Letter from the Editor

By Mark Szakonyi

The idea of interlining trains switching to cleaner locomotives at the California border seems preposterous .

BNSF Railway ’ s planned $ 1.5 billion complex in inland Southern California would ease pressure on the nearby ports by reducing local truck hauls , thereby cutting emissions and costs for supply chains moving through the largest US import gateway .

The twist is that state environmental regulations could derail , or at the very least stall , the 4,100-acre project unless federal regulators step in . BNSF aims to have the facility — roughly 130 freeway miles from the ports of Los Angeles and Long Beach in Barstow , Calif . — running in 2027 . But the railroad and broader Class I industry say the pace at which California is mandating the phase-out of diesel locomotives is too fast , making the project infeasible .

The US Environmental Protection Agency ( EPA ) ultimately makes the call on engine standards for transportation not moving via highways . The California Air Resources Board ( CARB ) is asking the EPA to grant it a waiver so that it can fully implement the new mandate that took effect earlier this year .

The Barstow project could move the needle for persistent cargo pressures at the Southern California ports by reducing the truck drayage in the port complex and shifting the assembling of trains far from the marine terminals , said Larry Gross , an intermodal rail expert and Journal of Commerce analyst .

While the project offers potential to cut truck traffic , California regulators are ushering in far bolder changes . New state regulations require all locomotives to operate by 2030 with engines no older than 23 years . The only exception is for so-called Tier 4 locomotives , built in 2015 or after , and producing up to 70 % fewer emissions than standard models .

By 2035 , railroads operating in California will need to be emission-free , according to the regulation that took effect at the start of this year . BNSF and fellow Class I railroad Union Pacific must each kick in up to $ 800 million annually , according to various rail industry estimates , toward an account for zero-emission locomotive purchases . BNSF can point to recent efforts with state officials to develop and test electric locomotives on shorter hauls such as a 350- mile leg between Barstow and Stockton , Calif .

The railroad says it will be forced to reconsider the Barstow project if the EPA grants a waiver to state regulators allowing them to enforce the new regulation . BNSF CEO Kate Farmer this spring warned at the North American Rail Shippers Conference in Chicago that other states would follow California if the EPA granted the waiver .

The EPA is under no deadline to respond to the waiver request even as the US House of Representatives in early July urged the agency to reject the CARB ’ s request . Importantly , the rail industry isn ’ t likely to let an unfavorable EPA decision stand , most certainly marshaling legal defenses .

The rail industry argues the technology to consistently power 4,300 horsepower capable of hauling up to 14,000-foot trains for thousands of miles is still years away . CARB counters that the railroads haven ’ t done enough to deploy cleaner locomotives , pointing out that the technology has been available since 2015 .

At millions of dollars for a single locomotive , the rail industry has been squeezing the most out of its assets , but the challenge of powering longer trains on electricity is steep . CARB testing earlier this year found that battery-electric locomotives could handle a 130- car double-stacked train from the port of Los Angeles to Barstow . But the analysis was done on paper and based on hypotheticals rather than being tested on the track repeatedly .

The mere idea of interlining trains having to stop at the California state border to switch to cleaner locomotives seems preposterous from an operational standpoint .

Federal priorities tend to trump state ones , particularly when tied to the interconnectedness of the national freight railway system . The US Department of Defense told the EPA in a March public comment that the CARB rule endangers the rail readiness of US armed forces . The concerns of California environmental regulators about the health impact of locomotive emissions are well-founded even if their emission-modeling is dependent on major strides in locomotive technology for longer-haul trains . Tightening locomotive regulation will decrease cancer risk to emission exposure by up to 90 %, according to CARB .

However , CARB ’ s conclusion that trucking will be just as environmentally friendly as rail hinges on the electrification of the former and ignores the economies of scale railroads benefit from , thus reducing overall emissions past the state ’ s borders . Piecemeal efforts by states to regulate emissions produced by rail and trucking across state and national borders are bound to cause complications .

email : mark . szakonyi @ spglobal . com

4 Journal of Commerce | September 9 , 2024 www . joc . com