‘Trip Leased’ between the Shipper and Consignee, with the requirements and payments of that lease being between the parties involved. The lease will specify such things as how much $ it will cost the consignee for time needed to unload the car beyond a specified time. On railroad equipment this is called demurrage.

Where the carriers are looking to get 2 or more round trips a month on railroad cars in assigned servcie between shippers & consignees…the turnaround on tank cars is a great deal less.

7

Rails,

What, if any premium railroads should charge for Hazardous Materials, is a very old arguement. When I started with the Bureau of Explosives in 1974 the carriers could not reliably identify haz mats by Standard Transportation Commodity Code (STCC) which is what drives the descriptions printed on computer generated waybills and is the basis of all the marketing departments’ reports and analysis.

When the 49 series STCC was introduced some of the railroad’s own marketing people were opposed to the idea because it enabled correct identification on their reports and allowed analysis of the question. Simply put they did not want to rile up the shippes by demanding a higher rate. The smarter ones recognized that it might be a good idea to know what risks the carrier was assuming on a material by material basis.

By 1974 the carriers figured out that some compressed gasses presented unique risks. Soon thereafter the Hazardous Waste regulations came along from the EPA. The important risk the railroad took was the cost of disposal when a hazardous material was released.

Then there was the Spent Nuclear Fuel rate case. The Federal Government had committed to the disposal site still not built in the Nevada desert. The NRC, the utilities, and the Railroads were all thinking about moving significant volumes of highly radioactive nuclear material. Prior to and at that time such material had moved in DOD special train service with armed guards. The DOT and NRC designed supposidly impenitrable, unmeltabe casks to ship high level waste in and envisioned moving this stuff all over in regular train service. The railroads were not keen on that idea and wanted special train service only, and wanted to be paid for it. The case went to the ICC who basically said to the railroads "You willfully and gleefully haul far worse things already. You can provide special train service if you want, but you have to charge much

8

Anhydrous ammonia has (NH3) traditionally been the cheapest form of nitrogen fertilizer available. There are fewer 5 MPH branch lines than 40 years ago for NH3 cars to waddle down. How much NH3 now goes to large rail terminals for regional distribution? If a stiff surcharge for transportation is imposed, will it kill any cost advantage?

In addition, NH3 is used to make meth. Conservation Commissions in the Midwest issue warnings when hunting season commences. Hunters, beware of meth labs in remote locations. Never open a thermos bottle found lying around anywhere in the field.

Extra lighting and security is found around NH3 storage because of the meth problem. One entrepreneur held his thermos between his thighs. When the hose to the bottle flew, Mr. Entrepreneur’s Happy Hose was frozen off. He may have been blinded and choking at the time.

This is no product to get careless around. Does anybody know if theft for meth while in transport has been a concern for rail carriers?

9

Anhydrous Ammonia was the hazmat that was released in the CP derailment just outside Minot, ND, 7 or so years ago that lead to one fatality (not an employee) and lawsuits that are still on going. It will also be a big determinant on which lines will receive PTC. I haven’t heard of an attempt to steal any from a railroad, but that doesn’t mean that someone hasn’t tried it yet. It was a big problem for the local Farmer’s Coop. No they have a large enclosure top with razor wire, lots of lighting, and security cameras. At a significant expense.

10

As a group of resources; Try "Googling’ Railroad Transportation of T I H Products

That should bring up several PDF files of appropriate documents on this interesting subject by both Government agencies but also some academic resourced papers as well.

11

’

It was refused. But this isn’t the end of the story. UP recently aske the Board to require separate reporting of the costs irailroads incur for tranporting “toxic by inhalation” (TIH) commodities. While I I have no information on why UP did this, a reasonable explanation is that UP is creating a record for passing these costs on to the TIH shippers in some form or fashion.

12

When I hauled OTR tankers the 3 loads I hated to haul in Order were Chlorine Gas, Anhydraus and Exposives. Why those 3. They are the 3 that if yourhauling them you know that Every DOT man has a target on your hide. Worse one is the Chlorine gas. That stuff will give you a headache thinking of it. the Anhydraus is not to bad however the freaking tankers of it are a PITA to load or unload. The worst one is however is anything that likes to go BOOM. When you hauling that stuff you better not think of screwing up with 40K lbs of 1.1 on that will explode with some the things my father and I hauled as a team and it does require teams on that stuff if looked at wrong.

13

Ed I haul 1.1 thru 1.4 all the time and the DOT hardly ever looks at me. If fact they seem to try and stay away.

One thing about hauling things that go BOOM, you will never know what happened. I never worry.

14

Did not help that the DOT hated my bosses company and always wanted to see what the heck we had on. That and the fact that half the time the DOT was told leave us alone by the FEDs made them kinda mad at us.

15

Reverting to rail haulage and an earlier question, I suspect the short lines in general do not perceive the same level of risk as the majors. The difference is speed. At 10mph the tank is unlikely to be punctured in any derailment short of a tall bridge collapse.

The Class 1’s in contrast are hauling the cars in heavy trains at 50-60mph and the resulting forces and impacts in a derailment or collision increase significantly. Even then the scattered tanks virtually always remain intact, but a very slight risk now exists. Lawyers know all about the costs and rewards of liability lawsuits against big profitable companies.

Also factoring into the equation, nobody will get rich suing a true short line. They are often living hand to mouth and the dollars are just not there. It is academic what the jury awards. The short line empires with multiple railroad assets will be more vulnerable…

My opinion; those with more direct knowledge please amend if necessary.

John

16

It is not a good idea to call anhydrous ammonia just anhydrous, since there are other chemicals that are anhydrous. A check of the ERG brings up 25 other chemicals with anhydrous in their names.

Hydrogen Bromide, Anhydrous

Hydrogen Chloride, Anhydrous

Hydrogen Cyanide, Anhydrous

Hydrogen Fluoride, Anhydrous

Methylamine, Anhydrous

Dimethylamine, Anhydrous

Trimethylamine, Anhydrous

Potassium Sulfide, Anhydrous

Sodium Sulfide, Anhydrous

Chromium Trioxide, Anhydrous

Aluminum Bromide, Anhydrous

Aluminum Chloride, Anhydrous

Difluorophosphoric Acid, Anhydrous

Ferric Chloride, Anhydrous

Fluorophosphoric Acid, Anhydrous

Stannic Chloride, Anhydrous

Hydrazine, Anhydrous

Chloral, Anhydrous, Stabilized

Hydrogen Iodide, Anhydrous

Hydrogen Selenide, Anhydrous

Zinc Chloride, Anhydrous

Ethyl Phosphonous Dichloride, Anhydrous

Ethyl Phosphonothioic Dichloride, Anhydrous

Sodium Peoxoborate, Anhydrous

1-Hydroxybenzotriazole, Anhydrous, wetted with not less than 20% water

17

Sorry the Boss I pulled NH3 for only pulled that for. I am aware of all the other kinds but around here when we say Anhydrus everyone know your talking Ammonia since this is fram country. Heck you can say I need 3 tanks of Anhydruas at the local FS and they will deliver that and the freaking plow needed to spread it to your fields in less than 1 day.

18

The Federal law mandating PTC treats everyone equally- Class I and shortlines.

19

In the laugh column what about Anhydrous H2O?

Thx IGN

20

On the serious side Anhydrous Ammonia is pretty nasty (no I do not haul poison gasses of any type)

As to theft, in addition to farm supplier thefts, their have now been several attempts to steal anhydrous ammonia from cold storage warehouses(it is used as a refridgerant). No material was actually stolen to my knowledge. Regrettably the attempts have caused spillage. No major disasters yet.

I will say that the transportation of these materials is more due to the requirements of a shipper and or receiver and their perceived liabilities than anything else. ie Their fear of a lawsuit if something goes wrong,

Rgds IGN