US energy chief warns of rail capacity crisis

18 July 2007 19:39  [Source: ICIS news]

By Joe Kamalick


US official warns of rail shortageWASHINGTON (ICIS news)--US Energy Secretary Samuel Bodman said on Wednesday that constraints on US railroad capacity constitute a critical choke point in US energy development.


Bodman made the comment in a press conference following a meeting with the National Petroleum Council, a private sector advisory panel chartered by the department. The council meeting approved the results of a nine-month study of US energy options, finding, in part, that the US will continue to be dependent on oil, natural gas and coal as principal energy resources through 2030.


US chemical manufacturers are dependent on natural gas as a feedstock and energy source, and increasing domestic demand for gas has helped push prices up over the last five years.


Bodman’s comment on constrained US rail capacity came a day after the principal US rail regulator, the Surface Transportation Board (STB), established its own advisory council of rail operators, energy producers and consumers to study problems facing the rail movement of energy products such as coal and ethanol.


US chemical industry representatives argue that railroads’ failure to deliver sufficient quantities of coal to electric utilities over the last two years has forced power companies to put further demand on natural gas as a turbine fuel.


Earlier, the US Government Accountability Office (GAO), a federal watchdog agency, found that the ability of American railroads to meet anticipated freight demand from increased ethanol production is uncertain.


The GAO study faulted the Department of Energy for not developing a comprehensive approach to expanding US biofuel distribution and infrastructure to match programmes designed to accelerate domestic ethanol production.

By: Joe Kamalick
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