The American Coalition for Ethanol (ACE) is urging leaders of the Senate Commerce Committee to support S. 2777, the Surface Transportation Board Reauthorization Ace of 2014. In a letter, Brian Jennings, executive vice president for ACE writes U.S. corn-based ethanol is the most economical transportation fuel in the world. And when factoring in its favorable blending economics along with the Renewable Fuel Standard (RFS), ethanol is capable of comprising more than its 10 percent share of the U.S. gasoline market.
“But in order to do that, reliable and timely rail service is critical,” the letter states. “Unfortunately, during most of 2014, railroads have failed to provide reliable and timely service. Logjams built-up this winter due to extreme cold and snow which reduced the speed and size of trains, and all year long it has appeared that railroads have provided favorable service to crude oil shipments at the expense of ethanol and agricultural commodities….”
“Many of ACE’s ethanol producer members are captive shippers and have reported chronic rail service disruptions this year, such as delayed tank car arrivals, insufficient tank cars received for ethanol off-take, loaded cars parked and overdue for power to arrive, and turn-around times that have doubled. As a result, storage tanks at ethanol plants are full and many of our members have been forced to slow production or worse yet, shut down operations at a time when demand for ethanol is on the rise because of its low price and clean octane benefits, writes Jennings.
The letter continues, “To cope with unreliable rail service, some biorefineries have invested in additional storage or considered adding unit train capability, but it is hard to justify those investments without meaningful commitment by the railroads that service will improve. Moreover, we are concerned that a record harvest of corn and soybeans this fall could make a bad situation on the rails even worse.”
Jennings notes that while the S. 2777 does not immediately nor comprehensively overcome all the problems, it is a step in the right direction.