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Oil-By-Train or Grain-By-Train?

A BNSF Oil Train en route

It’s not carrying grain anymore.

Farmers are experiencing great crops in the midwest this year, but are having difficulty getting their products shipped by train since the trains are hauling oil.  According to the NYTimes that’s what’s happening, “leading to millions of dollars in agricultural losses and slower production for breakfast cereal giants like General Mills.” And farmers expect things to go even further downhill as they achieve “a record crop of wheat and soybeans.”

Some farmers may have ordered more rail cars than they really need as Canadian Pacific Railroad claims, but if that were the case you’d think we’d be hearing about empty railcars sitting around waiting to be loaded up with something other than grain or soybeans or sugar beets. Warren Buffett’s BNSF’s executive chairman related the more likely scenario, “Of course, the big difference is what we are shipping these days is oil.” Then he added, “But we aren’t favoring one type of product over another.” No, of course not, they’re just shipping oil, that’s all.

Remember that back in July 2013, the Canadian ambassador to the US, Gary Doer, warned President Obama “if he does not approve the controversial Keystone XL pipeline, then he can expect similar oil trains [referring to the ones involved in the Lac-Megantic disaster] and even trucks to enter the U.S.”

Well, that’s one promise kept.

What choice is there at the moment since conversion to safer rail cars is not mandated by either the US or Canadian governments for another couple or so years (here and here)? Moreover, the companies raking in the oil bucks in ND’s Bakken are resisting using stabilizers to make the oil less volatile, although “industry experts and energy executives” reportedly are reluctant to make this point in public “for fear of antagonizing the companies that do business in North Dakota.” Stabilizers, now commonly used in TX to make the highly flammable oil more stable for shipment,  “could cut potential revenue by perhaps 2%” in ND. Heavens to Betsy, where are my smelling salts?

No doubt there’s more to this story,  and many explanations and excuses to be made. Mainly, though, there’s the perceived arrogance of pushing the oil through to market by train—and leaving us to pay even higher prices for bread and cereal at the local grocery store.

Adding insult to injury, we learn that Warren Buffett, who owns BNSF, is helping finance Burger King’s move to avoid paying US taxes by buying Tim Hortons Inc and creating a new company in Canada, which has lower corporate tax rates.

Photo by Roy Luck released under a Creative Commons license.

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