National energy transportation : report


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National energy transportation : report
Series Title:
Serial - Senate, Committee on Energy and Natural Resources ;
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v. : ill. ; 26 cm.
Library of Congress -- Congressional Research Service
United States -- Congress. -- Senate. -- Committee on Energy and Natural Resources
United States -- Congress. -- Senate. -- Committee on Commerce, Science, and Transportation
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Transportation and state -- United States   ( lcsh )
Fuel -- Transportation -- United States   ( lcsh )
bibliography   ( marcgt )
federal government publication   ( marcgt )
non-fiction   ( marcgt )


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prepared by the Congressional Research Service, accompanied by maps jointly prepared by the U.S. Geological Survey and the Congressional Research Service, at the request of Henry M. Jackson, chairman, Committee on Energy and Natural Resources and Warren G. Magnuson, chairman, Committee on Commerce, Science, and Transportation, United States Senate.

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oclc - 03444526X
lccn - 77602590
lcc - HE199.5.F8 U54 1976
ddc - 380.5/2
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Full Text

2d Session P






MARCH 1978

Publication No. 95-15

Printed for the use of the Committees on Energy and Natural Resources and Commerce, Science, and Transportation U.S. GOVERNMENT PRINTING OFFICE 24-M 0 WASHINGTON: 1978

For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 Stock Number 052-070-04469-1

HENRY M. JACKSON, Washington, Chairman
DALE BUMPERS, Arkansas LOWELL P. WEICKER, Ja., Connectiiut
JOHN A. DURKIN, New Hampshire PAUL LAXALT, Nevada
GRENVII.E GARSIDE, Staff Director and Counsel
DANIEL A. DREYFus, Deputy Staff Director for Legislation D. MICHAEL IhARVEY, Chief Counsel W. O. CRAFT, Jr., Minority Counsel



HOWARI) WV. CANNON, Nevada, Chawirmaln WARREN G. MAGNUSON, Wa-shingtou JAMES B. PEARSON, Kansas
RUSSELL B. LONG, Louisiana ROBERT 1P. GRIFFIN, Michigant
ADLAX STE-'vE-NsON, Illiniis BOB PACKWOOD), Oregon
WVEND EL H. FORD,0It1) Keonj tuiic ky HARRISON H1. SChTMITT, New Mexico JoHIN A. DU'RKIN, NewN Hampshire .JOHN C. I)ANFORTH, Missouri
ArirEy IL, SAPinvrs taff birec-ter and Cief ('ounxel FiJwiN; K. I[AI. Gf-tiral Counvel NMALVOLI1M 'M. B, Smn i. llinority Staff Director '111l


To the Members of the Nenate Committees on Enerly and Natural Resouruceis and C(omn'rce. Science.
and T'ranmsportation:
This repoi is the third volume of a three-volume study on the transportation of energy resources in the United States. This volume presents descriptions and analyses of more than 40 issues in the energy transportation field. Some of these are currently the subject of congressional attention, some are certain to come before Congress in the future, and others are more speculative. It is our hope that the members of the two committees will find these discussions useful )both as background on the individual issues and as a means of obtaining an overview of current policy problems in the realm of energy logistics.
The first volume of this study was published in May 1977, and was entitled "Current Systems and Movements." The second volume is still in preparation, and deals with the Federal interests and responsibilities in energy transportation.
The study is being conducted at our request by the Congressional Research Service. Eighteen CRS staff members have contributed portions of this volume, which was coordinated by John WV. Jimison, analyst with the Environment and Natural Resources Policy I)ivision.
('haiinam. Committee on Energy
aTrul Natural Resources.
Chairman. Commiittee on 'om inrce,
Neience, and T'ran.sportation.


W~ashington, D.C.. Mayrch 14, 1978.
Cha'irmanl, Comm md/ce on Enetrqy and~ Natural hResourees.

Chai,1vnan, Corn 11tloc on C'ommnerce, Science, and TIraiisportatioin.

lhEARi SIRs: I anii pleased to submlit herewith a rel)ort ent itledl, "National Energy TransportaUt ion, Volume 11 I-Issues and Probh'mns," prepared at your request by t he Congressional Researchi Service. The. following staff members contributed portions of this volume : Robert L. Bamberger, aualvst, Environmernt andI Natural Resources Policy D~ivision ( ENIZ) ; IDr. Carl E. Behreus, an st. 'ENR; Alva M. Bowen, a~ *nyt, Foreign Affair, andi -National D~efense Division (FANI)) IDavid R. Gushee, specialist, EN R; ,John AN. .Jimison, anialys-t, E-NIZ; Thiomas, E. Kane, analyst. ENH ; Lawrence Kumins, analyst, ENR ; Martin L(e, analyst, EN 1H) l )vid M. Lin1dahi., analYst, ENR H Larry -Nikst-h, specialist, FAN ;i G-ary J. Pagliano, analy-St, E"NH ; Hobedrt 1). Polingo, legislative attor-ney, American Law Division; Paul Rothbecrg, analyst, Science( Polic y Researclr Division1 ItH. E. Sullins, analYst. FA N!); Louis Allan '[alley, ana I st, Economics Division; Duane A Thompson. analyst. ENRH; Dr. Stephen .J. Thompson, analyst, Economics IDivision ; and towardd T sem, analyst, Economics D ivision. The edlit or and cooi-dinator was .John W. .Jinmison, analyst, EN H. Arlette Giillis, EN Q, tvpel and l~'prepredl this v'olumne foi- publication.
I am hopeful that this v-olume will provide significant a-sistance to the umemnber's of the commnittees and an glad that you have decided to publish it as acoimniittee print.
GiLBET GUDE, Pirector.

Digitized by the Internet Archive
in 2013


Memorandum of the Chairmen ---------------------------------v
Letter of Submittal ------------------------------------------------------------------ ViI
Summary of Contents ---------------------------------------------------------------- ix
Table of -Contents -------------------------------------------------------------------- X1
.3. Introduction--------------------------------------------------------------------- 1
:3.1. Issues and Problems Related to Existing Supply Areas ---------------------------------- 3
3.1.1. Feedstock Supply Problems of -Northern Tier Refiners ---------------------------- 5
3.1.2. Truck Weighlt and Size Limits ----------------------------------- -------------1
3.1.3. Truck Fuel Efficiency S tandards---------------------------------------------- 22
3.1.4. Road Damage from Coal Truck Traffic ----------------------------------------- 29
:3.1.5. Nuclear Shipments Safeguiards----------------------------------------------- 39
3.1.6. -Nuclear Materials Shipments by Rail ------------------------------------------ 50
3.1.7. Railroad Industry: Financial Health and P~rospects---------------------------------- 54
3.1.8. Effects of Hazardous Materials Transportation Regulations on the Del very of Energy *Products----------------------------------------------------------- 74
.3.1.9. Waterway User Charges ---------------------------------------------------- 91
;3.1.10. Natural ()ras Pipelines--The Imipact of the -Natural Gas Shiortage on Their Ftre 102 3.1.11. Changes in the Oil P~ipeline Industrvys Regulatory and Organizational S structure 125 3.1.12. Vulnerability of Oil and Gas Pipelines to Sabotage_------------------------- ----- 159
:3.1.13. A National Power Grid----------------------------------------------------- 171
:3.1.14. Conversion of Florida 'Natural Gas Line to Pet rolenim Products Transport ation11--------182
3.1.15. Disruption of Energy Transportation by Weather and -Natural Disasters -------------189
3.1.16. Eastern Coal Slurry Pipelines-----*------------------------------------------- 196
;3.2. Ise and Problems Related to Ener-gy from Alaska -------------------------------_ 205
3.2.1. TDisposition of West Coast Oil Suirplus of Alaska. (Crunde Oil--------------------_ 2~07
:3.2.2. Additional Crude Oil Pipeline Capacity inAlaska ---------------------------_ 257
.3.2.3. JTones Act Issuies -------------------------------------------------------_ 960
:3.2.4. Transportation of Alaskan Coi l-------------------------------------------- 268
3.2.5. Alaska Pipeline Rates and Tariffs -----------------------------------------_ 974
3.2.6. The Alaska Natural Gas Transportation Issue-------------------------------_ 283
:3.3. Issues and Problems Related to Implorted Energy-------------------------------------- 313
3.3.1. Deepwater Port Siting and Licensing----------------------------------------- 315
3.:3.2. Tanker D~esign and Safety Regulation----------------------------------------- 324
:3.3.:3. Transportation Requirements of the Strategic Petroleum Reserv-e------------------ 333
3.3.4. Oil Tanker Surplus -------------------------------------------------------- 343
3.3.5. Overseas Supply Line Vulnerability ------------------------------------------ 348
:3.3.6. Natural Gas From Mexico-------------------------------------------------- 364
3.3.7. Ratification of International Transportation Conventions------------------------- 377
:3.3.8. Liquefied Natural Gas: Hazards. Safety Requirements, and Policy Issues------------- 382
3.3.9. LPG Import Levels, Safety, and Sources-------------------------------------- 405
3.3.10. Cargo Preference Issues---------------------------------------------------- 420
3.3t. 11. International Pipeline, Treaty------------------------------------------------ 430
3.4. Issues and Problems Related to Western Coal Transportation---------------------------- 439
3.4.1. The Sulfur Content, B3tu Content, and Certainty of Development of Western Coal --- 441 3.4.2. Expansion of Railroad Coal Movement Capacity to Probable Western (Coal Markets --- 460 3.4.3. Local Impact of Coal Unit Train Traffic -----*------ ----------------------------- 467
3.4.4. Long-termi Contracts or Rates for Railroads Hauling Coal------------------------- 475
3.4.5. Coal Transportation Ii-tpacts of Lock and Darn 26 -------------------------------- 487
3.4.6. Coal Slurry Pipelines ------------------------------------------------------ 495
3.4.7. Coal Transportation on the Great Lakes---------------------------------------- 505

.3.5. O ther Potential Issiies - - - - - - - - - - - - - - - -- 517
3.6. Sum mn ary and Analysis -- - - - - - - - -- - - - - - - - 529
3.6.1. Sumnmary and Analysis by Fuel ------ - --------- -- ----- 52 9
3.6.2. Sunmmuary and Analysis by Mlode ------------------------- 544
3.6.3. Additional Analysis and (Coiicltsiouis -- - - - - -- - - - - - .5 .


Memorandum of the Chairmen-------------------------------------------------------v
Letter of Submittal ---------------------------------------------------------------VI
Suminarv of Contents -------------------------------------------------------------------Ix
Table of Contents xI
3. Introduction ------------------------------------------------------------------- 1
3.1. Issues and Problems Related to Existing Supply Areas ----------------------------------3
3.1.1. Feedstock Supply Problems of Northern Tier Refiners ----------------------------- 5
(By David M. Lindahl) Background --------------------------------------------------------- Possible Actions -------------------------------------------------3.1.2. Truck Weight and Size Limits -----------------------------------------------11
(By Robert L. Bamberger) Background ---------------------------------------------------------11
: Inefficiencies Associated with Non-Uniform Gross Ve hicle Weight Limits ------- 12 Effect of Vehicle Load Limits on Movement of Spent Nuclear Fuel --------------16 Opposition to and Feasibility of I leavier Weight Limits ----------------------18
3.1.3. Truck Fuel Efficiency Standards ---------------------------------------------- 22
(By Robert L. Banberger) Existing Regulation of Motor Vehicle Fuel Economy -------------------------23 Flexibility of Standards for Heavier Vehicles ------------------------- ----- 24
3.1.4. Road Damage from Coal Truck Traffic ---------------------------------------- 29
(By Robert L. Bamberger) Movement of Coal by Truck -------------------------------------------- 29 Estimates of highway Inadequacy and Financial Need -----------------------33 Policy Options ------------------------------------------------------ 34
3.1.5. Nuclear Shipments Safeguards -----------------------------------------------39
(By Dr. Carl E. Behrens)
3.1.6. Nuck'ar Materials Shipments by Rail ------------------------------------------- 50
(By Dr. Carl E. Behrens)
3.1.7. Railroad Industry: Financial Health and Prospects ------------------------------- 54
(By Dr. StepIhen J. Thompson) Introduction ------------------------------------------------------------ 54 Rail Coal Traffic Forecasts ----------------------------------------------- 57 Railroads Other than Conrail ------------------------------------------- 60 Conrail ------------------------------------------------------------- 66 Other Stulies Relating to Coal Movement ---------------------------------- 67 Mergers. Abandonments and Intermodal Transportation; Their Effect on Energy Transportation ---------------------------------------------------- 68 General Energy Policy Problems ---------------------------------------- 71
3.1.8. Effects of Hazardous Materials Transportation Regulations on the Delivery of Energy
Products ------------------------------------------------------------- 74
(By Paul Rothberg) Issue Definition ----------------------------------------------------- 74 Introduction --------------------------------------------------------74 Laws and Regulations ------------------------------------------------- 75 Areas of Concern-- 78 Policy Alternatives --------------------------------------------------- 85 Conclusion--(XI)


3.1. Issues and P~roblems Related to Existing Su pply Areas- Continlued ?g
3.1.9. W aterway User Cha~rges -- - - - - - - - - - - - - - 91
(By Dr. Stephen .1. Thompson and Louis Alan Tpalley) Introduction --------------------------------------------------------- 91 Background---------------------------------------------------------- 92 20 Percent Differential ------------------------------------------------ 93
.1.9.4. Recent User Charge Imnpact Studies -------------------------------------- 94 Fuel Efficiency of Competing Modes -------------------------------------- 97
3....General Energy Policy Problems ---------------------------------------- 98
3.1.10. Natural Gas Pipelines Thie Impact of the Natural Gas Shortage on Their Future --- 102
(By JTohn W1. 1Jinison) Background--------------------------------------------------------- 102 Emergency Sales----------------------------------------------------- 105 Price Deregulation---------------------------------------------------- 107 Common Carriage of Natural Gas--------------------------------------- 109
3. 1. 10. 5. Sharing Supplies-Interpipeline Allocation and "Wheeling" of Natural Gas --- 115 Spare Capacity and Depreciation of Pipeline Investment -------------------- 120 Conclusion---------------------------------------------------------- 124
3.1.11. Changes,, in the Oil Pipeline Industry's Regulatory and Organizational Structures ---- 125 Legislative Background ----------------------------------------------- 125
(By Robert D). Poling) Oil Pipeline Regulation versus Gas Pipeline Regulation --------------------- 136
(By Lawrence, Kumins) The Q uestion of Divestiture ------------------------------------------- 142
(By HlowardIUseem) A Concluding Note--------------------------------------------------- 156
(By Lawrence Kumins)
3.1.12. Vulnerability of Oil and Gas Pipelines to Sabotage ------------------------------ 159
(By John W. Jimison) Background--------------------------------------------------------- 159 Areas of Vulnerability------------------------------------------------ 161 Protective Measures------------------------------------------------- 166 Analysis ------------------------------------------------------------ 168
3.1.13. A National Power Grid----------------------------------------------------- 171
(By Gary J. Pagliano) Background--------------------------------------------------------- 172 Present and Future I nterconnect ions------------------------------------ 173 Interconnecting Authority --------------------------------------------- 176 A Central Authority andWheelingW--W---------WWWWWWWWWWWWWWWWWWWWWWWWWW-177 Conclusion---------------------------------------------------------- 180
3.1.14. Conversion of Florida Natural Gas Line to Petroleum Products Transportation --------182
(By David M. Lindahl) Background--------------------------------------------------------- 182 Consumer Benefits---------------------------------------------------- 183 'Maritime Opposition-------------------------------------------------- 184 Proceedings--------------------------------------------------------- 183
3.1.15. Disruption of Energy Transportation by Weather and Natural Disasters -------------189
(By.John W. Jimison) Background--------------------------------------------------------- 189 Petroleum Products--------------------------------------------------- 190 Coal --------------------------------------------------------------- 190 Natural. Gas --------------------------------------------------------- 193 Electricity---------------------------------------------------------- 193 Earthquakes--------- I------------------------------------------------ 195 Analysis ------------------------------------------------------------ 195


3.1. Issues and Problems Related to Existing Supply Areas-Continued Page
3.1.16. Eastern Coal Slurry Pipelines ------ I -------------------------------------------- 196
(By John W. Jimison) Background ------------------------------------------------------------ 196 Pipeline Availability ----------------------------------------------------- 197 Terrain, Siting, and Sulfur Treatment ------------------------------------- 199 Water ------------------------------------------------------------------ 200 Rights-of-Way --------------------------------------------------------- 201 Rail Competition -------------- 7 ------------------------------------------ 202 Barge Competition ------------------------------------------------------- 203 Conclusion ------------------------------------------------------------- 203
3.2. Issues and Problems Related to Ener gay from Alaska ------------------------------------ 205
3.2.1. Disposition of West Coast Oil Surplus of Alaska Crude Oil ------------------------- 207
(By David M. Lindahl) Issue Definition --------------------------------------------------------- 207 Background and Policy Analysis ------------------------------------------ 207 PACTEX Pipeline ------------------------------------------------------ 211 Northern-Tier- Pipeline -------------------------------------------------- 219 Kitimat Pipeline --------------------------------------------------------- 224 Trans Mountain Pipeline ------------------------------------------------- 231 Four Corner-, Pipeline --------------------------------------------------- 233 Direct ]Deliveries by Tanker ----------------------------------------------- 233 Movement by Tank Car Unit Trains --------------------------------------- 241 Exchanges and Exports -------------------------------------------------- 246 Shutting in North Slope Production --------------------------------------- 251 Summary -------------------------------------------------------------- 251
3.2.2. Additional Crude Oil Pipeline Capacity in Alaska --------------------------------- 257
(By David M. Lindahl)
3.2.3. Jones Act Issue ------------------------------------------------------------------ 260
(By Dr. Stephen J. Thompson) Background ------------------------------------------------------------- 260 General Energy Policy Problems ------------------------------------------- 265
3.2.4. Transportation of Alaskan Nal ------------------------------------------------- 268
(By John W. Jimison) Transportation of Alaskan Coal-Background ------------------------------- 268 Analysis ---------------------------------------------------------------- 271
3.2.5. Alaska, Pipeline Rates and Tariffs ------------------------------------------------ 274
(By Howard Useem) Introduction ------------------------------------------------------------- 274 Background ------------------------------------------------------------- 275
3.2-5-3. The TAPS Tariff Controversy --------------------------------------------- 276 Additional Questions ----------------------------------------------------- 280 Intrastate Rate Questions ------------------------------------------------- 281
3.2.6. The Alaska Natural Gas Transportation Issue ------------------------------------- 283
(By Gary J. Pagliano) Backaround ------------------------------------------------------------ 283 The Agency Studies ----------------------------------------------------- 286 Canada's Decision ------------------------------------------------------- 288
3.2-6-4. The Joint Decision ------------------------------------------------------ 289
3.2-6-5. Distribution ------------------------------------------------------------ 290
3.2-6.6. The Western Leg Issue ---------------------------------------------------- 291
3.2-6-7. Financing -------------------------------------------------------------- 296,
3.2.6.S. Wellhead Pricing and End-user Pricing ------------------------------------ 302
3.2-6-9. Guarantees ------------------------------------------------------------- 307 Conclusion ------------------------------------------------------------- 309

3.3. Issues, and Problems Related to Imported Energy------------------------------------- 313
3.3.1. Deepwater Port Siting and Licensing ----------------------------------------- 315
(By Thomas E. Kane) Background---------- ------------------------------------------------ 315 Analysis------------------------------------------------------------ 318
3.3.2. Tanker Design and Safety Regulation ----------------------------------------- 324
(By Martin Lee) Background---------------------------------------------------------- 324 Analysis------------------------------------------------------------- 327
3.3.3. Transportation Requirements of the Strategic Petroleum Reserve -------------------- 333
(By David M. Lindai) Background---------------------------------------------------------- 333 Tanker Availability--------------------------------------------------- 336
3.3.4. Oil Tanker Surplus --------------------------------------------------------- 343
(By David M. Lindahi)
3.3-5. Overseas Suipply Line V\ulnerability ------------------------------------------- 348
(By A]lVa *M. Boweri. Jr.) Background ------------------------------------------------------_ 349 Analysis ------------------------------------------------------------- 353 NATO War -------------------------------------------------------_ 357 The War at Sea Scenario--------------------------------------------__ .36~2 Sinnmary ------------------------------------------------------------ 363
3.3.6'. Natural Gas Fromn Mexico--------------------------------------------------- 364
(BV John11 W. Jimlison1) Background---------------------------------------------------------- 364 Gas Suipply Contributioni--------------------------------------------_ 370 Price ---------------------------------------------------------------- 371 U.S.-MNexilean Relations------------------------------------------------- 374 C'oniclusionl----------------------------------------------------------- 375
3..7 Raiicto of Inentoa Transpor~tmaii Connion-------------- 377
(By Larry Nikschi) Backgrround---------------------------------------------------------- 377 Analysis------------------------------------------------------------- 380
3.3.8. Liquefied N.\atural Gas: Hazards. Safety Requirements. and Policy Issues ------------- 382
(By Paul Rothberg)
3....Introdluction ------------------------------------------------------_ 382 Existing and Expected LNG Receiving Facilities --------------------------- 383
:.3.8.3. LNG Importation Policy --------------------------------------------_ 391 Hazards and Safety Concerns ------------------------------------------- 393 Siting of LNG Facilities Onshore----------------------------------------- 395
3.3. 8. 6. Siting of LNG Terminals Offshore---------------------------------------- 398
3. 3.S.74. Federal Responsibilities and Regulations---------------------------------- 400 Summary------------------------------------------------------------ 402
3 .3.9. LPG Import Levels, Safety, and Sources--------------------------------------- 405
(By John W. Jimison) Background ---------------------------------------------------------- 405 Domestic -Market, for LPG ---------------------------------------------- 407 Projections ---------------------------------------------------------- 412 'Sources of New Imports------------------------------------------------ 414
3.3.9-5. Contraints ----------------------------------------------------------- 416 Other Considerations-------------------------------------------------- 418
3.3.10. Cargo Preference Issues---------------------------------------------------- 420
(By Martin Lee) Background --------------------------------------------------------- 420 Analysis ------------------------------------------------------------ 426
3.3.11. International Pipeline Treaty-- ---------------------------------------------- 430
(By R. E. Sullinis) Background --------------------------------------------------------- 430 Analysis ------------------------------------------------------------ 433

31.4. Issues anid Problems Related to Western Coal Transportation---------------------------- 439
3.4.1. The( Sulfur Content, Btu Content, and Certainty of D)evelopment of Western Coal -------441
(By Duane A. Thompson) Western Surface -Minable Reserves --------------------------------------- 441 Sulfur Content of Western Coal----------------------------------------- 443 Federal Coal Leasing Policies as a Stimulus to Western Coal TDevelopment -------446 Recent Increases in the D evelopment of Western Reserves--------------------- 448 Projected Production From the Western States ----------------------------- 449 Conclusion----------------------------------------------------------- 458
3.4.2. Expansion of Railroad Coal -Movement Capacity to Probable Western Coal Markets 460
(By John W. Jimison) Background---------------------------------------------------------- 460 Track Capacity-------------------------------------------------------- 462 Financing Larger Capacity --------------------------------------------- 463 Conclusion----------------------------------------------------------- 466
3.4.3. Local Impact of Coal Unit Train Traffic---------------------------------------- 467
(By IDuane A. Thompson) Background--------------------------------------------- ------------- 467
3.4.4. Long-term Contracts or Rates for Railroads Hauling Coal-------------------------- 47 5
(By John W. Jimison) Background---------------------------------------------------------- 475 Long-term Contracts Possibilities---------------------------------------- 478 Effects on Othier Shippers. Other Railroads, and Other Modes ------------------ 480 Compatibility With Statute and Regulation -------------------------------- 483
3.4.5. Coal Transportation Impacts of Lock and Danm 26 -------------------------------- 487
(By D)uane A. Thompson)
3.4.6. Coal Slurry Pipelines ------------------------------------------------------- 495
(By John W. .Jimison) Background----------------------------------------------------------- 495 Eminent Domain------------------------------------------------------- 498
: Wateri---------------------------------------------------------------- 500 Other F~actors and Conclusion ------------------------------------------- 502
3.4.7. Coal Transportation on the G'reat, Lakes---------------------------------------- 505
(By Duane A. Thompson) Brief Description of the Issue ------------------------------------------- 505' Background Information -----------------------------------------------15 05 Bureau of M.,ines, A-sssen ------------------------------------------- 506 Corps of Engineers Asse,(ssment ------------------------------------------ 508
- D~etroit Edlison M.\ovcment ----------------------------------------------- 508 Through Trafflic to 'New York ------------------------------------------- 511 Constraints andl 1roble nis ---------------------------------------------- 512 Analysis and Conclusion ------------------------------------------------ 514
3.5. Other Potential Issues ------------------------------------------------------------ 517
(By John IV. .Jimis on)
3.5.1. IDeregulation of Certain Trransportation Industries ------------------------------- 519
3.5.2. The Potential for Renewed Maritime Shiipment of Coal on the Eastern Se41board-- '5 19 3.5.3. The Transportation of Alaskan Northi Slope Natural Gas Liquiids.------------------ 520
3.5.4. Transportation of Oil and Ga- s Developedl on the Atlantic OCS -------------------- 521
3.5.5. Transportation of Materials to Offshore Nuclear P~ower Plants -------------------- 521
3.5.6. Rail Iroa(-om-ned Coal Reserves an(l the Commnodities Clause------------------------ 522
3.5.7. Transportation of Products f rom 'Minemouth Conversion-------------------------- 52 3
(By D)avid E. Gushee)
3.5.8. Liability of Barge Operators for Oil Spills------------------------------------- 524
3.5.9. Natural Gas Pipeline Compressor Fuel---------------------------------------- 524
3.5.10. Spontaneous Combustion of Coal---------------------------------------------- 525
3.5.11. Natural Glas Pipeline Divestiture -------------------------------------------- 525

3.6. Sinnm ary and Analysis -- - - - - - - -- - - - - - - - - 529
(By John W. Jimison)
3.6.1. Summary and Analysis by Fuel ---------------------------------------------- 529 Natural Gas ---------------------------------------------------------- 529 Oil ------------------------------------------------------------------ 533 Coal ----------------------------------------------------------------- 537 Nuclear Fuels and Electricity ------------------------------------------- 542
3.0'.2. Sumnmary and Analysis by Mle --------------------------------------------- 544
: Pipeline ------------------------------------------------------------- 544
. Railroads ------------------------------------------------------------ 548 Trucks -------------------------------------------------------------- 549 Waiter Carriers ------------------------------------------------------- 552
3.6.3. Additional Analysis and Conclusions----------------------------------------- 555

3. Introduction

This is the the third volume of a study of the movement of energy

in the United States under the general title, "National. Energy Transportation." The first volume was published in June, 1977, entitled "Current Systems and Movements." The second volume, "Federal Interests and Responsibilities," is still in preparation.

This volume presents descriptions and assessments of more than forty issues and problems which concern transportation and energy. The basic criteria used to select these issues was that they are now or may be over the remainder of the century worthy of the attention of Congress. Many are currently on the legislative "front burner;" others have had almost no prior public consideration or are frankly speculative. The treatments of these issues vary considerably as a result, from very detailed and analytical, to very general and descriptive. The purpose of each of the section is to enable the reader to understand what the issue is, how it is related to the energy situation, what public actions have been taken on the issue, if any, and where additional information might be obtained. They are intended to stand on their own, and incorporate numerous cross-references. In addition, the concluding summary and analysis attempts to put the issues into an overall context.

The volume is divided into four parts, presenting the issues related to each of four general areas from which energy is or will be 'transported. The first section describes issues related to current energy movements within the United States, and potential issues related to current areas of domestic energy supply.

24-786 0 78 2


The second section focused on Alaskan energy resources as a major

new source of energy supply. Currently only oil is reaching the contiguous States from Alaskan, but natural. gas and perhaps coal will follow. Significant transportation related problems are discussed.

The third section deals with transportation issues concerning imported energy. Oil imports are already huge, but promise to grow further. Imports of natural gas, both in pipelines and LNG tankers and LPG present additional issues.

The final area, that of western coal resources, is a major new supply area for U.S. energy, perhaps the only one available in the contiguous 48 States over the next few years. Numerous issues related to transportation of this coal are described.

It is clear from the issues listed that a broad view of transportation was taken in labelling all of these "energy issues." They are all energy policy issues with a major transportation dimension, and incorporate the sources, destinations, prices, supply and demand, and other factors besides the strictly logistical factor. There are a number of potential issues that are not addressed, mentioned in section 3.5. Of course, from the broadest possible perspective, every energy issue has a transportation dimension to some extent. Hence the issues presented in this volume are a selection. They were selected by the authors, the coordinator, or suggested by congressional staff or other persons knowledgeable in the energy area. It is hoped that, if not complete, this selection of issues will encompass all of those which will, bring energy transportation questions before Congress the near-term and mid-term future.




3.1.1. Feedstock Supply Problems of Northern Tier Refiners.*/

Refiners in the Northern Tier (Washington, Montana, North Dakota, Minnesota, Wisconsin, and Michigan) face increasingly serious difficulties in obtaining adequate feedstock to maintain t-heir operations at current levels. This situation is a result of declining domestic production in those States and in other producing states that supply them and of the gradual Canadian phaseout of sweet (low sulfur) crude

exports to the United S* -ates. Background. The 26 refineries in the Northern Tier are

heavily dependent on Canada for their throughput with nearly half (478,000 b/d) of their total capacity (986,000 b/d) coming from that source during the Department of Energy's crude-allocation base period of November 1, 1974 to October 31, 1975. An additional 255,000 b/d was received by other states during that period. The importance of the Canadian phaseout can be seen in Table 1, which shows the planned reductions in crude flows from Canada. These amounts are reviewed each year, in terms of Canadian needs, by the Canadian National Energy Board (CNEB), and they may be raised or lowered as circumstances warrant.

The continuation of heavy oil exports to the United States probably will not substantially ease the plight of these refiners because of the small volumes and the limited capability of Northern Tier refiners to handle that type of crude oil. All Northern Tier refiners will be affected by the reduced volumes of feedstock from Canada, but some will feel the full impact much sooner than others. The heavy crude, most of which is produced

Prepared by David M. Lindahl, Analyst, Environment and Natural Resources
Policy Division.


in Saskatchewan, cannot be received by Montana because of a lack of p,-peline connections to that areaTable I

Projected Canadian Crude Oil Exports to the United States (in barrels)

Year Light Heavy

1977 137,000 123,000
1978 55,000 140,000
1,979 20,000 99,000
1980 88,000
1,981 0 77,000
1982 0 68X0
1983 0 54,000
1984 0 42,000
1985 0 32,000
1986 0 26,000

The Department of Energy has predicted that 1978 the shortage in Montana could average approximately 28,600 b/d and cost the State over $300 million in real income. Montana produces enough crude oil for its own needs, but its marketing area is much larger, encompassing western North Dakota, Montana, Idaho, and eastern Washington. The Continental Oil Company refinery (52,500 b/d) at Billings will probably lose most of its Canadian sweet crude by 1979; the Exxon refinery (45,000 b/d) also at Billings and the Farmers Union Central Exchange Inc. refinery (40,000 b/d) at Laurel will also lose much of their throughput. The shortfall in Montana could be as large as 31,000 b/d in 1979 and 48,600 b/d by 1980.

I/ Howard M. Wi1son and Patrick Crow, Pipelines Rush Projects to Move
North Slope Oil, Oil and Gas Journal, October 3L, 1977, pp. 66-67.


The shortage in Montana will also affect eastern Washington because it receives much of its supply by pipeline and barge from Montana. The shortfall in Eastern Washington could reach 9,600 b/d in 1978; 11,300 b/d in 1979; and 13,000 b/d in 1980. The Department of Energy has not predicted shortages in other Northern Tier States before 1980, although Michigan will have no spare pipeline capacity and could be placed in a shortage situation by heavy demand for locally produced products. Product shipments into Wisconsin will probably have to increase by about 40,000 b/d between 1977 and 1980 because refinery utilization is expected to decrease from 63 percent to 33 percent due to lack of feedstock. North Dakota faces a similar situation and will need product shipments from other States to offset a decline in refinery utilization from 70 percent in 1978 to 66 percent by 1980. The looping of the Williams Pipeline wilJ probably prevent shortages in Minnesota prior to 1980, although Conoco's 23,500 b/d refinery at Wrenshall is scheduled to lose all. of its Canadian feedstock by 1979. Possible Actions. Exchanges of crude oil at Montreal for Canadian crude in the Midwest appear to be the most practical. means of dealing with the problem of short-term basis because the refineries are designed to accommodate that type of crude oil (light and sweet) and the pipelines are in place to carry it to them. Canada has been willing to do this but in the past it has required that only U.S. domestic crude oil be swapped for Canadian domestic oil to insure that Canada would not be disadvantaged during oil embargo. Canada, however, has recently relented and is willing to exchange its light oil for "secure" imported oil, probably

from sources in the Western Hemisphere that would not likely reduce or cut off their exports for political, reasons. Canada does require in this case that for the imported oil to qualify for exchange it must be delivered into the Lakehead Pipeline System which has a 30-day delivery lag time. This would permit Canadian exchange oil to be halted before the last of the "secure" oil could be delivered. Prior to this decision by the Canadians, Northern Tier refiners would commonly buy imported oil on the Gulf Coast, trade it for domestic crude, and then exchange that for Canadian oil. These exchanges of domestic crude oil amounted to only 3,000 b/d in August 1976 but reached 67,000 b/d in June 1977. Exchanges would probably exceed that level very quickly if it were not for the limited pipeline capacity

available for the trades.

The requirements imposed by the CNEB forces the affected refiners to pay a pipeline tariff to deliver domestic crude to the Lakehead Pipeline System at Chicago plus an incentive bonus of ten cents per barrel. Most refiners are apparently willing to absorb this extra transportation cost in preference to expensive refinery modifications to handle high-sulfur heavy oil or to reductions inheir throughput at great costs in efficiency. The lack of adequate pipeline capacity in the Chicago area, however, has made additional shipments extremely difficult. Some exchange volumes have actually been reduced because of the bottleneck. Conoco, for ex2/
ample, has been able to obtain only 8,000 b/d in this manner. The

only immediate alternative is to ship domestic U.S. crude oil from the Gulf Coast to Portland, Maine for shipment through the Portland Pipeline to Montreal at the prcahibitive cost of $2.00 or more per barrel. 2/ Ibid., p. 63.


declines in the Illinois Basin and Appalachia the problem is likely to worsen. The spare capacity situation is shown in Table II.

Table II

Spare Capacity of Connecting Pipelines in the Northern Tier States

Pipeline Capacity

Seaway Some

Explorer 0

Explorer (Products) 90,000 b/d

Texoma 0

Amoco (Cushing to Chicago) 0


Capline (Gulf Coast to 0
Patoka, Illinois)

Chicap (Patoka to Chicago) 0

Texaco-Cities Service
(Patoka to Chicago) 0

The Mid-Continent pipeline system is clearly inadequate to carry the

volumes of crude oil needed to effect exchanges with Canada on the scale required to prevent some Northern Tier refiners from running out of light, low-sulfur feedstock. If many of these refineries are unable to convert to other types of crude or to somehow locate domestic oil of satisfactory quality, their rate of utilization will drop precipitously and some may be forced to close. The problem is especially severe in winter when product demand is high, causing crude oil to be backed out of the pipelines in


favor of fuel oil, and when ice on the rivers prevents barges from supplementing deliveries by the pipelines. The limited pipeline capacity has even prevented some domestic exchanges from taking place.

Small refiners, in particular, would prefer to have pipeline space

allocated so that they could participate in additional swaps. The Department of Energy does not currently have the authority to allocate pipeline space to refiners. Those who would receive reduced volumes as a result of pipeline allocation could be expected to oppose such actions. Small, refiners, particularly those with limited access to domestic crude oil of the type needed for their refineries, would probably benefit to the greatest degree because it is more difficult for them to obtain pipeline space and because they have fewer refineries over which they can balance their feedstock shortages.

Some refiners, especially those that would lose space under the

allocation system, maintain that Federal controls are not needed as long as the individual shippers are pro-rated with each shipper sharing available space on a proportionate basis. Pipeline space allocation would also involve reporting requirements that concern some refiners because of the proprietary information that would be needed by the Department of Energy to implement a program for pipeline space allocation. The Northern Tier refiners are not eager for additional governmental regulat-ion but this is offset by their concern over the lack of throughput for their refineries and -heirdesire to complete exchanges with Canada, that have already been authorized. Allocation could conceivably double the 50,000-55,000 b/d currently available for exchange.

3.1.2. Truck Weight and Size Limits

The passage of the Federal-Aid Highway Amendments of 1974 (P.L. 93-643) in January 1975 probably settled the issue of maximum gross vehicle weight limits for trucks at the Federal level for some years to come. However, the issue remains an important one for the trucking industry at the State level. Background. The 1974 amendments raised the gross vehicle weight limit for trucks on .nterstate highways to forty tons, or 80,000
pounds. Previous to the passage of the legislation, the limit had been 73,280 pounds, dating from the passage of the first Federal-Aid Highway bill in 1956. A grandfather provision in the 1956 legislation allowed State-designated weight limits exceeding the Federal limit to stand. Otherwise, final designation of maximum allowable gross vehicle weight on interstate highways at or below the Federal limit was left to the discretion of each individual State. Several States, particularly in the Far West, permit considerably heavier loads on other primary and secondary roads.

However, as of January 1, 1978, ten States have not yet adopted the Federal maximum weight limit or have not authorized the limit to go into effect at some future date. The maximum gross vehicle weight limit in these States remains at 73,280 pounds. The ten States are Iowa, Illinois, Indiana,

Prepared by Robert L. Bamberger, Analyst, Environment and Natural
Resources Policy Division.

l/ Volume One, p. 243 of this study incorrectly notes that the current
Federal standard is 73,280 pounds.


Missouri, Arkansas, Tennessee, Mississippi, Pennsylvania, Maryland, and Connecticut (see accompanying map). Seven of the ten States run in a band north to south through the Midwest and effectively prevent the movement of heavy loads across the country. The trucking industry and trade associations are working at the State level to raise the allowable weight limits in these States from 73,280 to 80,000 pounds to achieve a uniform ceiling throughout the Nation.

During the energy shortages of winter 1977, nineteen States, including the ten above, passed emergency regulations increasing truck gross vehicle weight limits for the movement of fuel only. The crisis itself, of course, was generated by the weather and not by any State regulations concerning vehicle weight, and it does not appear that restrictions on gross vehicle weight have ever been generally responsible for fuel shortages or related hardship on endure consumers. But the lack of uniformity in State weight regulations does result in operating inefficiencies and inconvenience to motor carriers which affect the movement of primary fuels and refined products as well as all other freight. Inefficiencies Associated with Non-Uniform Gross Vehicle Weight Limits. The absence of uniform weight regulations from State to State affect a high percentage of loads moving from east to west, through the Midwest and into New England. One tank truck carrier servicing routes between Texas and Maine estimates that 65% of its total loads are adversely affected by the lower weight limits, including nearly the entire ten percent 2/
of the firm's business carrying petroleum from or into Pennsylvania. 2/ Telephone interview with Mr. Sam Niness, Jr., Chemical Leaman Tank
Lines, December 12, 1977.


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one carrier servicing the South estimates that 95% of its total, loads are
affected by weight restrictions.

Except where storage facilities are limited, it appears that most

customers served by tank truck carriers would accept the additional quantity of product that could be shipped with the higher weight limit. Where carriers are forced to utilize a tanker designed for a gross vehicle load of forty tons to carry a smaller payload, the net payload is reduced further since the vehicle itself is heavier and comprises a greater percentage of the gross load. One carrier estimated that this imposed a penalty of 1500 4/
pounds on the weight of payload that could be carried.

A traditional argument against higher gross vehicle weight limits

has been that heavier vehicles are less safe. However, the industry con tends that carrying lighter loads in vehicles designed to carry a heavier load results in a bumpier ride, places additional stress upon the vehicle, and makes the vehicle unwieldy and less safe than if the higher load were permitted.

Clearly, permitting larger loads would add to carrier revenues and

reduce operating costs. one carrier estimated that uniform weight limits 5/
would add between four and six million dollars to operating revenues. However) increased revenues would probably result in lower shipping charges per unit of product. Generally speaking, reduced operating expenses and charges for any service should result in some savings that can be passed

3/ Telephone interview with Mr. Scott Miller, Miller Transporters, Inc.,
December 13, 1977.

4/ Ibid.

5/ Telephone interview with Mr. Daniel- O'Donnell, Coastal Industries, Inc.,
December 12, 1977.


along to consumers either in lower prices or a postponement of future price increases. It is especially likely that some savings from heavier or uniform weight limits could be passed along to consumers in instances where primary fuels are delivered to public utilities whose earnings are closely monitored.

The potential savings in fuel costs to carriers was not a significant consideration in the earliest debates over gross vehicle weight limits, but is a more important consideration for truckers and national energy policy now. A study by the Stanford Research Institute estimated the gallons of diesel fuel that could be saved annually if the States below the Federal limit permitted loads of 80,000 pounds. Based upon vehicles of 70,000 pounds gross vehicle weight or more which would likely operate at 80,000 pounds gross vehicle weight if permitted to do so, the SRI study 6/
estimated the following savings:

State Potential Annual Savings of Diesel
Fuel if 80,000 Pound Limit Permitted (gallons)

Arkansas 4,117,647
Connecticut 3,308)823
Illinois 11,911,765
Indiana 16,323,529
Iowa 10,294,118
Maryland 10,294,118
Mississippi 5,073,529
Missouri 8,014,706
Pennsylvania 30,588,235
Tennessee 13,088,235

Total 113,014,705

6/ Chart adapted by American Trucking Association from Stanford Research
Institute study, "Liberalization of State Regulations on Truck Sizes and Weights." (Draft) States which have adopted higher weight limits since
the SRI study was completed have been omitted from tabulation above.

16 Effect of Vehicle Load Limits on Movement of Spent Nuclear Fuel. While an injunction in'the courts which discouraged the shipment of nuclear spent fuel by railroad has been overturned, these byproducts continue to be transported principally by truck. Trucks seem well-suited to the transportation of nuclear wastes because trucks are relatively inexpensive to utilize and can travel conveniently from point-to-point on interstate highways.

Movement of low-level wastes by trucks can generally be accomplished without exceeding Federal or State truck gross vehicle weight limits. However, Federal and State vehicle load limits, and regulatory variations between States, do pose a problem for truck transport of spent fuel which requires casks of considerably more thickness and material weight than those utilized in the transportation of low-level wastes. According to 7/
a study by the Nuclear Assurance Corporation released in September 1977, eleven casks for the movement of spent fuels are legally operational; however., only six are actually operational to any significant degree.

A total of six designs for truck casks have been approved. The highest cask has a loaded weight of 50,000 pounds exclusive of the transport vehicle itself. The heaviest cask design, still under construction, will have a loaded weight of 76,000 pounds, will require a permit for interstate travel in some States and will not be operational at all in others. One other cask design with a loaded weight of 56,000 pounds might not be 7/ Nuclear Assurance Corporation. Capability of U.S. Domestic Transportation System for the Shipment of Radioactive Wastes. September 1977, pp.
26-30, 125-128, B-1. The study incorrectly indicates the Federal gross
vehicle weight limit to be 73,280 pounds.


operational in states allowing a gross vehicle load limit of 73,280 pounds, but would probably be operational where the limit is 80,000 pounds. This 8/
particular cask design, however, has not been utilized recently.

The casks themselves, built to Federal specifications, comprise better than ninety-five percent of the total loaded weight of the cask and spent fuel. The total weight of the spent fuel in a 50,000 pound cask may be only 1000 pounds. Therefore, any compromise required to reduce total vehicle weight to meet weight restrictions would have to be made in the design of the truck tractor or trailer.

While permits can usually be obtained for overweight shipments, most

states stipulate that an overweight permit can be issued only for shipments of commodities that cannot be readily dismantled or separated. In many instances, the state authorities consider radioactive wastes a divis ble commodity. Routing of spent fuel shipments can also be complicated by the ten Sta.tes which have not adopted the Federal maximum gross vehicle weight limit of 80,000 pounds. Frost laws in some states which preclude the issuing of overweight permits during severe weather can restrict the scheduled shipment of spent fuel, however, this should not be a major problem because storage facilities on-site should permit some flexibility.

Casks designed for transportation of spent fuel by rail are considerably heavier. Four units which are legally operable weigh seventy tons loaded; one larger unit weighs 98.9 tons loaded with several more of these heaviest

8/ Telephone interview with Mr. Jack V. Houstin, Jr., Dec. 21, 1977,
Nuclear Assurance Corporation, Atlanta, Georgia.

24-786 0 78 3


un4ts planned for construction. The casks designed for railroad transportation will hold considerably more spent fuel. The largest railroad cask will. accommodate 10 pressurized water reactor fuel assemblies (PWR) or 24 boiling water reactor full assemblies (BWR) compared to the I PWR or

2 BWR which can be accommodate by the largest truck cask in actual operation currently.

For the moment, spent fuel is stored on-site or may be moved to reprocessing sites at Morris, Ill., West Valley, N.Y., and Barnwell, S.C. Because reprocessing of spent fuel has not been approved, movement of spent fuel is relatively limited now. Whether nuclear reprocessing is approved at a later date or not, shipments of spent fuel will likely increase in the near future when on-site storage facilities are filled. One proposal, under consideration in lieu of reprocessing would require the Federal Government to take possession of all spent fuel. and store it in Federal repositories. Adoption of this policy alternative would also increase the number of spent fuel shipments. If the railroads are not or cannot be more fully utilized at such a time when a policy decision is made, shipment of spent fuel by truck may be hampered by vehicle load 9/
limits and variations in weight regulations between States. Opposition to and Feasibility of Heavier Weight Limits.

Opposition to the higher gross vehicle weight limit in the ten States that have not approved a forty-ton limit conventionally centers about the contention that heavier vehicle loads will result in significantly higher highway maintenance costs. The issue of the safety of heavier loads is cited to 9/ For related discussion of this issue, see section 3.1.6., Nuclear
Material Shipment by Rail.


a lesser extent. The prospects for legislation to adopt the forty ton limit in any State are also-subject to local conditions. In some States, the state highway departments are opposed to the heavier weight limit, and the Midwest regional chapter of the American Association of State Highway and Transportation Officials (AAHTO) has expressed opposition even though the national organization has favored uniform weight limits.

National studies favor considerably higher weight limits than the current forty ton level. TheFederal Highway Administration (FRA) completed a study in 1968, not released until 1974, which argued that a gross vehicle weight limit of 120,000 pounds was desirable from the standpoint of highway economics and that no limit on gross vehicle weight was necessary with proper control of axle weight and spacing. Since the interstate system was designed to accommodate defense vehicles weighing approximately 120,000 pounds or more, the trucking industry has contended that the argument that heavier loads will dramatically increase the cost of highway maintenance is contradictory because the interstate system, if built to specifications, should accommodate heavier loads with routine maintenance. The FHA study calculated that the ratio of benefits to costs -- reduced operating expense to truckers against increased highway maintenance costs

from heavier gross vehicle weight limits would be roughly 23 to I on

the average for all highway systems. Responding to the argument that heavier loads would have a deleterious effect upon road conditions, the report noted:

The fear on the part of many individuals and the public at large
that increased vehicle weight limits would quickly destroy existing
pavements is not in agreement with past experience. Axle-weight limits have been raised over the last 45 years from about 8,000
to 23,500 pounds per single axel and, during this time, the number
of heavy axle applications and their average weights applied to the
pavements have increased. Yet over the 45 years that these increases


have been experienced, improvement and reconstruction of highways
for this reason alone had been a gradual yearly factor. The
highways have been financed from year to year without pinpointing
any particular part of the financing that has resulted from increasing
axle and gross weight limits.

In the event that the State laws were altered to provide for higher axle-weight and gross weight limits, it is not likely
that an increase in the rate of deterioration of highway
pavements would be specifically noticed, The analysis,
however, shows that any expected increase in the rate of reconstructing pavements that might result from increased
weight limits would be many times offset by a decrease in the cost
of highway trucking operations. 10/

At the time of the study's release in 1974, a cover letter from the FHA accompanying the study added the caveat that "any substantial increase in legal loads without a massive program to update, monitor, and maintain the highway system would create disastrous effects in many States." Analysts within the trucking industry believe the findings of the study and the posture of the FHA towards the study's conclusions have been inconsistent.

The Interagency Study of Post-1980 Goals for Commercial Motor Vehicles supported enacting legislation to permit longer, wider and heavier vehicles, urging that any Federal laws "be designed to encourage state uniformity, or, if necessary, be preemptive." The study recommend that highway use taxes be increased for heavier classes of commercial vehicles during a five-year transition period to defray ll/
costs of improvements to the highway system.

Barring a sense of national urgency more likely to be brought on by considerations of national energy policy and transportation fuel economy 10/ Federal Highway Administration. Economics of the Maximum Weight
Limits of Motor Vehicle Dimensions and Weights. Chapter 17. (Report
No. FHWA-RD-73-70).

ll/ Interagency Study of Post-1980 Goals for Commercial Motor Vehicles.
Executive Summary. July 1976, Draft. pp.18-19.


rather than by a concern for more efficient movement of primary fuels, refined products and other freight, it does not seem likely that the gross vehicle weight limit will be increased at the Federal level in the nearterm. The trucking industry identifies no such effort at the Federal level, but will continue to push to establish the forty-ton limit nationwide.


3.1.3. Truck Fuel Efficiency Standards *

Many energy policy analyst's believe that the greatest potential and

flexibility for reducing national energy consumption ties within the transportation sector. Motor fuel consumption currently averages over seven million barrels of oil, per day, or roughly forty percent of total petroleum consumption. While passenger automobile fuel economy has improved by more than thirty percent since 1974, dramatic increases in the sales of smaller trucks for personal. and commercial utilizations, and recreation vehicles indicate

to some analysts that fuel consumption by trucks may be a critical determinant of future levels of total, fuel consumption. In a Staff Working Paper on the National, Energy Plan, the Congressional Budget Office noted that trucks hold the key to narrowing the gap between actual and target gasoline

consumption in 1985.11

The Energy Policy and Conservation Act (P.L. 94-163) (EPCA), signed

into public law in December 1975, established average fuel economy standards for individual manufacturer's new passenger car fleets beginning with model year 1978, and provided authority for the promulgation of standards at a later date for nonpassenger automobiles below 6,000 pounds gross vehicle weight, and nonpassenger automobiles and trucks between 6,000-10,000 pounds gross vehicle weight.

However, with the exception of private and short-haul instances, vehicles utilized in the transportation of energy are not affected by existing Federal, regulations co ncerning motor vehicle fuel economy, and

*1 Prepared by Robert L. Bamberger, Analyst, Environment and Natural
Resources Policy Division.

I/ U.S. Congress. Congressional Budget Office. President Carter's Energy
Proposals: A Perspective. Staff Working Paper. June 1977. p. 55.


it is unlikely that any fuel economy standards affecting heavier trucks and commercial vehicles will be promulgated in the near future. Existing Regulation of Motor Vehicle Fuel Economy. Under EPCA, vehicles subject to fuel economy standards are 4-wheeled vehicles "manufactured primarily for use on public streets, roads, and highways" rated at 6,000 pounds gross vehicle weight or less, or a vehicle which

(a) is rated between 6,000-10,000 pounds gross vehicle weight, (b) is a vehicle for which the Secretary of Transportation determines, by rule, fuel economy standards are feasible, and (c) is a vehicle for which it is determined, by rule, that fuel economy standards "will result in significant energy conservation" or is a vehicle utilized on public streets, roads and highways as cited above.

Virtually all truck shipment of crude petroleum or refined products is in vehicles with a gross vehicle weight rating exceeding the statutory authority of the EPCA legislation. According to the 1972 Bureau of Census Truck Inventory and Use Survey, fewer than 1,450 vehicles, or roughly one tenth of one percent of all vehicles 10,000 pounds gross vehicle weight or less, were designated as "tank trucks for liquids," and many of these were perhaps designed for the transportation of non-fuel liquids. With the exception of isolated short hauls, it is similarly likely that vehicular movements of coal by trucks exceed 10,000 pounds gross vehicle weight. It seems reasonable to conclude that the fuel economy of trucks and commercial vehicles utilized in the transportation of energy cannot be regulated by authority of legislation already enacted concerning motor vehicle fuel economy.


When the full authority of EPCA is exercised, the legislation will regulate the fuel economy of over four-fifths of the nation's heavier non-passenger automobiles and trucks. Table I provides a breakdown of truck and bus sales by weight since 1970, and shows that sales of vehicles 10,000 pounds gross vehicle weight or less have historically represented better than eighty percent of truck sales and, in recent years, nearly ninety percent. The increase in sales of vehicles between 6,000-10,000 pounds gross vehicle weight no doubt reflects the increasing popularity of recreation vehicles in the last three years. Feasibility of Standards for Heavier Vehicles

It is unlikely that fuel economy standards for trucks over 10,000 pounds gross vehicle weight will be developed in the near future. One problem in developing such standards is that it is far more difficult to isolate a useful standard for measuring the fuel efficiency of larger vehicles. The executive summary of the Interagency Study of Post-1980 Goals for Commercial Motor Vehicles noted that "miles per gallon ... is a relatively meaningless 2/
number unless the type of vehicle and its load are also defined."_ The task force recommended measuring fuel economy "in terms of how much (in weight or in volume) [a vehicle] carries for the amount of fuel used," but also conceded that a unit such as "ton-miles" is marginally useful when comparing vehicles carrying low-density freight (such as Q-tips) and high density freight (such as.newsprint). 2/ Interagency Study of Post-1980 Goals for Commercial Motor Vehicles.
Executive Summary. Draft. November 1,976. p. 4.


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In a more strongly-worded critique, the American Trucking Association has argued that ton-miles are an' inappropriate measurement of truck fuel efficiency because ton-miles do not describe the actual service provided by carriers, the character of the commodity or the load carried, and do not measure the productivity of the vehicle. Fuel efficiency, the ATA, argues, cannot be measured apart from fuel use productivity, or "the efficiency with which resources are converted into goods and services ... .11 Ton-miles assume that "all tons or all miles are homogeneous." If fuel use efficiency is to address the total operation of a vehicle, the ATA contends, the analysis must accept that "within the trucking industry, and for the individual truck owner and operator, all things 3/
are rarely equal."

Measuring the fuel efficiency of heavier vehicles must also account for other variables such as the truck's mission. A truck used principally in urban areas will naturally consume more fuel than one operated on the open highway. Additionally, the majority of trucks utilized in commercial service are purchased and equipped against customer specifications which outfit the vehicle for a particular utilization. The task force report noted:

Much efficiency is built into trucks by this tailoring to the
job, but much complication also arises when one attempts to
characterize or "average" the national fleet or projected improvements in the fleet. Attempts to standardize the national
fleet about some "average" could destroy the service evidenced
today and result in greater national fuel consumption.

These facts lead to the obvious conclusion that attainment of fuel conservation beyond the present base can be realized only

3/ American Trucking Association. Comments in response to the Request
for Information and Public Comment on DOT Docket Fe-01, Truck and
Bus Voluntary Fuel Economy Improvement Program. June 24, 1975, pp. 17-20.


through careful assessment and implementation of appropriate
methods on vehicle-by-vehicle and fleet-by-fleet bases by
those persons most familiar with the vehicles and their
missions. 4/ [underlining in original]

While existing legislation could regulate the great majority of the truck fleet, and while it is unlikely that the fuel economy of heavier truck and commercial vehicles will be regulated in the near-term, the consumption of energy by heavier trucks is significant enough to warrant conservation efforts. Movement of freight by trucks accounted for 14.5% of 5/
transportation energy consumed in 1972, the greatest part of which was likely consumed by vehicles over 10,000 pounds gross vehi-cle weight. The high cost of fuel has enlisted the interest of regulated and private carriers in means to increase vehicle efficiency and to reduce operating costs.

Greater truck fuel economy may be achieved from technological improvements, increased operating efficiencies, and modifications to Federal and State regulations of trucking where majority opinion finds significant advantage. Vehicle streamlining, demand-actuated fan systems, and wind deflectors to reduce aerodynamic drag can achieve fuel savings of approximately five percent in proper applications. Utilization of radial tires, where appropriate to the truck's usage, can reduce fuel consumption by five to ten percent. Regulatory policy options could reduce empty mileage traveled by trucks, and could liberalize regulations which sometime require truckers

4/ Ibid.$ p. 7

5/ U.S. Department of Transportation. National Transportation: Trends
and Choices (to the Year 2000). January 1977. Chart, p. 33.


to travel indirect routes to preserve competition. Another policy option would be to relax Federal and State limitation on size, weight and vehicle configuration.

Federal agencies are not ignoring the potential for fuel economy

improvement of these vehicles. Following the appearance of the task force report in early 1975, the Federal Energy Administration, DOT and EPA signed a memorandum of understanding establishing a voluntary truck and bus fuel economy improvement program. One goal of the program has been to develop a number of technical bases for developing and isolating a measurement of the fuel efficiency of larger vehicles, and for developing use cyles which describe the broad range of truck utilizations. In addition to generating information on fuel use characteristics of larger vehicles, another essential purpose of the program has been to disseminate information to operators of commercial vehicles and fleets so as to facilitate and encourage voluntary actions to safe fuel- and reduce operating costs. The program has enlisted the cooperative efforts of motor carriers, trade associations, vehicles and engine manufacturers, and labor groups, and is under the direction of W.H. Close of the Department of Transportation.


3.1.4. Road Damage from Coal Truck Traffic

Greater reliance upon coal in the next several decades will alter

the patterns and magnitude of the transportation of mined coal, and will require increasing reliance on rail and truck modes of transport. Several States, particularly in Appalachia, are experiencing accelerated and severe damage to secondary and rural road systems from trucks hauling coal, and the problem is anticipated to become worse by 1980 and beyond. Movement of Coal by Truck. The Federal-Aid Highway Act

of 1976, signed into public law as P.L. 94-280, authorized an investigation and study to ascertain "the need for special Federal assistance in the construction or reconstruction of highways on the Federal-aid system necessary for the transportation of coal or other uses" contributing toward the alleviation
of the national energy crisis. While only one-tenth of total coal production moves from the mine directly by truck to the final market, trucks "form a collection and distribution system which is involved in over half of all coal shipments," including coal transport to rail and water bulk loading facilities. Nearly seventy-five percent of mined coal is transported 2/
by truck during some phase of its movement from the mine to the consumer.

Prepared by Robert L. Bamberger, Analyst, Environment and Natural
Resources Policy Division.

I/ Completion and release of the study has been delayed due to the establishment of a Coal Transportation Task Force by the Secretary of Transportation
in May 1977. The task force completed a draft interim report broadly
examining coal transportation dated September 1977; release of the
study directed by P.L. 94-280 is anticipated in early 1978.

2/ Transporting the Nation's Coal. A Preliminary Assessment report to the
Secretary of Transportation. Coal Transportation Task Force. January,
1978. pp. ii, II-1.


The economics of coal transportation, restrictions on gross vehicle weight, and the comparatively limited capacity of trucks restricts the

advantageous utilization of trucks to short haul situations of typically less than fifty miles. The inherent operational flexibility of trucks makes them especially useful to strip mining operations where fixed loading
facilities are impractical due to the constant shifting of the coal face.

Coal hauling by trucks generally bridges distances: (1) from the mine to the rail tipple or barge loading facility; (2) from the mine direct to market; or (3) from the mine to a "mine mouth" generating plant. The distance from the mine to the tipple is usually within five to ten miles. When last measured in 1969, nearly thirty percent of total coal production was moved by truck from the mine to the tipple. According to 1974 figures, approximately eleven percent of all coal produced moved directly by truck from the mine to the end-user, and over eighty percent of this tonnage was carried in the Appalachian region. An estimated ten percent of mined coal was transported 4/
to generating stations near the mine mouth that same year.

In most instances, coal haul trucks travel on local and secondary road systems inadequate to withstand repeated usage by heavy duty trucks, even where the gross vehicle weights are within posted legal limits. Where legal load limits are exceeded, the damage is more severe. The cost of highway construction, maintenance and reconstruction must currently be borne by the States. It is uncertain whether the individual States can muster sufficient financial resources to maintain the highways against sustained damage from 3/ Ibid.$ 11-3.

4/ Ibid.$ 11-5-9. A significant percentage of coal moved from mine sites to
mine mouth generating plants is transported in large, off-highway trucks
which cannot negotiate standard highways and which only cross public
thoroughfares at specified points.



(000 tons)

Truck Truck/ Truck/ Rail Water
Only Rail Water Only Only Other- Total

Alabama 2,598 5,681 2,995 5,014 1,446 1,843 19,577
13.3% 29.0% 15.3% 25.6% 7.4% 9.4% 100.0%

Eastern 4,597 68,530 968 11,050 85,145
Kentucky 5.4 80.5 1.1 13.0 100.0

Maryland 835 1,403 2,238
37.3 62.7 100.0

Ohio 11,478 3,666 2,738 14,734 3,195 5,538 41,349
27.8 8.9 6.6 35.6 7.7 13.4 100.0

Pennsylvania 18,711 25,536 2,116 20,793 13,312 7,173 87,641
21.3 29.1 2.4 23.7 15.2 8.2 100.0

Tennessee 2,343 2,460 754 3,683 9,240
25.4 26.6 8.2 39.9 100.0

Virginia 8 29,420 7,196 36,624
<.I 80.4 19.6 100.0

-West Virginia 3,122 25,587 5,588 56,424 2,218 5,572 98,511
3.2 26.0 5.7 57.3 2.3 5.7 100.0

Appalachian 43,692 162,305 15,137 118,893 20,172 20,126 380,325
Region 11.5 42.6 4.0 31.3 5.3 5.3 100.0

YConveyor movement and mine mouth consumption. SOURCE: Research Triangle Institute.


increased transportation of coal by truck. One study by the University of Tennessee cited in hearings before a Senate subcommittee in 1976 calculated that a three-axle coal truck, running on a well-maintained decent highway at the maximum legal load limit would cause damages requiring $8000 in road 5/
maintenance costs while paying only $1350 in licensing fees.

The conclusions and recommendations of the Coal Transportation Task Force and other policy groups may impel Congress to consider whether national energy objectives may necessitate a policy response at the Federal level to ensure the adequacy of regional highway systems to withstand the movement of coal by truck. The draft interim task force report notes that damage to these secondary and local roads is certain to grow in severity as annual tonnage and accumulated road mileage by trucks hauling coal increase. A significant increase of coal haulage by truck is anticipated east of the Mississippi, especially in Appalachia where small surface mines are the prevalent form of mining operation. The report considers the possibility that:

Appalachia's coal road problems could well become so severe
as to become a bottleneck on coal production. Further, truck tonnage could increase even more rapidly than expected if coal reserves are developed in areas not served by the.bulk hauling modes. Inasmuch as there are no firm indications of railroad plans to build additional spur lines to serve these areasand
since small mine operators are unable to finance rail construction
themselves, the burden of coal transportation in these situations
is likely to fall predominantly on the highway mode. Also, should
developments in pollution control equipment for coal-fired generators,
or in legislation concerning pollution control, make it uneconomical
to use Western coal in Midwestern or Eastern markets, a larger
than expected share of the expansion in coal production will have to occur in the East with the result that the truck mode's share

5/ U.S. Congress. Senate. Committee on Public Works. Subcommittee on Transportation. Energy Impacted Roads. 94th Congress, 2nd session. May 26,
1976, p.66.


of the transportation burden would likely increase in both absolute
and relative terms. 6/

Damage to the roads, however, may not be due strictly to increased utilization by coal haul trucks. Escalation of mining operations have drawn larger populations to the mining regions, increasing the per capita load on roads and other public and social service as well. The need to finance services in addition to maintenance of the highways has unfortunately preceded generation of the tax revenues essential to support these services. Estimates of Highway Inadequacy and Financial Need. A study released by the Research Triangle Institute in November 1977 surveyed the effect of coal movement on highways in Appalachia, including the States of Alabama, Kentucky, Maryland, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia. The study identified 6880 miles of road, and between 7/
900 to 110 bridges as inadequate to accommodate coal haul trucks in 1974.The study found that roughly fifty-eight percent of all coal production in Appalachia (roughly 221 million short tons) was carried by truck from the mine. Movement of coal solely by truck to its final destination varied from lessthan one percent in Virginia to a high of thirty-seven percent of total production in Maryland (see chart). However, on a strict tonnage basis, the study found that Pennsylvania moved the most coal directly by truck to market, followed by Ohio. Movement of coal by truck to rail distribution points appear to predominate in Eastern Kentucky, Pennsylvania, Virginia, 6/ Coal Transportation Task Force, Ibid., p. 11-12. 7/ An Assessment of the Effects of Coal Movement on the Highways in the
Appalachian Region. Final Report. Research Triangle Institute,
North Carolina State University and Appalachian Regional Commission.
November 1977.
24-786 0-76-4


Alabama, and Maryland. Rail movement of coal predominate over transport by truck to rail distribution points in West Virginia, Ohio, and Tennessee. West Virginia moved the most coal by truck to water, and Pennsylvania moved 8/
the most coal by water alone.

Twenty-seven States reported highway needs resulting from "energyrelated" activity in response to a survey conducted by the Federal Highway Administration. While Appalachian States indicated the greatest need for financial support to maintain coal haul roads, Illinois, Indiana, Arkansas, Wyoming, South Dakota, Utah and Colorado also reported highway damage from coal haulage. The task force found that approximately $7.3 billion, or .seventy-six percent of the costs of "energy-related" highway improvements needed between now and 1985 "would be incurred in building or rebuilding roads used for hauling coal." Appalachia would require $6.4 billion, or eighty-eight percent of the estimated capital requirement for maintaining
coal haul roads.

3.1.4,.3. Policy Options. Several options at both the State or national levels for providing revenue assistance to maintain or construct coal haul roads are under consideration. In some instances, the ultimate costs would be borne either by the coal mining industry, by the taxpayer, or passed through to the consumer. Possible options include a highway user tax, a national or State coal severance tax, a specific Federal-aid program, or increased regulation of coal hauling such as greater enforcement of vehicle load limits.

8/ Ibid. p. 3-6 3-8.

9/ Coal Transportation Task Force, Ibid., p. 11-9. See especially
Table 11-4, p. II-11, for specific estimates of the financial needs
of individual States to repair highway damage from energy-related


The Research Triangle study concludes that a general highway user tax

on coal haul trucks would be impractical. Most jurisdictions would probably lack the capacity and manpower to accurately assess highway use, and such a tax would be unfair unless assessed according to the use of the roads by a given truck operator or fleet.

Some states impose a severance tax on mined coal. Kentucky, for example, imposes a tax of at least fifty cents per ton, or 4.5% of the value of the mined coal, whichever is greater. Much of the proceeds of the tax have been allocated for the improvement and maintenance of 10/
coal haul roads in the eastern portion of the State.

A national severance tax is another policy option. However, the

prospects for a national severance tax may be somewhat dimmed by passage of the Surface Mining Control and Reclamation Act, (P.L. 95-87), and the possible passage of the Black Lung Benefits Reform Act (H.R. 4544).

P.L. 95-87 created an Abandoned Mine Reclamation Fund to be financed

by a tax of $.35/ton on surface-mined coal and $.15/ton on coal mined underground, or ten percent of the value of the coal in the mine, whichever is less. The revenues would be used for reclamation.

Passage of the Black Lung Benefits Reform Act would likely'result in the assessment of additional taxes on mined coal. One tax schedule that has been considered by Congress (H.R. 5322), would impose a tax of $.50 per ton on all underground mined coal, and a tax of $.25 per ton on surface-mined coal with the revenues to be used to finance a Black Lung Trust Fund. The 10/ Litigation against a State severance tax may be filed in Montana by
Decker Coal Company and four out-of-State utilities which purchase coal
from Decker. The utilities argue that Montana's thirty percent severance
tax exceeds the financial burden on the State from mining operations and is therefore an unjust burden to interstate commerce. See Energy Daily,
January 11, 197a, p.2-3.


measure has passed both the House and Senate and would become effective upon passage of H.R. 4544 which was still in conference as of late 1977.

Though the taxes in the bills cited above are not severance taxes

by name, the prospects for imposing any additional taxes on mined coal may not be favorable. However) the passage or likely passage of these bills, and the use of the tax mechanism to support reclamation and provide black lung benefits is presumably indicative of congressional priorities. Whether a severance tax is imposed nationally or is left to the discretion of individual States, it is likely that the burden of the tax would be passed along to consumers. However, one advantage of a national severance tax would be that it would not adversely affect the price competitiveness of coal from one region over coal from another.

If it is infeasible to enact a tax measure to generate revenues to finance coal haul road maintenance and construction, another option open to Congress would be to enact a specific Federal-aid highway program to address the problem. Passage of "program specific" highway programs, however, are generally hampered by the argument that such programs tax individuals who will. not derive any benefit from the application of the revenues. But it may be persuasive to argue in this instance that any measure which contributes to an assured national energy supply benefits the entire population indirectly even if the direct benefit is regional.

Another option that has been given some consideration would be to

divert coal transport from the highway to other modes of transportation, such as rail conveyor or coal slurry pipeline (See 3.1.16). These modes are less flexible than trucks and would require a substantial movement of coal to justify the capital expenditure. Mode diversion is probably altogether


impractical for surface mining operations, where trucks are required for at least the initial movement.

The development of other transportation modes as well as the maintenance and construction of highways consumes time as well as capital. In the short run, a lack of both lead time and money may compel officials to enforce local load limit regulations. "A large percentage of Appalachian roadways," the Research Triangle study notes, "... are definitely not capable of sustaining what are considered to be normal loadings (in the vicinity of 24 tons) on the predominant types of trucks used for coal haulages." Enforcement of load limits may be difficult to implement, the study observes, due to community economic and political considerations. Coal, as the study points out in a familiar phrase, "is the backbone of the local economy," and local officials are apt to be reluctant to enforce load limit regulations. The prospects for meaningful enforcement are uncertain, for while highway patrol or local policy officials can issue citations, local courts would be called upon to adjudicate any violations.

Two states, Ohio and Pennsylvania, permit coal truckers to post a performance bond for the privilege of exceeding load limits along a specific route approved by the county engineer. However, the posting of bonds tends to favor larger operators or truckers who can more easily afford or absorb the expenditure, and the likelihood that a bond can be posted can add ll/
disproportionate value to mineral deposits near major roadways. ll/ Research Triangle Institute, Ibid., Chapter 12.


As an energy source, coal is projected to have an increasingly significant role in the Nation's energy future. The ability to move coal efficiently, the task force predicts, will be crucial to the "national 12/
lifestyle and the vigor of the national economy." Because the issue

has been addressed in congressional hearings and a study mandated by public law, the affected States recognize that it is a problem which may be relieved by national legislative initiatives. Until Congress has gone on record to indicate whether that body believes the movement of coal is a national problem requiring national solutions, it seems highly likely that the States may be hesitant to assume the initiative to assure the expeditious movement of coal by highway in the mid- to long-term.

12/ Coal Transportation Task Force, Ibid., p. V-4.


3.1.5. Nuclear Shipments Safeguards*/

The term "safeguards" is used to denote measures taken to prevent theft

or hijacking of nuclear materials which might be used by terrorists to fashion nuclear explosives or otherwise threaten public health and safety. In the context of transportation, this means protecting those links between steps in the nuclear fuel cycle in which such nuclear materials are present.

Of the 12 steps in the complete nuclear fuel cycle (See Vol. I, p. 377ff), only two involve materials that could be used to make nuclear explosives, and those two are involved in the reprocessing of spent fuel and the recycle of plutonium as a nuclear fuel, which have not been initiated in the U.S. At the reprocessing facility, plutonium, which can be used as a weapons material, is separated from highly radioactive fission products in spent fuel, and shipped to a fuel fabrication center. There it is formed into pellets and incorporated into fresh fuel assemblies, to be transported to power reactors. During these two steps the plutonium is in a form that allows it to be transported into bomb-quality material with relatively minor technological barriers.

Elsewhere in the cycle, nuclear materials in forms usable for nuclear

explosives are not available without high technological expertise and facilities. The uranium used in the Light Water Reactor (LWR) fuel cycle contains uranium 235, which can be used for nuclear explosives, but its concentration, about three percent, is too low for that purpose. Increasing that concentration

Prepared by Carl E. Behrens, Analyst, Environment and Natural Resources
Policy Division.

I/ In an international context, safeguards also include measures to prevent
diversion of nuclear materials for weapons use' by nations as well as
subnational groups.


to bomb quality uranium requires enrichment, a complex and expensive technology

that could not be utilized by terrorists. Similarly, spent fuel from a reactor

contains plutonium,*but mixed with it are highly radioactive fission products.

Separating plutonium from fission products requires elaborate precautions

and remote handling that are considered beyond the capacity of terrorist

Thus the safeguarding of nuclear materials is a significant problem

in transportation only if reprocessing and recycle of plutonium are adopted.

Approval of recycle by the Nuclear Regulatory Commission, and before it by

the Atomic Energy Commission, has been a strongly debated issue. AEC in 3'
1974 issued a draft environmental statement supporting recycle, but

nothing that safeguards measures would have to be stepped up; NRC in 1976

issued a final environmental statement on the health, safety and environmental

2/ Of the many publications issued in recent years on the subject of nuclear
safeguards, the following are of particular interest:
-- Leachman, Robert B. and Phillip Althoff (eds.). Preventing Nuclear Theft: Guidelines for Industry and Government,. New York: Praeger Publishers, 1972.
--Wilirich, Mason and Theodore B. Taylor. Nuclear Theft: Risks and Safeguards. Cambridge: Ballinger Publishing Co. 1974.
Institute of Nuclear Materials Management. Proceedings, 17th Annual
Meeting, June 22-24, 1976, Seattle, Washington. Journal of the Institute
of Nuclear Materials Management, Vol. V. No. III, Fall 1976.
--Lippek, Henry E. with C. Richard Schuller. Legal,, Institutional and
Political Issues in Transportation of Nuclear Materials at the Back End of the LWR Nuclear Fuel Cycle. Battelle Human Affairs Research
Centers, Seattle, WA, Sept. 20, 1977.
--U.S. Congress. Office of Technology Assessment. Nuclear Proliferation and
Safeguards. New York: Praeger Publishers. 1977.

3/ U.S. Atomic Energy Commission. Draft Generic Environmental Statement
Mixed Oxide Fuel (GESMO) (Recycle Plutonium in Light-Water-Cooled Reactors).
WASH-1327. 5 vol. August, 1974.


aspects of recycle but deferred discussion of safeguards for a later study. Since issuing the 1976 document, NRC has been holding public hearings on recycle, but has reached no decision. In the meantime, President Carter has called for "indefinite deferral" of reprocessing and recycle, as part of his effort to discourage the use of plutonium worldwide -- a policy designed to deal with the problem of proliferation of nuclear weapons. He has also urged delay in developing the Liquid Metal Fast Breeder Reactor (LMFBR) program, a technology which would produce plutonium much more efficiently than in LWR's and would be fueled exclusively by that fissionable element.

Figure I and Tables I and 2 give a measure of the amount of material

requiring safeguards that could be expected with recycle of plutonium in the LWR fuel cycle. Figure 1, a reproduction of Figure IV-A-2 of the Draft GESMO, is a diagram of the fuel cycle, assuming 430,000 Megawatts electric of nuclear generating capacity in the year 1990 (substantially higher than currently projected). Reprocessing of spent fuel from this number of nuclear plants would produce 62,000 kilograms of fissile plutonium per year, of which 44,300 kilograms would be recycled and the rest stored. Fuel rods containing mixed plutonium and uranium oxide totalling 1,500 metric tons of those two elements would be shipped to fuel fabrication facilities, and fuel assemblies containing 18,300 metric tons of plutonium and uranium would be shipped to reactors.

Table 1, reproduced from Table IV G-1 of the Draft GESMO, indicates

the number and size of shipments required to meet an installed capacity of

4/ U.S. Nuclear Regulatory Commission. Final Generic Environmental Statement on the Use of Recycle Plutonium in Mixed Oxide Fuel in Light Water
Cooled Reactors. Health, Safety and Environment. NUREG-0002. 5 Vol.
August, 1976.


Figure I

ASSEMBLIES 430,000 MWe 8800 MTM

~~~~(U, Pu)02 RODS 1500 MTM-- -U02 FUEL REPROCESSING

NATU 62000 Kg Puf
1450 MTU 4PuO2
44300 Kg Pu


69400 MT SWU 8600IM
(42800 US, 26600 FOREIGN) 8600 MTU

71800 MTU


99300 ST

URANIUM MINES *Material Indicated In Storage May Be & MILLS All or Largely Present Elsewhere in the
ORE 47.4 x 106 MT Fuel Cycle as Material in Process

Figure IV A-2 Annual Industry-Wide Fuel Cycle Requirements for Light Water Reactors for About 1990 With Plutonium Recycle (AEC-OPA 1974 Projection)
Safeguards-sensitive links are emphasized.

Source: U.S. AEC, Draft GESMO, op. cit., Vol. III, p. IV A-5.


Tab I e I

C cl C C C: CCL
to CN mi Ln to
a ------ 4




9 CL

(D W cv C14 cn

is C=
wi ua cc
Q cNi Lr)

cc > rn
CC cn
> U. LU

ci m Cli

C) Ln 0
qu C= >
Cd lk
CL UJ 0. >
41 zi
uj z

0 to
E v CL 44

0 cc cc cr cr. cc cc
> 44
ui 14
cr >

LA. ui V)
L2 U.
L" < = 7=
ci X
C -i x
cc W UJ C3
LA. En uj 00
UJ U. LA. L"
cc C3 E I -j
uj U. 0 uj < ui -j cr.
X (07 Cn LLJ U
0 cc
0 cn w = -j =
U. 136 0.


Table 2

6 6 6
C= C= C=
ci cs
cm cm cn

6 6 6 C=
Li Ct C C C=
Ln i >- 1=
_j C= C=

to rn
cm CL 6
cr _j
0 C=
Ij C:


< LJ
cc >

m w LD cl


cm cz
0 CD

7, 14 1 >- i ci
r C, C
D LO >
E3 %
Ln V-1 co

.t 14
4 cm
cz C LO
> 4
-zr 44
CD cc



44 w
cc cm 00


u 14

CD (M e
0. 1 5 ; U u Z >
cc cc cc cc cc


< cc U. CC 0 cc
co CD CC UJ c <
x w CR cc
CD 2 -,, =
2 1-- 0. 1 = 4 rc CL. CL CLI


430,000 MWe with and without plutonium recycle in 1990. The amount of all forms of plutonium indicated in the table for shipment to fuel fabrication plants and to storage differs from the amount of fissile plutonium shown in Figure I because not all forms of plutonium are fissile.

From Table I it can be seen that the 65 metric tonnes of plutonium shipped to fuel fabrication facilities per year would require about 260 shipments; another 100 shipments would be required to ship the 26 metric tonnes of plutonium that would go into storage. Assuming an average shipping distance of 300 miles, this would result in a total shipping distance of 216,000 miles per year, half of which would consist of return trips of empty containers that would not require safeguarding.

Transportation of plutonium fuel from mixed oxide fabrication plants

to uranium fuel fabrication facilities would involve 260 shipments peryear, with a total of 1,500 metric tonnes of mixed plutonium and uranium fuel rods. At the uranium fabrication plant, the mixed oxide rods would be assembled, with fuel rods containing only slightly enriched uranium, into fuel as semblies, which would then be shipped to reactors. The fuel assemblies, containing the same 65 metric tonnes of plutonium, would require 2,400 shipments totalling 13,800 metric tonnes of fuel assemblies. An average shipment of 5.75 metric tonnes of fuel assemblies would thus contain about 27 kilograms of plutonium in the form of plutonium oxide mixed with uranium oxide.

The plutonium in this transportation cycle is most vulnerable in the link between the reprocessing facility and the mixed-oxide fabrication plant. The plutonium oxide is concentrated at this stage and the average shipment contains about 250 kilograms of the material. Shipments to the uranium fuel


fabrication facility would contain similar amounts of plutonium, but it would be mixed with uranium oxide fuel, presenting a further obstacle to its utilization in a nuclear explosive. Even the further dilution that takes place when mixed oxide fuel rods are installed in fuel assemblies and shipped to a reactor would not remove the danger of hijack, however, since the 27 kilograms of plutonium involved in an average shipment of mixed oxide fuel would represent several times the necessary amount, or critical mass, necessary to fashion a nuclear explosive. The separation of this material is a technological problem that probably could be solved with relative ease by a 5/
terrorist group capable of constructing an illicit nuclear explosive.

Measures to protect commercial nuclear materials from hijacking and theft during transportation have not been developed in great detail, since commercial reprocessing and recycle of plutonium have not been approved. In fact, it was the lack of detailed safeguards procedures that led to the delay in approval of recycle when AEC issued its draft environmental statement (GESMO) advocating such approval. However, the Energy Research and Development Administration (now the Department of Energy) continues to move nuclear materials of its own -- such as highly enriched uranium for nuclear submarine fuel, military nuclear weapons, and other strategic nuclear material and has developed a comprehensive transportation system to carry out this role. Included in the system is a fleet of specially built tractor-trailers equipped with special armor plating, bullet-proof windows'and links to a high-power nationwide communications system. Escort vehicles and a special

security force are also featured.

5/ Willrich and Taylor, op. cit., p. 12 ff. 6/ Brennan, C.D., et al. The Threat to Licensed Nuclear Facilities. Washington,
the Mitre Corp., (MTR-7022), Sept. 1975, p. 87.


Other techniques being considered, besides eliminating some transportation links by locating reprocessing and fuel fabrication facilities at the same place [colocation], include contaminating plutonium fuel with radioactive fission products, or designing shipping containers that would allow chemical dilution and contamination of the plutonium in the event of a hijack

The Draft GESMO data presented in Table were computed according to

the assumption that spent fuel would be reprocessed whether or not recycle was carried out. By the time the Final GESMO was issued, another option was considered; disposal of spent fuel without reprocessing. The alternatives considered in the Final GESMO included the no-reprocessing, no-recycle option; reprocessing with recycle of uranium but not of plutonium, and recycle of both uranium and plutonium. Table 2, reproduced from Table IV G-1 of the Final GESMO, indicates the cumulative total number of shipments for these three options through the year 2000, at which time 507,000 MWe of nuclear

-capacity were assumed to be on line. No shipments of plutonium were shown in the uranium-recycle-only case, which assumed that the plutonium would be stored at the reprocessing facility site.

Resolution of the question of recycle of plutonium, and with it the

need for safeguarding commercial shipments of special nuclear material, will probably lie with the Congress and the Executive Branch. Although NRC has authority to approve recycle under the Atomic Energy Act as now written, it seems unlikely the Commission would do so in the face of President Carter's policy, addition to policy aspects that are outside NRC's range of interests

-- such as the Administration's efforts to limit the worldwide proliferation 7/ Institute of Nuclear Materials Management, op. cit., p. 222.


of nuclear weapons by abandoning domestic use of plutonium -- economic factors will also enter into the decision by industry and Government to commercialize plutonium recycle and plutonium breeder reactors, and these economic factors will be strongly influenced by national energy policy.

Commercial reprocessing, even if approved, will depend on the economics of the technology compared to the present uranium-only LWR fuel cycle. Three attempts have been made so far to begin commercial reprocessing and recycle, and all three have been abandoned. A small pilot plant operated for several years at West Valley, NY, and was shut down in 1972 for expansion and improvement, but the builder has since dropped the project because of escalating costs and licensing difficulties. A reprocessing facility at Barnwell, S.C., has been almost completed, but is unlikely to operate in view of the deferral of recycle announced by the Administration. A third plant, at Morris, IL, was designed to use an advanced technology which proved to be unworkable, and that project also has been abandoned. In light of these experiences, it seems unlikely that commercial reprocessing will be economically viable as long as uranium resources are adequate to support the present cycle.

When nuclear power was expected to expand extremely rapidly, as in the years preceding the Arab oil embargo, the general assumption was that uranium for LWR's would begin to be scarce toward the end of this century. Adoption of the Carter Administration's energy policy, which emphasizes conservation and reduced growth in energy consumption, and classifies nuclear power as a "lower-priority energy source," could mean that these uranium reserves could last considerably longer. The President has asserted that Ila viable and economic nuclear power program can be sustained without ...


reprocessing and recycle," and that "there is no need to enter the plutonium age by licensing or building a fast breeder reactor" such as the LMFBR de9/
demonstration plant at Clinch River, TN.

Thus the Congressional role in determining the future of plutonium recycle, and with it the problems of safeguarding nuclear materials in transit, will lie primarily in its actions regarding national energy policy, and policy on nuclear power. These actions will determine the economic factors that will influence commercial pressure to adopt recycle and commercialize plutonium breeder technology.

Conversely, the question of safeguards will continue to be a factor

in determination of energy policy in general, and of policy in developing nuclear technology. The role of nuclear power in the national energy picture is already significant, and can be expected to grow in light of the continuing crisis over imported oil and diminishing production of natural gas. The question of plutonium use in the nuclear fuel cycle is one of the most controversial of all the debates concerning nuclear power.

Statement by President Carter on Nuclear Power Policy, April 7, 1977. 9/ President Carter's Address to Congress on the National Energy Program,
24-786 0 ?8 5

5 0

3.1.6. Nuclear Materials Shipments by Rail*/

Most shipments of nuclear materials are carried out by truck at

present, and this mode is expected to be preferred in the future. However, for two links in the nuclear fuel cycle -- transportation of spent fuel, and of high-level radioactive waste -- rail transport may be preferable, since some of the containers for these materials are massive enough to cause problems with weight limits on highways (See Section 3.1.2.).

Few shipments of spent fuel, and no shipments of commercial highlevel radioactive waste, are currently taking place. This is because new policies concerning the reprocessing of spent fuel, and the consequent production of high-level wastes, are in the process of formulation. The Carter Administration has called for the deferral of commercial reprocessing, and has proposed instead that the Government take possession of spent fuel, and store it in temporary repositories. In response to the uncertainty regarding the back end of the nuclear fuel cycle, many reactor operators have begun to expand the capacity of the spent fuel storage facilities at the reactor sites, making it possible to defer the date on which spent fuel must be transported. Another possible solution to lack of on-site storage capacity is shipping the fuel to nearby reactor sites where storage is available. A third possibility is storage at one of the three facilities that were designed for fuel reprocessing. The General Electric plant, at Morris, IL.) is already storing some spent fuel from reactors whose owners had contracted for reprocessing services, before the company abandoned plans to operate the facility because of technical problems. Some further storage of

Prepared by Carl E. Behrens, Analyst, Environment and Natural Resources
Policy Division.


this type is planned. Spent fuel is also stored at the Nuclear Fuel Services plant at West Valley, NY. However, NFS has abandoned plans to operate that facility and expects to turn the site over to the State of New York, which has not expressed interest in opening the facility for further storage of spent fuel. The third reprocessing facility, Allied General Nuclear Service Co.'s Barnwell, SC, plant, has not been licensed to receive spent fuel, and none is stored there. AGNS has not expressed interest in opening the facility for spent fuel storage until the future of the plant is further clarified.

By using these alternative methods, reactor operators can be expected to deal with spent fuel on a short-term basis with relatively little need for transportation. A survey of reactors in operation, under construction, or planned indicates that most reactors will have sufficient storage capacity to avoid shipments of spent fuel, other than to nearby reactors, before the mid-1980's.

The major advantage of rail shipment of spent fuel is that fewer trips

would be required, because of the greater weight that could be handled by railborne shipping casks. For a typical 1000-megawatt reactor, 27-31 metric tonnes of fuel, about one-third of its fuel load, are replaced each year. Once the on-site storage capacity is filled, this amount would have to be transported to another location. Rail transportation would require 6-10

I/ Nuclear Assurance Corp. Capabilities of U.S. Domestic Transportation
Systems for the Shipment of Radioactive Wastes. (Prepared for the
U.S. Energy Research and Development Administration.) Y/OWI/SUB-77/
22330. NAC C-7715. September, 1977.
Appendix E. Fuel Discharge Data.


shipments per year for this amount; shipments by legal-weight truck would re2/
quire 40-60 trips. Even in some cases where there is no on-site rail access -- which is the case for 52 of 192 operating or planned reactors 3/
surveyed in the NAG study -- a prefered mode may be shipment by overweight truck to a nearby rail center.

The major obstacle to the use of rails to ship spent fuel has been reluctance by the railroads to engage in the traffic, which, because of its relatively low volume and consequent low revenue does not appear to 4/
compensate for what the railroads perceive as a high-risk material. Because of this position, three actions are before the Interstate Commerce Commission that restrict rail transport of spent fuel. In two actions, one by the Missouri-Kansas-Texas Railroad and the other by the Eastern Railroads, spent fuel and radioactive waste have been "flagged out", meaning that the railroads refuse to transport it as common carriers. If upheld by the ICC, the railroads could either refuse to transport the material at all, or could provide specialized transportation service under negotiated contract. In the third action, by the Southern and Western railroads, spent fuel and radioactive waste have not been flagged out; these

2/ Lippek, Henry E., with C. Richard Schuller. Legal, Institutional and
Political Issues in Transportation of Nuclear Materials at the Back End of the LWR Nuclear Fuel Cycle. Battelle Human Affairs Research Centers.
Seattle: Sept. 30, 1977.

3/ Nuclear Assurance Corp. op.cit., Appendix D. 4/ Like many other aspects of nuclear power, the risk of transportation of
spent fuel is highly controversial. See Lippek, op.cit., pp. 5-1 ff.
The NAG study places the source of railroad opposition in their major
interest in the transportation of coal: "It would appear that the
railroads' efforts to roadblock rail transport of radioactive materials
are primarily directed towards increasing coal usage by adding another impediment to the use of nuclear power." Nuclear Assurance Corp., op.
cit., p. 33.


railroads have asked permission to require single-use trains at special tariffs and with certain routing and handling restrictions.

The ICC has not reached a final decision in any of these cases, although initial decisions by the Commission's Administrative Law Judge 5/
hearing two of the cases were against the railroad position. The 6/
Commission in August, 1977, issued an Environmental Impact Statement on the question of requiring special trains as opposed to regular trains. Its conclusion was that special trains would result in slightly higher radiological and nonradiological environmental impacts in normal operation, but would decrease the environmental risk from the radiological standpoint under accident conditions. In all cases, however, the ICC concluded that "the incremental environmental impact of special trains as opposed to regular trains is very 7/
smal I "

Congressional action in the question of transportation of nuclear materials by train does not appear to be required at the present time. In the first place, the need for rail transport is expected to be quite low for the very near future at least. Secondly, the question is currently before the ICC, 0 whose decision is subject to appeal in the Federal court system.

Nevertheless, the possibility that relatively large amounts of highly hazardous radioactive material may in the future be transported by rail should probably be monitored by the Congress so that it may be informed of

the factors involved in case action becomes advisable.

5/ Lippek, op. cit., pp. 5-2, 5-7.

6/ U.S. Interstate Commerce Commission. Final Environmental Impact Statement. Transportation of Radioactive Materials by Rail. Washington.
August 23, 1977.

7/ Ibid.) P. i.


3.1.7. Railroad Industry: Financial Health and Prospects Introduction. This section discusses the financial

health and prospects of the railroad industry as they relate to the ability of the railroads to transport more coal. For a more specific discussion of railroad expansion of capacity to carry western coal see section 3.4.2 and for a more specific discussion of coal slurry pipelines as an alternative to railroads for transporting western coal, see section 3.4.6.

For several decades the railroad industry has been in a state of decline. Ton-miles of rail traffic have not declined but neither have they grown nearly so fast as the economy has grown, nor so fast as the growth in ton-miles carried by trucks, barges and pipelines (reference 13, pp. 146-156). Furthermore, much of the more profitable traffic, consisting of higher priced, more processed goods (generally called "merchandise freight"), has shifted to trucks. Passenger traffic has declined, from more than 75 percent of all intercity passenger-miles provided by common carriers in 1929, to three percent in recent years (reference 13, pp. 155-156). Once considered to be a blue chip investment, rail stock has become so unattractive that obtaining funds by issuing new equity shares has become impracticable for most railroads. As a result, debt financing in the form of equipment trust certificates has become an increasingly large proportion

Prepared by Dr. Stephen J Thompson, Analyst in Transportation, Economics

I/ A ton-mile is a convenient measure of traffic volume. It means one
ton carried one mile.


of rail capitalization. Equipment trust certificates essentially are chattel mortgages backed by specific rail cars and locomotives which can be repossessed and sold if the obligations of the certificate are not met. Equipment leasing by the railroads from financial intermediaries has also become popular, as has ownership of rail cars by shippers. Equipment trust certificates and leasing from intermediaries raise the fixed costs of railroad operations thus making railroads even more vulnerable to severe financial pressures as a result of recessions in the economy. Also contributing to the railroads' inability to reduce expenditures when there is a downturn in traffic is the property tax liability resulting from owning their own rights-of-way, and the need to repair and maintain the rights-of-way.

There are a number of significant reasons for the long decline of railroads. One of the most significant reasons is the construction of 'a vast network of roads and highways accompanied by the development of automobiles, buses and trucks. Airlines have taken over the largest share of intercity passenger traffic carried by common carriers, and oil pipelines and barges have taken over a large share of bulk traffic.

As rail passenger traffic declined, the railroads' financial health was affected, since railroads were required to continue to provide unprofitable service until reduced service, and finally, total discontinuance was authorized on each specific route segment by the Interstate Commerce Commission (ICC). It was not until 1970 that the National Railroad Passenger Corporation (Amtrak) was created, relieving most railroads of the responsibility of providing rail passenger service at their own expense.


Similarly, as a large proportion of railroad trackage, usually branch lines located in rural areas, became unprofitable as a result of declining traffic and rising operating and maintenance costs, railroads could not abandon the line until each specific segment was approved for abandonment by the ICC. Rural communities strongly resist rail abandonments, feeling that such abandonments hamper their chances for economic development, and sensing, rightly or wrongly, that abandonment means increased isolation from other parts of the country.

Coupled with the problem facing rail management of passenger service

discontinuance and light-traffic-density line abandonment, was an inability to adequately adjust rail rates to the changing competitive situation. For example, as discussed elsewhere in this report, rate contracts with shippers cannot be for periods of more than one year. When railroads developed a significantly larger car for grain shipments, the ICC would not, for several years, allow a reduction in rail rates in proportion to the reduced costs of handling the traffic in these cars. Even now, railroads generally may not charge rates that are below the variable costs of competing modes even though the proposed rates would more than cover rail variable costs and thus make a contribution to help offset rail fixed costs. So far, the 4R Act (Railroad Revitalization and Regulatory Reform Act of 1976) has had a negligible impact on this situation and some observers attribute it to the standards set by the ICC for determining on which traffic the railroads possess market dominance.

Labor rules often restrict the ability of rail management to improve the efficiency of its operations as a way to become more price competitive with trucks and barges.


All of these factors have contributed to the presently weak financial condition of the railroad industry, generally. Thus, it is natural that the public, and policy makers in particular, are concerned about whether the railroads are in a position to expand their output at a rate sufficient to transport the expected increases in coal production. Rail Coal Traffic Forecasts. The importance of railroads in the

domestic transportation of coal is illustrated by the fact that railroads carry more coal than any other mode of transportation. In addition, railroads carry significant amounts of petroleum products, especially LPG, and nuclear fuel materials. In the future, railroads will be expected to carry much ,additional coal, especially western coal, as well as to expand service in transporting eastern coal and other fuels. The railroads' capacity to meet these challenges will depend upon the financial health of the coal-carrying railroads, other demands on these railroads, and the Federal Government's policies in regulation and promotion, or perhaps even outright participation.

The rail share of coal traffic in 1975 was 65 percent of the total 'U.S. coal production, as shown in Table 1. The Carter Administration's National Energy Plan (NEP) seeks to aaieve annual coal production of 1.2 billion tons by 1985, up from 665 million in 1976. The General Accounting Office (GAO), in two recent reports (July 25 and September 22, 1977, references 10 and 11) stated that achieving 1.2 billion tons of annual output by 1985 is highly unlikely, and that it will be very difficult to achieve as much as one billion tons annually by 1985. For analytical purposes, GAO selected two energy growth scenarios representing possible highland low energy demand ranges based on a Bureau of


Mines (BoM) forecast for the high estimate and an Edison Electric Institute (EEI) forecast for-the low estimate. GAO expects energy demand to fall somewhere between the two estimates and assumes that the rail share of coal traffic will remain unchanged. The three scenarios are shown in Table 1. The Bureau of Mines estimate would

TABLE 1. Projected Transportation by Modes (million tons)

1975 1985 2000

Mode Actual Percent EEI BoM NEP EEI BoM

Rail 418 65% 503 637 780 608 1,023

Water 69 11 83 106 132 101 170

Truck 79 12 95 120 144 115 193

Mine-mouth use 74 11 89 113 132 107 181
Other 8 1 9 12 12 11 19

648 100% 779 988 1,200 942 1,586

Source: Reference 11, page 5.6.
Includes slurry pipelines.

yield a 52 percent increase in rail coal traffic by 1985 and more than a 100 percent increase by the year 2000, as compared to 1975. A gradual increase to reach these goals in rail coal traffic would require an average annual increase of lessthan five percent from 1975 to 1985 andan average annual increase of less than four percent from 1985 to 2000. If the higher, 1985 goal of the Administration's National Energy Plan is met and railroads continue to carry the same proportion of coal that


they carried in 1975, rail traffic would increase to 780 million tons in 1985, or an average annual increase of less than seven percent.

Substantial growth in coal traffic is thus expected. Most of this growth is expected to take place in the West, but, as shown in Table 2, the eastern and southern rail districts also are expected to have major increases in traffic. The eastern and southern rail districts currently

TABLE 2. Projected Coal Traffic By Rail District

Total Rail Traffic Percent increase in

1974 1980 each district
Rail District million tons % million tons % (1980 compared with 1974)

Eastern 195 52.6% 288 39.8% 48%

Western 66 17.8 279 38.5 323

Southern 110 29.6 157 21.7 43

Total 371 100.0 724 100.0 95

Source: U.S. Department of Transportation. Transportation Systems Center survey of railroads as contained in the September 22, 1977 GAO
report, page 5.6. (Reference 11)
The eastern rail district consists of all States north of Kentucky and
North Carolina and east of the Mississippi River. The southern district consists of all other States east of the Mississippi River. The western
district consists of all States west of the Mississippi River.

carry the largest amount of coal. Because of the generally poor financial condition of the rail industry and the problems Conrail is having, sig.nificant doubt has been expressed in some quarters about the ability of


the railroads to handle the anticipated substantial growth in coal traffic.

The top 15 coal-carrying railroads are listed in Table 3, along

with various data about their financial health and coal-carrying capacity. The Penn Central became bankrupt in 1970 and has now become part of the Consolidated Rail Corporation (Conrail). Conrail began operations on April 1, 1976. None of the other railroads included in the table are bankrupt although the Illinois Central Gulf and the Chicago and North Western are not financially strong. According to three recent reports produced by the Federal Government (references 8, 9 and 11) the ability of Conrail to handle the anticipated growth in coal traffic is different from that of the other railroads which carry most present and forecasted coal production. Thus, Conrail will be discussed separately from the other railroads. Railroads Other than Conrail. Public concern about the financial health of the railroad industry was heightened recently with the bankruptcy of the Chicago, Milwaukee, St. Paul and Pacific Railroad (Milwaukee Road) in December, 1977. This was the second large railroad outside the Northeast and Midwest to become bankrupt in recent years, and the first having operations reaching all the way to the Pacific Coast. The Chicago, Rock Island and Pacific* Railroad Company (Rock Island), a carrier in the Midwest, went into bankruptcy in 1975 after a merger proposal remained unsettled before the ICC for more than a decade.

The Rock Island serves 13 mid-continent States bordered by Minnesota on the north, Texas and Mississippi on the south, Illinois on the east and


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Colorado and New Mexico on the west. It carries coal westward, connecting with other rail lines for destinations in California and elsewhere. Most of the traffic carried by the Rock Island could be rerouted over competing rail lines.

The Milwaukee Road serves the northern tier of States from Chicago, Illinois to Seattle, Washington, and has a connection as far east and south as Louisville, Kentucky. The Milwaukee Road nearly parallels the larger and financially strong Burlington Northern. The Burlington Northern does not serve Louisville but it does serve Paducah, Kentucky, and has the advantage of a line all the way to the Gulf of Mexico at Galveston, Texas.

The ailing Chicago and Northwestern Railroad extends from Lake Superior

on the north to Kansas City, Independence and St. Louis, Missouri on the south, and from Chicago on the east. to Wyoming on the west. It is in the process of extending a line to coal fields in eastern Wyoming.

The Illinois Central Gulf Railroad, also an ailing line, connects Chicago, in several almost straight lines, with the Gulf of Mexico at New Orleans, Louisiana; Gulfport, Mississippi and Mobile, Alabama. In the south it extends from Shreveport, Louisiana on the west to Birmingham and Montgomery, Alabama on the east. In the north it extends west to Sioux Falls, South Dakota; Sioux City, Iowa; and Omaha, Nebraska.

The poor financial health of some railroads in the Midwest and West have prompted some calls for creating a quasi-government railroad in the Midwest and West similar to Conrail in the Northeast and Midwest. Several days of public meetings sponsored by the Secretary of Transportation in January and February of 1978 were designed to help focus the attention of the public, and


more especially the railroads in the Midwest and West, upon a program to restructure the railroad network in that part of the Nation. The 4R Act grants the Secretary of Transportation authority to facilitate railroad mergers and requires the ICC to render a final decision in rail. merger cases within 31 months from the date a merger petition is filed with it.

It is too early to tell what will be the shape of the resolution to the problem of bankrupt railroads in the Midwest and West, but a recent report (reference 9) by the Federal Energy Administration (now part of the Department of Energy), one by the General Accounting Office (reference 11) and one by the Department of Transportation (reference 8), are valuable aids in determining what the major issues are with respect to the ability of U.S. railroads to carry the present and future coal production of the country. The principal findings of the FEA report are that: (1) All the railroads plan to acquire the equipment that. will be needed to carry the increased coal traffic. (2) Most railroads have already installed heavy duty welded rails.

(3) Capital acquisition needed for expanding track and rolling stock is not viewed by the railroads as a problem. (4) Suddep increases in rail coal traffic, as contrasted with a steady growth in traffic, could result in backlogs and delays in obtaining needed rail and rolling stock due to probable resultant shortages of steel plate, castings and forging, and some component parts such as wheels. (5) Most of the eastern railroads are concerned that the high sulfur coal that many of them now carry ultimately may become uneconomical for fuel use due to clean air standards. It would facilitate capital investment planby both the railroads carrying eastern coal and the railroads carrying


western coal if the Federal Government would establish and maintain a steady, long-term policy toward air pollution (see 3.4.1). (6) The railroads would like the Federal Government to a make strong public commitment to use domestic coal. (Since the FEA report was released, the Carter Administration has proposed such a commitment.) (7) The railroads state that the development of coal slurry pipelines would be a serious setback to railroad expansion and financing plans (see 3.4.6). (8) The ICC now permits only annual aggregate volume rate agreements between railroads and customers. The railroads believe that longer term rate agreements, perhaps five years or longer, would facilitate the expansion of rail facilities (see 3.4.4).

The FEA report states that, "in short, the solvent railroads can handle

future traffic without significant U.S. Government help," and the GAO report agrees with the FEA report.

A Department of Transportation (DOT) report (reference 8) released February 3, 1978, estimates that an investment of $10 billion will be required to handle the increased demand for coal transportation by rail. Between $5 and $7 billion will be needed to repair and buy new rail cars and approximately $4-5 billion will be needed to upgrade and build new track. In many instances the rail capacity already exists and the new traffic will permit more efficient use of investments that are already in place. The report also states that rail equipment financing can be handled efficiently and relatively inexpensively by the use of equipment trust certificates and by leasing equipment from financial intermediaries.


The DOT report concludes that railroads are handling current coal production without any significant problems and probably will be able to do so without great difficulty through 1985 and beyond. The report states that lead times for rail investment decisions are usually shorter than for coal mines using facilities, thus facilitating the capability of railroads to prepare to handle future increases in coal production.

The DOT report made several recommendations: (1) The DOT should consider establishing a coal roads and highway program to assure that near-term highway transportation problems will not seriously hamper coal production.

(2) The DOT should develop a program to identify and alleviate adverse community impacts of expanded rail transportation of coal. (3) The DOT should examine the current rail tariff structure and the question of long-term coal transportation rate contracts. (4) The DOT should use its railroad capital assistance programs to ensure that necessary investments are made in timely fashion by coal handling railroads. (5) An interagency framework should be established for examining the secondary transportation effects of coal production. (6) The DOT should establish a continuing program for monitoring the Nation's coal transportation requirements.

The DOT report states that, although many of the railroads in the Midwest and West that will have the major growth in coal traffic are financially strong and can attract sufficient investment capital for handling the coal traffic, there are some uncertainties that could deter them from doing so. The uncertainties are: (1) doubts about future coal production as a result of environmental problems and user resistance; (2) the possibility that

14-786 0 711 6


coal traffic will be carried by pipelines; and (3) possible community opposition to large increases in coal' unit train traffic.

The DOT report states that some financially weak midwestern railroads might be unable to attract private investment capital and might require Federal assistance such as that available under Title V of the 4R Act. Conrail. The FEA report was much more guarded with respect to Conrail. The report concluded that: (1) by 1985, Conrail will need at least 10,000 new coal hopper cars; (2) massive upgrading of existing track and rolling stock is needed; (3) although several billion dollars have been made available to Conrail for purchasing new rolling stock and for upgrading existing track and rolling stock, it is not known exactly how much of these funds will bemused to upgrade coal-hauling track and equipment; (4) close FEA attention is needed to assure that adequate coalhauling rolling stock is purchased and that sufficient upgrading of coalhauling track and equipment is accomplished. Conrail officials have said that some of its coal lines are not on high-traffic-density lines and will have to compete with other priorities for available funds.

This concern of the FEA is underscored in several recent reports, by the ICC, United States Railway Association (USRA) that oversees Conraills financial situation, and by Conrail, stating that, among other problems, track and equipment were in worse condition than earlier reported and that rail traffic projections were higher than the actual traffic that has been available for rail transportation. These factors, coupled with storm


damage to facilities, unusually cold weather the last two winters (1976-1977 and 1977-1978), and the longest coal strike in U.S. history in 1977-78, will delay the date when Conrail can be expected to earn a profit. Furthermore, it means that the Federal Government will be called upon to provide Conrail with additional financial aid, and that Conrail might have greater pressure on it for use of funds on projects other than to improve its ability to carry more coal. Specific details would be desirable, but are largely unavailable to the public at large at the present time. Other Studies Relating to Coal Movement. The September 22,

1977, GAO report (reference 11) and the FEA report (reference 9) agree that without oversight of Conrail investment decisions, Conrail might not invest in sufficient coal-traffic related purchases and upgrading to handle forecasted coal traffic. These two reports and the DOT report (reference 8) are in agreement-as to the ability of solvent railroads to handle the additional 'coal traffic,

A number of other studies are available on the subject of the

ability of railroads to handle future coal production. A 1974 study by Peat, Marwick, Mitchell & Co. (reference 5) provides even more detail than the GAO report on projected rail freight car requirements to handle increased coal traffic and, in general, is in agreement with the FEA, GAO and DOT studies. The Manalytics study (reference 3) points out specific potential bottlenecks in the rail and barge coal-handling network which should receive the attention of Congress with respect to construction programs on the domestic waterway system. These bottlenecks are discussed at greater length in 3.4.2 as they relate to Western coal.


The Richard J. Barber Associates, Inc. study (reference 6) provides support for the railroad industry ts position that it can handle the projected increased rail coal traffic and that coal slurry pipelines are therefore unnecessary. The Center for Advanced Computation study (references 2 and 3) provides information on the relative cost efficiency of various modes of transporting coal. Information of the type contained in references

2 and 3 could be helpful in the establishment of a congressional policy toward the construction of total coal transportation facilities, such as coal slurry pipelines and the possible impact of such facilities on the existing rail, truck and barge network. Mergers, Abandonments and Intermodal Transportation; Their Effect on Energy Transportation. Railroad mergers have been going on from the beginning of railroading in the United States and have received considerable interest as a tool for improving the economic health of the industry. The Transportation Act of 1920 required the Interstate Commerce Commission to establish a plan for rail mergers and to encourage the railroads to merge according to the plan. This policy was considered a failure and abandoned during the depression of the 1930's. In 1976, a different approach to rail mergers was embodied in the law. The Railroad Revitalization and Regulatory Reform Act of 1976 (usually referred to as the 4R Act) granted the Secretary of Transportation immunity from the antitrust laws in convening meetings of railroad discuss rail mergers. The law also provided funds for the Secretary to use in the encouragement of mergers which he approved. The Act also encouraged mergers by requiring the ICC to complete and issue a final decision in all rail merger petitions within


31 months from the date the original proposal is submitted to it. In furtherance of its responsibilities in rail merger cases, the ICC required its Rail Services Planning Office (RSPO) to conduct a study of the various aspects of rail mergers.

The final report by RSPO was issued on February 1, 1978, and recommended that the ICC issue a policy statement: (1) encouraging rail restructuring through the merger process and spelling out policies which the Commission intends to follow in deciding merger proceedings; (2) recognizing that end-to-end mergers generally provide potential for greater long-term advantages with fewer risks than parallel mergers; (3) emphasizing that voluntary agreement among carriers rather than governmental directive is the preferred method of rail restructuring: (4) acknowledging that the labor protective conditions which it will impose in merger proceedings will be those identified by statute and encouraging the voluntary negotiation of implementing agreements prior to a final decision on the merger; (5) declaring that mergers are not a proper or effective method for dealing with marginal carriers, and that the Commission's primary responsibility is to assure adequate' service rather than to preserve corporate entities; (6) continuing its present policies with respect to national defense as a merger criterion; however, a formal channel should be established with the Department of Defense to provide notice of merger filings at the earliest possible date;

(7) continuing its present procedures on environmental impact and establishing formal channels with appropriate agencies on community impact. In addition, RSPO recommends that: (1) the ICC and DOT take


several specified steps to clarify and simplify the merger process;

(2) the ICC should continue its dialogue with Congress, the transportation community, States and other governmental agencies with a view toward identifying and resolving railroad problems.

The RSPO report concluded that end-to-end mergers provide many opportunities for improving operating efficiencies and entail fewer problems of coordinating the management and labor force of the merged lines than do parallel mergers. Parallel mergers appear to offer greater opportunities to improve the density of traffic on lines, abandon duplicated facilities, and reduce the management and labor forces. But as the merger of the Pennsylvania Railroad and New York Central Railroad demonstrated, these objectives are difficult to achieve. Rail mergers usually take years to be approved and years to. achieve improved operating efficiencies after the merger occurs. Thus, dramatic improvement in the railroads' ability to handle coal as a result of mergers would likely have much more impact in the post 1985 period than in the period between now and 1985. The RSPO report concluded that substitutes to mergers, such as run-through trains, would not be as effective as mergers in improving the operating efficiencies of railroads.

Abandonment of rail lines has been going on gradually for decades and may accelerate as a result of the 4R Act that provides short-term Federal financing for rail lines which the railroads obtain approval from the ICC to abandon. The criteria the ICC must use in deciding abandonment cases are, under the 4R Act, different from those under prior legislation, and the change appears to make abandonments easier. Not enough


experience under the 4R Act has been accumulated, however, upon which to make a conclusive finding. What does seem clear is that many branch lines lose money and that abandonment of these lines will somewhat improve the financial health of railroads.

The Interstate Commerce Act gives the ICC authority to require intermodal connections between railroads and trucks and between railroads and barges. Thus, possible resistance on the part of one carrier to make intermodal connections with a carrier of another mode is not likely to present a problem for policymakers. General Energy Policy Problems. The conclusions that can be

drawn from the discussion above are that, while there may be some geographical 2/
bottlenecks to the use of the most direct rail routes, and some possible delays in acquiring sufficient rolling stock, in general the solvent railroads will be able to obtain sufficient financing to obtain rolling stock and to upgrade roadbed; and suppliers will be able to produce rails, locomotives and coal hopper cars fast enough to meet a steady growth in coal traffic at the rate predicted by the General Accounting Office, and possibly, at the rate targeted in the Carter Administration's National Energy Plan.

While Conrail has received, and is expected to continue receiving,

a substantial amount of Federal assistance, Conrail may not choose freely to invest sufficiently in track and rolling stock to handle future coal production. It may not consider such investment as contributing suffi ciently to its efforts to minimize losses and eventually become profitable. 2/ See the Manalytics study for details on which routes, and for conclusions
somewhat more pessimistic than the other reports about the ability of the
rail and water networks to handle the projected increased coal traffic. An
updated version of the Manalytics report is expected to be released in the
near future.


In order to assure that ample investment is made in coal lines and rolling stock, Congress may have to make such priorities a matter of public

record and establish a mechanism for implementing them. Perhaps this

mechanism would require legislation granting the USRA or the ICC authority

to require Conrail to make these investments, and to evaluate Conrail's

compliance with such standards. Also, Congress might wish to require the

ICC to allow railroads to establish aggregate rate contracts with customers

for terms exceeding one year.


1. Briggs, Richard E. The case against coal slurry pipelines," Transport 2000, July/August, 1977, pp. 20-22.

----- The future rail haul of coal," Transport 2000, May/June, 1977,

2. Center for Advanced Computation, University of Illinois. Comparative
coal transportation costs: an economic and engineering analysis of truck, belt, rail, barge, and coal slurry and pneumatic
pipelines. Prepared for the U.S. Department of the Interior,
Bureau of Mines and the U.S. Federal Energy Administration.
Urbana, Illinois, August, 1977. 8 vols.

3. Manalytics, Inc. Coal transportation capability of the existing rail
and barge network, 1985 and beyond. Prepared for-the Electric
Power Research Institute. San Francisco, September, 1976. 72
pages plus appendices.

4. O'Hara, Edward, Moving coal, Transportation, USA, Fall, 1977. Washington, U.S. Department of Transportation, published quarterly. pp.
2-5. This is a brief article that gives the reader a broad overview of coal transportation (emphasizing rail) and referring to the
Coal Transportation Task Force established by Secretary of Transportation Adams. The Task Force's report is reference 8.

5. Peat, Marwick, Mitchell & Co. Railroad freight car requirements for transporting energy, 1974-1985. Prepared for U.S. Federal Energy Administration, U.S. Department of Commerce, and U.S. Department of Transportation. Washington, November, 1974. Various paging.


6. Richard J. Barber Associates, Inc, The railroads, coal and the National
Energy Plan: an assessment of the issues. Prepared for the following railroads: Burlington Northern, Chicago and North Western,
Kansas City Southern, Missouri Pacific, Santa Fe, and Union Pacific. Washington, September, 1977. 80 pages plus appendices.

7. Schrier, Elliot. Rail haul of coal, transport 2000, July/August, 1977,
pp. 6-7. This is a reply to Richard Briggs' article cited above
entitled "The Future Rail Haul of Coal." Mr. Briggs' article critiqued the Manalytics, Inc. study cited above.

8. U.S. Department of Transportation. Coal Transportation Task Force.
Transporting the Nation's coal -a preliminary assessment. Washington, January, 1978. Various pagings.

9. U.S. Federal Energy Administration. Office of Coal. Coal rail transportation outlook. Washington, May, 1976. Various pagings.

10. U.S. General Accounting Office. An evaluation of the National Energy
Plan. Washington, July 25, 1977. Report number EMD-77-48. Various pagings.

11.-----U.S. coal development -promises, uncertainties. Washington,
September 22, 1977. Report number EMD-77-43. Various pagings.

112'. U.S. Interstate Commerce Commission. Rail Services Planning Office.
Rail merger study. 7 vols. plus a final report. Washington, 1977
and 1978. Various pagings.

13. U.S. Library of Congress. Federal aid to domestic transportation.
Washington, May 1977. 169 p.


3.1.8. Effects of Hazardous Materials Transportation Regulations on the
Delivery of Energy Products Issue Definition. The hazardous materials transportation regulations, issued by the Department of Transportation (DOT), are designed to promote the safe shipment handling, and cont-ainerization of hazardous materials in commerce. Energy products are generally classified as being hazardous materials. Accordingly, transporters of energy products are compelled by law to obey DOT regulations.

Several industry and government officials interviewed for this study maintained that DOT regulations have not been a major impediment to the delivery of energy products. However, these spokesmen expressed concern over two major areas: overlapping and conflicting Federal and State regulations, and limited enforcement of DOT regulations. As the Congress continues its oversight responsibility over the transportation of hazardous materials, increased attention might be directed at these concerns.. Introduction. Substances such as liquefied petroleum

gas, gasoline, naphtha, nuclear materials, and fuel oil are transported in large quantities to supply this Nation with its energy needs. Under the Hazardous Materials Transportation Act, P.L. 93-633, these energy products are classified as hazardous materials since they may "pose an unreasonable risk to health and safety or property when transported in commerce." When improperly handled or transported, these materials can cause violent explosions, result in tremendous fires, and otherwise endanger human life and property.

Prepared by Paul Rothberg, Analyst, Science Policy Research Division.


Federal and State governments have issued regulations to protect

the public from unsafe transport, storage, and handling of these materials.

These regulations directly influence the containerization, transporting, and administrative operations of railroad carriers, petroleum companies,

ship owners, and other persons involved in the transport of hazardous

materials. For example, these regulations may specify the type of container that is allowable for transporting hazardous materials,

the requirements for identification signs on transporting vehicles, i the marking of containers, and administrative procedures, such as

shipping papers. In addition, these regulations specify procedures

for reporting an accident involving the transportation of a hazardous material. An array of special regulations pertain to the shipment of hazardous materials by rail, public highway, waterway, and air..

As part of this study, several industry spokesmen were interviewed

to survey their views on the effect of hazardous materials transportation 1/
regulations on the delivery of energy products. Their specific

concerns and possible solutions offered by these spokesmen are presented in this chapter. and Regulations. The DOT has primary responsibility

for regulatory activities concerning the transportation of hazardous materials. DOT's principal authority for issuing hazardous materials

1/ Individuals interviewed include: William Miller, C.T. Sawyer, and
Ronald Jones of the American Petroleum Institute; Clifford Harvison of
the National Tank Truck Carriers, Inc.; William Jennings, a private
consultant; Richard Stock of the National LP-Gas Association; and
several other industry representatives.


transportation regulations and enforcing Federal standards includes: the Federal Aviation Act of 1958, the Dangerous Cargo Act of 1940, the Tank Vessel Act of 1936, the Ports and Waterways Safety Act, the Hazardous Materials Transportation Act, the Federal Railroad Safety Act of 1970, the Federal Water Pollution Control Act (as amended), and the Transportation of Explosives Act. Under these Acts, the Department regulates classification, marking and labeling, placarding, packaging, shipping papers, compatibility of stowage, and handling of hazardous materials. Also, the Department has authority for research related to the transportation of hazardous materials, collection and compilation of data on certain accidents involving materials in transport, cooperation with the Attorney General for enforcement of laws violated during the transport of hazardous materials, international and interagency coordination, and accident investigations.

With the passage of the Hazardous Materials Transportation Act in 1975, Congress sought to improve the regulatory and enforcement authority of the Secretary of Transportation in dealing with hazardous materials. This Act seeks to protect the Nation against the risk to life and property inherent in the transportation of these substances in commerce. Under this Act, the Secretary of Transportation is authorized to establish criteria for handling hazardous materials. Such criteria may include, but need not be limited to: type and frequency of inspection; a minimum number and level of training and qualification for personnel handling hazardous materials; equipment to be used for detection, warning, and control of risks posed by such materials; specifications


regarding equipment and facilities used in the handling of such materials; and a system of monitoring safety assurance procedures for the transportation of such materials. Also, this law authorizes the Secretary of Transportation to issue regulations for the safe transportation of hazardous materials. These regulations may govern any safety aspect which the Secretary deems necessary or appropriate.

Certain provisions of the Hazardous Materials Transportation

Act seek to accomplish:

-- The removal of statutory restrictions on the Secretary's authority to centralize DOT regulatory activities relating to the safe transportation of hazardous mater als by various modes;

The extension of the Secretary's authority to impose civil penalties for the illegal transportation of hazardous materials by various modes; A significant increase in the criminal sanctions for violations of hazardous materials regulations;

Provisions of various forms of specific relief (court action) as additional enforcement tools;

A broadening of the definition "commerce" to include transportation which affects interstate transportation; A broadening of the application of hazardous materials regulations

in certain geographical locations;

Federal preemption of inconsistent State and local regulations

1 to the transportation of hazardous materials;

Authorization for the Secretary to require shippers and carriers

of hazardous materials, and manufacturers of hazardous materials containers, to register with the Department of Transportation.


Since the passage of this Act, Congress has continued its oversight

of Federal laws and regulations concerning the transportation of hazardous materials. For example, the Subcommittee on Surface Transportation of the Senate Commerce Committee held hearings in 1976 to evaluate the effectiveness of the DOT and the Ford Administration in implementing the Act. During these hearings, DOT-spokesmen stated that progress had been made in implementing only some of the provisions of the Act. However, it was announced that the Department was undertaking a major consolidation and simplification of existing Federal regulations governing the transportation of hazardous materials. Over the long run, this consolidation may improve the Department's capabilities to carry out its responsibilities and may aid shippers and carriers in understanding and complying with

Federal regulations.

In addition to regulations promulgated by the Department of Transportation, the Occupational Safety and Health Administration, United States Geological Survey, Army Corps of Engineers, and the Environmental Protection Agency issue regulations and implement policies that bear on the transportation of hazardous materials. 1'ne Department of Energy and the Nuclear Regulatory Commission have important responsibilities in the transportation of radioactive materials. This subject area is discussed in chapters 3.1.5. and 3.1.6. of this study. There are also numerous State agencies that deal witb pipeline safety and transportation of hazardous energy products. Areas of Concern. Industry spokesmen have indicated

that the regulatory system governing the transportation of hazardous energy products is generally working satisfactorily. Large quantities


satisfactorily. Large quantities of energy products such as liquefied petroleum gas, gasoline, fuel oil, and naphtha are transported daily with few incidents. The number of deaths each year from transportation accidents involving all hazardous materials is relatively low -- usually about 30 -- in comparison to the potential number of deaths that might occur from a major catastrophe.

industrial groups generally favor many Federal regulations that

promote the safe transport of hazardous materials. These regulations help reduce potential dangers to their employees, and protect their investments in equipment and materials. Industry spokesmen stated that they find the Federal regulatory system "basically sound," "working pretty well," and that they try to develop "a harmonious relationship with government."

The industry statements presented above seem compatible with an

opinion expressed by the Acting Chief of the Office of Hazardous Materials Operations of the DOT, who stated that it appears that DOT hazardous materials regulations have generally not limited the transportation of 2/
hazardous energy products to market.

Although there appears to be a consensus that the regulatory system

is working satisfactorily, several industry representatives have expressed concern over three areas: (1) overlapping and conflicting regulations,

(2) lax enforcement of existing Federal regulations, and (3) costs of regulations.

A. Overlapping and Conflicting Regulations

Several Federal agencies and many State governments issue regulations that affect the transportation of hazardous materials. According to some

2/ Telephone'communication with Paul Sea, DOT, 1977.


industry spokesmen, this sometimes results in conflicting, duplicative, impractical, and unnecessary regulations. Presented below are several examples of testimony and interview data that illustrate these concerns.

Mr. Clifford Harvison, Managing Director of the National Tank Truck

Carriers, Inc., recently criticized in congressional testimony the limited expertise of many Federal officials who regulate the transportation of hazardous materials. Although Mr. Harvison had high praise for the high quality of professionalism that has developed within the cadre of hazardous materials regulators at the Department of Transportation, he argued that regulations issued by some Federal agencies, such as the Occupational Safety and Health Administration and the Environmental Protection Agency, "1are so wholly impractical in their application to transportation as to 3'
literally prohibit compliance.'r

Mr. Harvison also stated that there was duplication of effort in the Federal regulatory system. He argued "..I'm convinced that only clear congressional mandate can prevent the wasteful duplication of effort and the 'left hand not knowing what the right hanti is doing' syndrome that produces poor, disjointed regulation -- regulation which neither serves 4/
nor protects anyone." For example, Mr. Harvison indicated that regulations issued by the Occupational Safety and Health Administration pertaining to vinyl chloride conflicted with regulations issued by the Department of Transportation. As a result, he stated:

3/ U.S. Congress. Senate. Committee on Commerce, Subcommitte on Surface Transportation. Hazardous Materials Transportation Act.
March 4, 1976. Serial No. 94-93, p. 37. 4/ Ibid., p. 38.


"We have two sets of shipping paper requirements as well as differing sets of loading, unloading, labeling, and placarding equIpments.

Mr. Ronald Jones of the American Petroleum Institute maintained

that the vast array of complex and sometimes conflicting regulations issued by Federal and State agencies has resulted in special problems for the petroleum industry. For example, he indicated it is difficult for this industry to operate a single type of gasoline truck that could travel throughout the United Sates because State regulations for safety and pollution devices used on these vehicles vary.

In addition, Mr. Jones maintained it is difficult for transporters of petroleum to keep current with all hazardous materials transportation regulations. (These regulations require over 1,000 pages of print in the Code of Federal Regulations.) He argued that State laws and regulations simply add another "layer on top of Federal requirements. Some State laws, according to this spokesman, were restricting delivery of energy products to market. He cited a recently-passed Washington law that limited the size of tankers which could enter the waters of that State. Thus, under this law, it appears that only "smaller" tankers carrying smaller" loads of energy products will be allowed to enter Puget Sound in Washington.

Mr. Jones summarized that the combination of problems resulting from

(1) too many Federal agencies involved in writing regulations, and (2)

5/ Ibid.

24-786 0 78 7


overlapping and conflicting Federal and State regulations, resulted in an 6/
impediment to the efficient transportation of energy products.

B. Lax Enforcement of Some Federal Hazardous Materials Transportation

An industry spokesman interviewed for this study maintained that the Federal Government does not rigorously enforce all of the hazardous materials transportation regulations. Mr. Clifford Harvison stated that many independently owned tank truck operators who transport hazardous materials do not meet current Federal standards. Specifically, these vehicles do not meet DOT placarding standards that require clearly marked warning signs on vehicles transporting flammable liquids. He writes:

There are, however, thousands of trucks, operated daily laden
with (primarily) petroleum products which have (literally) no
restrictions. They are independently owned, rarely have a sign on
the door, and are driven under the aegis of brokers or commission
agents. Technically, they are under DOT jurisdiction, however, the
total lack of identification on the trucks makes safety enforcement a laughing matter. They don't acknowledge DOT regulations;
their drivers know no hours of service regulations; they don't
even report accidents. 7/

These "illegal" shipments are apparently undertaken even though strict penalties may be imposed on violators. As stated in Section 110 (a) of the Hazardous Materials Transportation Act, "Whoever knowingly commits an act which is in violation of any regulation, applicable to

6/ Personal communication with Ronald Jones, American Petroleum
Institute, 1977.

7/ Personal communication with Clifford Harvison, Natural Tank Truck
Carriers, Inc., 1977.