• Railroads and Coal Shipper Association respond to Petition for Declaratory Order on BNSF Coal Dust Mitigation Measures
  • November 3, 2009 | Authors: Michael Higgins; Charles A. Hunnicutt
  • Law Firms: Troutman Sanders LLP - Norfolk Office ; Troutman Sanders LLP - Washington Office
  • Last week, BNSF Railway Company ("BNSF"), Union Pacific Railroad Corporation ("UPRR"), and the Western Coal Traffic League ("WCTL") responded to a petition filed on October 2nd by Arkansas Electric Cooperative Corporation ("AECC"), which requested that the Surface Transportation Board ("STB") declare unlawful certain provisions of BNSF's Price List 6041-B. The provisions at issue affect coal shippers by imposing dust emission limits on coal trains originating at Powder River Basin mines and moving over the Joint Line and BNSF's Black Hills subdivision. AECC asked the STB to declare that BNSF's dust emission rules are an unreasonable practice and a violation of the common carrier obligation under federal law.

    Because of the high-profile of the issues raised by the filings and the potential implications for all coal shippers and railroads, it is likely that the STB will respond by instituting a formal administrative proceeding that will allow shippers, railroads, and other interested parties to participate. This advisory briefly summarizes the response filings submitted by BNSF, UPRR, and WCTL.

    BNSF's Response

    As the target of AECC's petition, BNSF vigorously disputed AECC's charges that its dust emission rules are an unreasonable practice and violate its common carrier obligation. Calling AECC's premise "fatally flawed," BNSF asserted that its requirements are reasonable because they are designed to prevent disruption of operations arising from dust-fouled ballast. The railroad explained that the rules would promote safe, efficient, and reliable transportation of coal from mine to destination. BNSF also rebutted AECC's allegation that the rules contravene its common carrier obligation. The rail carrier asserted that it has not denied rail service to any customer, and has not implemented punitive measures that would allow it to deny service.

    However, BNSF did not object to the STB instituting a proceeding. In fact, BNSF favored a proceeding with the objective that the STB would declare its emission rules to be lawful and reasonable. Citing its scientific study of coal dust and its "informed judgment," BNSF asserted that AECC would face a "heavy burden" in defeating the rules and the specific dust limits.*

    UPRR's Petition

    UPRR's petition requested leave to intervene in the proceeding. As the co-owner of the Joint Line and a major carrier of Powder River Basin coal, UPRR asserted that the matter could have potentially significant implications for its interests. In particular, UPRR raised the possibility that BNSF's emission rules could be imposed on UPRR coal trains moving over the Joint Line. In addition UPRR stated that it was experiencing problems with coal dust beyond the immediate vicinity of the Powder River Basin, implying that rules resulting from the STB proceeding should have broad application. It is noteworthy, however, that while UPRR supported a STB proceeding, the railroad did not offer unqualified support for BNSF. And, UPRR did not undertake to rebut the arguments presented by AECC.

    WCTL's Petition

    Like UPRR, WCTL petitioned for leave to intervene in the proceeding. WCTL cited the interests of its coal-shipper members who would be directly affected by BNSF's dust limitation requirements. WCTL raised the concern that its members would be subject to "draconian penalties, including cessation of service" for failure to comply with BNSF's standards. The association stated that punitive aspects of the program were not publicized by BNSF, leaving coal shippers to rely upon media reports. WCTL implied that a STB proceeding should examine enforcement measures implemented by railroads. In addition, WCTL urged the STB to open the proceeding to allow participation from all interested shippers, as the agency has in the past where substantive issues have industry-wide application.

    * * * * *

    We believe that the STB will respond to AECC's petition and the response filings by instituting a formal administrative proceeding. It is likely that the agency will adopt a procedural schedule allowing for public participation.

    * BNSF stated that it would suspend the effectiveness of its dust emission rules until August 1, 2010. This action renders moot the petition for stay filed by AECC, which sought to bar the rules from going into effect on November 1st. On Thursday, October 22nd, AECC filed a motion before the STB to withdraw its petition for stay.