Railroad Lobby: 15 Percent Boost

Grain railroad cars in Jeffersonville, Indiana.

Photograph by Luke Sharrett/Bloomberg

Grain railroad cars in Jeffersonville, Indiana.

Railroads are doing what companies do when they’re faced with a government regulation that could add to the costs of doing business: Spending more on Washington lobbying.

The Association of American Railroads, which represents rail lines like Berkshire Hathaway Inc.’s BNSF, spent $3.61 million so far this year, about a 15 percent increase from the $3.12 million it had spent over the first six months of 2013.

Companies spend thousands of dollars on advocacy in hopes of saving millions or billions in their business operations.

The latest lobbying figures come from the Senate, which releases lobbying spending totals every quarter. The publicly disclosed forms don’t separate spending by issue, and railroads also lobby on issues like transportation spending.

It’s clear though that rail safety is an issue of pressing concern.

Transportation Secretary Anthony Foxx said yesterday that a rule designed to make oil trains safer would be released “very soon,” as the administration tries to ease concerns following a series of fiery accidents involving oil trains including one in Quebec last year that killed 47 people.

What’s at stake is the future of a business that’s boomed alongside U.S. oil production in places like North Dakota’s Bakken field, where pipeline capacity is lacking. Regulators have to balance safety with the benefits of more U.S. produced crude, which include jobs and tax revenue windfalls.

A stream of industry representatives have met with White House officials who for weeks have been reviewing a draft rule from the department. Railroads haul the oil and want regulators to require a tougher tank car that’s more resistance to punctures than an older model in wide use known as DOT-111s.

They’ve warned against further reductions in speed limits on tracks, after agreeing to slow down to 40 miles per hour in urban areas earlier this year. Tapping the brakes anymore could create bottlenecks on lines that are often single tracks, requiring expensive fixes.

Companies that own the tank cars, including GATX Corp. in Chicago, have argued that while tank car fixes may be necessary, the quickest way to improve safety is by updating railroad operations and ensuring the fuel carried isn’t especially volatile.

Refiners were the latest to make the case. In a meeting yesterday at the Office of Management and Budget, lobbyists expressed concern a mandated phase-out of the DOT-111s would outpace the industry’s capacity to build replacements or perform required retrofits, according to one person familiar with the presentation.

The Transportation Department’s proposal won’t end the matter. As a draft, a public comment period will follow its release. That’s when the lobbying could really pick up.


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