Smart regulations help rail safety, U.S. economy

Despite the growth of domestic oil production in areas like North Dakota, perhaps no other state is as closely linked to the energy sector as Texas. Signs of cooperation among major oil producers is giving some observers cautious optimism about the future of the global energy sector. This is welcome news, not only for the ports in Galveston and the fields in Odessa-Midland, which have seen deep cuts due to lower demand and production, but also for the freight rail industry, which shipped roughly 17 percent fewer carloads of crude oil in 2015 compared to 2014.

While crude oil shipments are significantly less for many railroads than say, coal, moving this energy source is critical to a host of industries and the U.S. economy. Heightened domestic energy production has lowered fuel costs for consumers, gotten the U.S. closer to energy independence and has created thousands of high-paying jobs.

That is why it is increasingly important for the freight rail industry to be able to continue investing in its privately owned and maintained infrastructure to ensure oil is safely moved across the country.

Railroads are privately investing an average of $25 billion annually, including $30 billion in 2015 alone, to maintain and further strengthen infrastructure and equipment across the nation’s 140,000mile rail network, including more than 10,000 miles in Texas.

This includes the development of innovative new technologies that are making an already safe network even safer, including ultrasound technology to detect microscopic flaws in steel track and highly sophisticated automatic braking systems.

The results of these safety investments and employee training are clear: The freight train accident rate in 2015 reached an all-time low, according to the Federal Railroad Administration. Today, trains carrying cargo such as crude oil reach their destinations without incident 99.99 percent of the time.

But railroads’ ability to make these investments has not happened by chance. In fact, it is the direct result of smart public policy, as we’ve heard this week at the Oil & Gas Safety Conference, which ends Wednesday in Houston.

At its core, the current regulatory structure for the industry allows railroads to earn the revenues needed to make the private investments in its infrastructure and technology necessary to meet the freight needs of American businesses and consumers. Railroads can act like other private businesses, deciding how they compete with one another, manage the various pieces of their network, price their services and meet market demand.

But this balanced economic structure and the playing field remains threatened. Not long ago, the nation’s freight rail industry faced an uncertain future. Overregulation prevented freight railroads from effectively competing with trucks and other freight-hauling transportation. During that time, 20 percent of the nation’s railroad miles were operated by bankrupt entities, and nearly 50,000 miles across the network faced poor conditions.

The U.S. economy, deeply interconnected to the movement of commodities, can ill afford a repeat of those dire days. That is why the work of Texas legislators is critical to preventing history from repeating itself.

Railroads must maintain their ability to manage their businesses, such as the freedom to respond to the marketplace, set their own prices according to demand and to operate over their most efficient routes. America’s rail network is the envy of the world because it delivers reliable, safe and affordable service — almost all through its own dollars, not those of the U.S. taxpayer.

A strong and financially sound freight rail industry is crucial for the health of our nation’s economy and the safety of communities in which railroads operate. Congress must ensure the legacy of partial deregulation remains in place, and federal regulators should resist placing unnecessary regulations and red tape on railroads that hinder their ability to reinvest in their infrastructure.

Because when railroads move, from oil to consumer goods, America moves.