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SD delegation presses railroads for better service

Rail cars transport oil from North Dakota's Bakken oil fields early in 2013. Demand to transport oil has rippled through the railroad industry and caused delays in shipping of grain and ethanol. (File photo)

North Dakota's oil boom and a tough winter are straining railroad companies past their limits, and South Dakota farmers and ethanol plants are feeling the pinch, Sen. John Thune, R-S.D., said Wednesday.

Thune has met with and sent letters to top officials at both Burlington Northern Santa Fe and Canadian Pacific railroad companies, saying railroad shipping needs to be a reliable service. The letters were copied to the federal Surface Transportation Board.

"I understand this winter has made it very challenging, but it's imperative in my opinion that railroads take more definitive action to ensure shippers can start moving their products to market," Thune said. "They need to restore adequate capacity to the region as quickly as possible."

So far this year, South Dakota experienced 8.5 percent of BNSF's 14,000 late rail cars in a four-state region, while North Dakota accounted for 46 percent, Montana accounted for 21 percent and Minnesota, 9 percent, reports Forum News Service.

BNSF Vice President for Agriculture John Miller told Forum Communications' Agweek that Sioux Falls and Aberdeen in South Dakota are considered "critical" due to challenges with line capacity and "resources."

Miller says those areas are affected by ongoing capital projects in Montana between Forsyth and Billings.

"As we know, winter wheat harvest is fast approaching," Miller told Agweek, foreshadowing issues during the harvest in states such as Texas, Oklahoma, Kansas and Nebraska, which typically starts in June. "In past years when there was plenty of available freight, we have been able to strategically preposition covered harvest to meet harvest demand. Due to the car order backlog we are currently experiencing, this year, we will have limited availability to preposition cars."

In his letter to BNSF, Thune wrote that disruptions in rail service have long-term effects on South Dakota businesses.

"Many in South Dakota depend on reliable rail service. It is how farmers, ethanol producers and other small business owners get their products to domestic and international markets," Thune wrote. "The disruptions they are facing have very real impacts on their businesses, not only in the short term, but also in their long-term ability to run efficiently and profitably."

Sen. Tim Johnson, D-S.D., said he looks forward to a hearing scheduled for April 10 before the Surface Transportation Board.

"We need to take a hard look at whether there is undue preference being shown to particular shippers," Johnson said, noting the intense demand from the North Dakota oil fields. "They should not be playing favorites. It's also important that the federal Surface Transportation Board monitor these issues."

Rep. Kristi Noem, R-S.D., said she is withholding criticism until a meeting today with BNSF officials. However, she said the rail cars need to start chugging to move ethanol out of storage as well as harvested grains.

"The weather this winter is not helping matters, but when the weather straightens out we need to get cars moving, get locomotives down here to move those cars," Noem said. "We've got to get it moved out before we hit another harvest season, and we need the space. This is key to our economy, being able to move our products. They have a commitment to do so, and we're going to make sure they do."