2013 Year in Review from Transportation Law Today

2013 will likely be remembered for several significant transportation events, including the Lac Megantic and Metro North rail accidents. As I write today on New Year's Eve an active fire from a train crash and derailment involving crude oil is taking place in Casselton, North Dakota (here is the NTSB's initial press release). The event in South Dakota highlights other major trends from 2013: positive train control and the carriage of crude oil by rail. Finally, a review of 2013 would not be complete without a mention of the regulatory and political environment, significantly because some-what bi-partisan WRRDA bill (which many had great hopes of passage in 2013), will wait until 2014.

MAJOR RAIL ACCIDENTS

The June 2013 accident which destroyed a significant portion of the town of Lac Megantic, Quebec, and claimed over 40 lives, spurred quick action by Canada's rail regulator, and reciprocal action by the FRA. My prior posts explained some of those actions here, and here.

Following Lac Megantic efforts were made to address the classification of crude oil carried by rail, which may again gain more attention given the on-going situation in North Dakota. Crew size was another issue in Lac Megantic, which the regulators also addressed in the context of securing haz mat trains.

The December 1 Metro-North accident in New York city also raised crew size questions, as well as positive train control implementation. See my prior post here.

Although neither the Lac Megantic nor Metro-North accidents have had their investigations concluded, information released indicates likely causes: failure to secure the train on a grade (Lac Megantic), and crew error in Metro-North. Coming in 2014 will be the Rail Safety Advisory Committee recommendations following Lac Megantic, and possibly, action on the Commuter Rail Passenger Safety Act proposed shortly after the Metro-North accident.

POSITIVE TRAIN CONTROL

The state of Positive Train Control, and the current 2015 deadline for implementation, will continue to be a hot topic in the coming year. Even though the GAO acknowledged that many railroads could not meet the 2015 deadline, it seems unlikely any wholesale moving of the deadline will occur given recent high profile train accidents. My best prediction is that some case by case relief for portions of PTC systems or tracks may be granted in an effort to get operational as much as possible by 2015.

CRUDE BY RAIL

I expect growing regulatory and public attention to crude by rail shipments, again highlighted by what is currently happening in North Dakota. Crude by Rail, as with Haz Mat by rail, is clearly a safe mode of transport given the huge volumes moved without incident. However, when accidents occur they tend to be memorable given the product being moved. On-going efforts from the RSAC on operational issues, as well as a renewed focus on tank car safety standards will certainly continue.

WRRDA I HARDLY KNEW YA

Now to the blue and brown water worlds... the continuing fate of the now-termed WRRDA bill and its path through a divided congress will continue into 2014. The bill's remedy for the monumentally over-budget Olmstead Lock and Dam project, aka the "Kentucky Kickback" seems to have survived some initial hype when the deal emerged as part of the government shut-down end. Both houses of Congress have appointed conferees to iron out differences between the Senate bill passed in May 2013, and the later house bill.

Is WRRDA an example of a deeply divided congress prioritizing infrastructure investment? Perhaps, but it also may be low hanging fruit in the sense that WRRDA is what could be accomplished in a bi-partisan way with relatively little controversy. In any event, the bill has yet to be passed by congress, which is likely to happen in early 2014.


Thanks to our readers and best wishes to all for safe and joyful New Year in 2014.

- Paul J. Loftus, December 31, 2013

Nearly $3 Billion in Budget Deal Slated for Olmstead Lock and Dam Project

Who said earmarks are dead? Tucked into yesterday's long-anticipated Congressional deal to raise the debt ceiling and end the government shut-down was this seemingly innocuous paragraph:

"Sec. 123. Section 3(a)(6) of Public Law 100-676 is amended by striking the occurrences of "$775,000,000" and inserting in lieu thereof, "$2,918,000,000."


PL 100-676 is the WRDA bill of 1988, which originally authorized the Olmstead lock and dam project at $775 million. The now-approved budget resolution more than triples the authorized expenditures for the cost overrun plagued project on the Ohio River. As you can see from the text of the joint budget resolution, it was not exactly a "clean" resolution, with various other individual funding provisions (including $186 million for Maritime Security - sec. 152).

With the ink apparently still drying in the budget deal, some have already referred to the Olmstead provision as the "Kentucky Kick-Back."

See also, my earlier post on the draft WRRDA bill which attempted to free the Inland Waterways Trust fund from essentially funding only the Olmstead project given its huge costs. Presumably funding Olmstead via the budget resolution solves the problem of Olmstead monopolizing the Inland Waterway Trust Fund.

Bi-Partisan House WRRDA Bill Rolled Out

The House Transportation and Infrastructure Committee has rolled out the long-awaited Water Resources Reform and Development Act (WRRDA, formerly WRDA - "reform" is new) yesterday. Bill H.R. 3080 is sponsored by Chair Bill Shuster (R-PA), Nick Rahall, Committee Ranking Member (D-WV), and Bob Gibbs (R-OH) and Tim Bishop (D-NY), both members of the Water Resources and Environment Subcommittee.

The public relations blitz surrounding the bill's release is impressive, consisting of a press conference, press release, a colorful summary of the bill's expected accomplishments, as well as a "white-board" video, narrated by Chairman Shuster extoling the benefits of the waterways to the U.S. economy and the virtues of the proposed bill. Finally, a full text of HR 3080 is attached here.

This legislation, if passed, would be the first WRDA bill since 2007. Among the reform provisions are a deadline and monetary cap on U.S. Army Corps of Engineers' studies, a streamlining of environmental reviews, and reform of the Harbor Maintenance Tax Trust Fund and the Inland Waterways Trust Fund. For the HMTF, the bill sets target expenditures of up to 80% of HMT revenue by 2020. For the Inland Waterways Trust Fund (IWTF), the bill caps expenditure for the never-ending money pit Olmstead lock and dam project at 25% annual cost-share, freeing up IWTF funds for other inland projects. The bill also expresses the "sense of congress" that the annual appropriation for the Olmstead project should be no less than $150 million per year until completed (Sec. 213(3)).

Other interesting aspects of the bill include the funding mechanism, potential operation function of corps facilities by private parties (Sec. 225), and a mandate for the corps to inventory its property not essential to its mission which could be sold. The funding mechanism is to use $12 billion for projects funded before the 2007 WRDA bill which have not started, which the bill Summary somewhat euphemistically describes as "fully offsets new authorizations with deauthorizations."

The bill also creates a "Water Infrastructure Public Private Partnership Program" to encourage private participation in USACE projects, as well as creating an "Inland Waterways Stakeholder Roundtable" to address the needs of the Inland Waterways Trust Fund, and support the needs of the Inland Waterways System. (Sec. 215).

Actual action on this an ambitious attempt to fund port and inland waterway structure will of course remain to be seen given the looming fiscal and debt ceiling crises Congress faces.