STB Meets in Washington To Consider Texas Proposals

14 December 1998 00:00  [Source: ICB Americas]

By Don Richards

Surface Transportation Board will meet in Washington on December 15 to hear arguments from Chemical Manufacturers Association, Society of the Plastics Industry and others over whether Union Pacific Railroad should be forced to sell off some of its properties to foster greater rail competition in the Gulf Coast region.

The hearing is a result of filings with the federal agency by Burlington Northern & Santa Fe Railway, Texas Mexican Railway and a consortium of businesses and agencies in Texas (CMR, 10/5/98. pg. 5).

Because of a service meltdown last year after Union Pacific merged with Southern Pacific, producers of chemicals and plastics want another railroad, such as Kansas City Southern and its affiliate, Texas Mexican Railway, to be able to compete in the Houston area.

Further, a consensus plan for rehabilitating rail service in the Gulf Coast calls for neutral switching and dispatching along the Houston Ship Channel, constructing a new Houston-Beaumont line and the reestablishment of an abandoned line from Houston to Victoria.

Defending the plan at the STB hearing will be CMA, SPI, Dow Chemical, DuPont, Formosa Plastics Corporation USA, Tex-Mex, Railroad Commission of Texas, BNSF, and Houston & Gulf Coast Railroad. Opposing the plan will be Union Pacific.

In Houston, meanwhile, Canac Inc., a Montreal-based supplier of rail services, is drumming up business among Gulf Coast chemical producers for its "one-stop-shopping" expertise. The company will soon open a Houston office.

Guy M. Archambault, senior vice-president for marketing and sales for the affiliate of Canadian National Railway, says that interest in Canac's services in the Gulf Coast area "was zero in June," but the company is "now working...on 15-to-20 proposals in the Louisiana-Texas corridor."

Canac's success is being driven by an economic downturn in chemicals as well as fears of further service disruptions. Mr. Archambault notes that the chemical industry is in a slow-growth period because of the Asian crisis, and prices are their lowest since 1994, forcing companies to reduce their costs as much as possible.

He says his firm offers a bevy of services under one umbrella, including cost-cutting measures through the management of industrial rail operations from design to day-to-day operations.

Chemical manufacturers currently manage their own intraplant switching using their own locomotives, or they hire third-party contractors for track repair, locomotive maintenance, car switching, loading, unloading and washing.

Canac specializes in railroad software packages for switching and other purposes. "Companies may spend millions throughout the supply chain but are still checking cars in-plant with pencil and paper," Mr. Archambault says, noting that Canac's software packages are Y2K compliant.

The Canac vice-president adds that his company can come into a plant, examine all phases of rail operations and draw up an operating plan. "If six locomotives are doing it now, maybe it can be done with four," he says.

Houston Roundup

HUNTSMAN VIOLATIONS: Texas Natural Resource Conservation Commission has referred what it terms "a large and serious air pollution case" to the Texas Attorney General's office.

TNRCC says the case involves numerous alleged violations at Huntsman Petrochemical Corporation's plant in Port Arthur, including operating equipment without a permit, excessive emissions of benzene and volatile organic compounds (VOCs), failure to replace malfunctioning equipment, and failure to report emissions to the TNRCC during so-called "upset" conditions.

According to TNRCC, the Huntsman facility was responsible for almost 13 percent of the reported VOC emissions in the entire nonattainment area of Jefferson, Hardin and Orange counties in 1996.

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly