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North Dakota In Rail Emergency, Governor Tells Feds; Crude v. Corn

While crude oil from North Dakota moves increasingly by rail, Gov. Jack Dalrymple on Thursday told a federal transportation panel field hearing in Bismarck that his state is suffering from inadequate rail service for its multi-billion-dollar agricultural industry.

Dalrymple spoke at the opening of a federal Surface Transportation Board (STB) hearing, emphasizing that his state's agricultural industry is suffering this year from what he alleged to be substandard shipping services from BNSF and Canadian Pacific (CP) Railways.

While the increased shipments of crude by rail in the state's Williston Basin have drawn heavy industry and federal government attention (see Shale Daily, July 24; May 21), there also has been growing tension between the agriculture and oil/gas industries over the availability of limited rail and truck transportation services.

Farmers and some elected officials believe increased crude oil and freight shipments from North Dakota's oil fields in its western region have been the primary cause of agricultural shipping delays that Dalrymple told the federal hearing have reached "emergency" levels.

Since June, STB has required BNSF and CP railways to provide weekly reports on their efforts to reduce shipping backlogs. Dalrymple said in their latest (Aug. 29) reports, BNSF indicated it was averaging 10 days late in rail car arrivals, and CP said it was averaging about 13 weeks late.

Dalrymple and other state elected officials were particularly critical of CP because unlike BNSF, the company has not come up with plans to resolve the backlog. The state officials said they are waiting for an investment plan from the Canadian rail operator.

North Dakota State University recently completed a study showing that the rail shipping delays have caused at least $67 million in lost farm income on crops sold between January and April, and it also found the potential for another $95.4 million in losses following the current harvest, Dalrymple told the three-member federal panel.

The issue is worsened by the fact that the shipping problems come amid record levels of corn, soybean and wheat crops in North Dakota.

In the meantime, the state's Industrial Commission, on which Dalrymple sits as one of three members, is set to hold a hearing on what the state's role should be in increased scrutiny of crude oil rail shipments (see Shale Daily, Aug. 19).

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