The producers of more and more commodities — from wheat to washing machines — are turning to railroad companies to bring their products to market, so much so that Burlington Northern Santa Fe Railway Co. traffic is almost back up to its peak 2006 pre-recession level.
Members of the League of Women Voters of Billings and a handful of visitors hearing from a BNSF official Thursday wanted to know what that recovery will mean for Billings-area train traffic — especially those trains hauling coal and crude oil.
It’s hard to say, Matt Jones, the company’s regional director of public affairs, told a gathering of more than 40 people gathered for lunch at the Elks Lodge.
The crowd included league members as well as representatives of the Northern Plains Resources Council, which plans to release an update next week on a 2012 study that estimated what heavier train use might mean for communities along BNSF’s 32,500 route miles, including Billings.
“It will all be determined by demand in the markets,” Jones said of the potential growth. BNSF does not project increases for specific commodities traveling along particular routes, he said. “Some projections have reported dozens of additional coal cars coming through Billings. Is that realistic? We think not. But does BNSF think traffic will increase? Yes. That’s why we want to plan for incremental growth over time, and it’s why we want to talk to communities about planning and investing in infrastructure.”
Current train traffic through Billings, handled by Montana Rail Link, averages about 18 trains per day, Jones said.
Asked how much the company is willing to contribute toward local infrastructure improvement as train traffic increases, Jones said that while he can’t speak for Montana Rail Link, “the city has reached out to both of us to have a conversation about traffic through Billings.” Building an underpass or overpass is “a long, difficult, expensive process,” he said, and “we want to work with communities to understand what the need is and to identify funding sources.”
He said the company plans $5 billion in infrastructure spending during 2014 and has invested $470 million over the past three years in Montana. It plans to add about 400 workers to its 2,300-member Montana workforce this year, the majority in Eastern Montana, including Forsyth, Glendive, Glasgow and Havre.
Not only is Bakken oil production up by almost 300 percent over the past three years — from 340,000 barrels per day in 2010 to about 1 million in 2013 — much more, about 70 percent compared to 6 percent in 2010, is now being transported by rail.
But all that business doesn’t necessarily mean the company opposes construction of the Keystone XL Pipeline, Jones said.
“The increase in Bakken production and in other shale formations is transformative,” he said. Some experts predict North America will be energy independent by 2020, he noted. “To transport that amount of crude-related products to markets, you will need a robust pipeline and rail infrastructure,” he said.
The nation’s second-largest railroad, purchased four years ago by Warren Buffett’s Berkshire Hathaway Co., announced recently it plans to purchase 5,000 stronger and safer tank cars. “That’s a big deal in the industry,” Jones said. “Most tank cars are owned by oil and leasing companies. To move the ball forward, we want to make sure we’re using the safest equipment possible.”
Hauling crude oil represents about 4 percent of the company’s business. About half the company’s revenue comes from carrying consumer goods. A double-stacked train full of consumer products hauls the equivalent of 280 truckloads. Rail is “by far the most efficient form of ground transportation,” he said.
Ruth Blott, a league member who lives in Billings, said she found Jones’ hourlong presentation interesting, “but he dodged or worked his way around some of the questions that were asked about the amount of (rail) cars that would be going through Billings,” she said. “He also didn’t take responsibility for helping Billings figure out something to do so that trains won’t interrupt commerce in Billings.”