Governor Vetoes Legislation That Would Have Halted Ethanol Trains

Governor Vetoes Legislation That Would Have Halted Ethanol Trains

Governor calls for a two year moratorium to allow development of disaster response plans

Governor Deval Patrick Friday vetoed legislation that would have effectively ended a plan by Global Petroleum to complete their "virtual pipeline", the rail transport of ethanol from the midwest to their storage and blending facility in Chelsea. This rail route would bring ethanol unit trains - mile long assemblages of 60-80 tanker cars - through densely populated communities of eastern Massachusetts including Cambridge, Somerville, Chelsea and Revere.

In order to complete their rail route, Global's terminal required significant rehabilitation and modernization and, due to its location on the banks of the protected tidelands of Chelsea Creek, Global needed a "Chapter 91" license from the state Department of Environmental Protection (DEP). The legislation vetoed by Patrick would have prohibited the DEP from issuing a Chapter 91 license to any ethanol blending and storage facility located near a dense population center, a categorization that would have included Global. Prior to this veto, Global had announced that, due to community concerns, it was withdrawing its current Chapter 91 application.

Citing no examples, Patrick's veto message states that the vetoed legislation would "have the effect of significantly constraining the transport of ethanol in Massachusetts" and "interfere with marine terminal operations and potentially impact existing licenses throughout the state."

Patrick's message recommends, instead, two actions.

First, the permanent ban on Chapter 91 licenses would be replaced with a two year moratorium on "the addition of new routes of ethanol transport by rail in certain port areas."

Second, this two year moratorium would be used by the Massachusetts Emergency Management Agency (MEMA) to "develop a comprehensive ethanol transport response plan for all municipalities that accommodate the transport of ethanol by rail." Patrick's proposed legislation would mandate that MEMA develop a methodology by which the "entity transporting ethanol by rail" would be assessed the costs of developing the plan as well as the funding for the risk mitigation methods called for in the plan.

Far from being an effort to force rail companies to pay the actual costs of the transportation of hazardous materials, the legislation instructs municipalities and agencies to apply for federal grants for funding the measures needed to keep their populations safe. Patrick's veto message does not address the specifics of this funding mix, nor does it explain why it calls federal funding for safety measures "subsidies" for the municipalities when it remains taxpayer dollars subsidizing the costs of private transport of hazardous materials.

Despite the setback for Boston-area activists, their victory would not have stopped ethanol trains from continuing to enter Massachusetts at the New York border, run through the state to Worcester and turning south to Providence, RI. Patrick's safety and funding proposal, directed at the entire state, addresses concerns of other communities through which ethanol transport would have continued.

The ethanol industry exists due to a Federal mandate requiring the blending of biofuels with gasoline and supported by favorable tax treatment. As drought in the midwest have increased the price of corn and gasoline usage has decreased, the economic viability of ethanol has been increasingly questioned. In June, a bipartisan group of Senators introduced the "The Renewable Fuel Standard Repeal Act", saying that the ethanol mandate is increasing the cost of both food and fuel, and that the Federal government's unwillingness to suspend the mandate in light of the midwest drought forced them to call for its repeal.

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Photo courtesy vxla, licensed CC BY 2.0.


Isn't it true that the so-called moratorium is meaningless because federal railroad regulations trump any state action? Whereas the Chapter 91 action would prohibit certain uses on tidelands,but not restrict the use of the rails, removing Global's incentive.

The railroad siding that Global would use to deliver ethanol to their blending terminal is in a state of disrepair and was never configured to accept trains as large as the unit trains that would bring in the ethanol. In order to fix that, Global would have needed a Chapter 91 license because the rail line is on the protected tidelands.

The cleverness of the Chapter 91 action was that it would not have, in theory, prohibited the use of the tracks for ethanol delivery, just prohibited work to repair and upgrade the rail line. In practice, it prohibited the delivery of ethanol because, without the repair and upgrade, there are no ethanol deliveries possible. If Global had not withdrawn their Chapter 91 application and the Governor had signed the legislation, this would have ended up in court.

The Governor's language in his veto message is odd. It talks about not allowing a Chapter 91 license that would permit the transport of ethanol to Chelsea, Revere or East Boston. Taken literally, that makes no sense because you don't need a Chapter 91 license to transport ethanol anywhere. But perhaps the language is just shorthand for not allowing a Chapter 91 license for any work that would make the rail tracks ready for ethanol deliveries.

The moratorium is, of course, meaningless because there's no current Chapter 91 license application pending, But, you don't have a moratorium and the development of response plans unless you expect to have trains to which you might have to respond.

Global's playing a long game here. They've spent a lot of time and a lot money building this "virtual pipelne" from the midwest to the East Coast, buying rail yards and storage facilities. They can afford to wait a couple of years, which is what I'd expect them to do.