Guest Editorial Week Of 7/18/2022

Michael Patrick Flanagan

Proposed rail merger would be bad for American energy

Gas in some parts of Chicago has recently been spotted at $7.29 per gallon – a crippling price for many drivers. Unfortunately, such sky-high energy prices are all part of the Biden Administration’s policy goals; a piece of the “incredible transition,” as the President put it, away from fossil fuels.
In fact, one of the first things Joe Biden did as President was cancel the Keystone XL pipeline, citing special interest-driven environmental and safety concerns that were previously dismissed by federal regulators when approving the pipeline. Biden also bowed to the environmentalists who maintained that the Canadian oil the pipeline would carry was too dirty. This caused the U.S. to lose its energy independent status and constricted the market (along with Russian sanctions and federal restrictions on new drilling on and offshore), ultimately driving prices up.
In response to these high prices (and perhaps while thinking about November), the Biden Administration is now looking to our northern neighbors to provide us with the once-rejected energy we need to keep our economy moving. However, the Biden Administration still can’t bring itself to use pipelines such as Keystone XL, that are the most safe and effective way to move the gas and oil south. Instead, we will have to increasingly rely on freight rail to transport the newly-acceptable Canadian oil and gas. The new rail network that would be created by the proposed Canadian Pacific-Kansas City Southern (CP-KCS) railway merger, a controversial project currently under review by federal regulators, would likely play a major role.
Given this renewed interest in Canadian oil and gas, it is curious that the administration has been quiet about this hefty $31 billion merger while all the while claiming to be concerned about the “environmental risks” of transporting oil. Maybe their animosity towards pipelines is so strong that they are unwilling to consider the facts. Some have even speculated that they are looking to rail mergers as cover to kill more pipeline projects.
While rail is an important tool to fill gaps in energy transportation networks, pipelines are universally preferred, as they have historically proven to be the safest way to transport oil. In fact, a study from the Frasier Institute found that rail is 4.5 times more likely to experience an accident transporting fuel than pipelines. Canadian Pacific itself, for example, has had a history of accidents and derailments.
Chicago is the national rail hub and congestion has been managed – barely – for decades. But this merger may pose unforeseen problems for the Windy City. The specter of a large increase in the number and size of trains may be more than Chicago can bear. The old rule of thumb about transcontinental trains was “three days to Chicago from one coast, three days from Chicago to the opposite coast and three days trying to get across Chicago.” The new saying might quote more than three days through Chicago as massive and numerous oil trains heading to refineries on the Gulf Coast from Canada may trap goods at this key juncture and exacerbate the already critical supply-chain issues our nation is facing.
This merger would also disrupt the Metra system, which has seen more residents turn to it as automotive gas prices keep climbing. Metra shares track with Canadian Pacific on two of its routes. However, Metra contends the track they own “cannot accommodate” the additional trains the merger would bring. Further complicating things, Canadian Pacific and Amtrak have also made a tentative deal to expand Amtrak routes in the area if the CP-KCS merger is approved and could further worsen congestion. For railroad communities outside of Chicago, meanwhile, the merger itself could boost train traffic up to 50 percent more and mean longer trains. This is a safety concern for critical surface road traffic. An ambulance or police car stuck at a blocked, at-grade railroad crossing could cost someone’s life.
All of these concerns have driven the commuter rail operators to openly come out against the merger, emphasizing that it will bring delays, prevent expansion of services, raise safety issues and increase infrastructure costs. Metra contends the operating plan cited by CP-KCS is riddled with errors and is unworkable. Their own projections, which considered the modeling usually performed for such merger transactions, conversely found that increased traffic from the merger will “break the rail system.” At the very least, CP-KCS must provide more forthright data addressing these discrepancies before this merger can move forward.
A pipeline provides a clear solution to meet America’s energy transportation needs that is safer, less disruptive and avoids many of the other concerns surrounding this rail merger. The politics that may push this merger through without proper consideration, as the Surface Transportation Board may be set to do, will work to the detriment of Chicagoans and the American people. It deserves a closer look.

Michael Patrick Flanagan previously represented Illinois 5th District, which included large parts of Chicago, in U.S. Congress


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