Wisconsin frack sand producers seek relief from rail issues

July 30, 2018

LA CROSSE, Wis. (AP) — Wisconsin frack sand producers say their business is threatened by some railroads operating under outdated regulations.

The dozens of western Wisconsin mines that have sprung up in the past decade rely on four major railroads to deliver more than 30 million tons of frack sand annually outside of the state, the La Crosse Tribune reported.

Industry leaders said they’re forced to pay whatever prices and services are offered by their rail carriers.

Chris Greissing is the executive vice president of the Industrial Minerals Association-North America. He said the rail services have declined significantly over the last several years, while pricing has increased.

Hi-Crush Partners operates four mines in Wisconsin. The company has resorted to trucking sand from some mines to be loaded on trains at other sites, costing about $1.3 million in the first three months of the year.

Hi-Crush Partners CEO Robert Rasmus told analysts that the reduction in unit train availability could have also reduced sales by up to 500,000 tons (453,593 metric tons) of sand during the first quarter.

The Rail Customer Coalition is putting pressure on lawmakers to address problems that they said have grown in the nearly 40 years since Congress took steps to deregulate railroads through the Staggers Act. The coalition wants regulators to require railroads to allow “competitive switching.” Customers with access to only one railroad would be able to transfer cargo to another railroad within a certain distance.

Coalition spokesman Scott Jensen said the move would give flexibility for producers trying to reach different markets and encourage cost competition by the railroads.

But the Association of American Railroads argued that the Staggers Act is working and that the industry has invested more than $660 billion improving service and safety over the past four decades. The AAR calls the coalition’s request “forced access” and said it would “significantly compromise” the efficiency of the nation’s rail network.

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