Shuster: Don’t Regulate Freight Rail System
America has the greatest freight rail network in the world. Our system is the most efficient of its kind and essentially relies on no subsidies from the federal government. More than a century ago, America’s railroads ushered in the great advancements in industry that sparked America’s emergence as an economic power on the world stage. America’s railroads revolutionized transportation, gave promise to freedom of movement and made business more efficient.
Today, we find ourselves in the midst of a freight rail renaissance. America’s freight railroads carried more than 2.26 billion tons of freight in 36 million cars over 140,000 miles of track in 2008. Dollar for dollar, the freight rail industry carried this cargo more efficiently and at a lower operating cost than other modes of transportation, with rail fuel efficiency up 94 percent since 1990.
Railroad’s resurgence could not have come at a better time. Highway congestion and environmental concerns have become increasingly important, and railroads are an effective means of mitigating both issues. A single freight train takes 280 trucks off the road and can move a ton of goods 457 miles on one gallon of diesel. If just 10 percent of the trucks on the road were shifted to freight rail, America would save 1 billion gallons of fuel each year.
This massive gain in fuel economy has an equally important environmental benefit. Freight rail is one of the greenest modes of transportation available. According to recent statistics, if just 10 percent of freight was switched from long-haul trucks to rail, greenhouse gas emissions would fall by more than 12 million tons. You’d need to plant more than 280 million trees to equal what freight rail can do.
Credit also has to be given to CSX Corp. and Norfolk Southern Corp. for their efforts in developing the National Gateway and Crescent Corridor. CSX’s National Gateway will convert more than 14 billion highway miles to rail. It is expected that this system will reduce fuel consumption by 2 billion gallons and shipping costs by $3.5 billion. Norfolk Southern’s Crescent Corridor will similarly reduce carbon emissions by 2 million tons per year and save 170 million gallons of gas annually.
Yet given its successes and self-reliance, the railroad industry finds itself back in Congress’ cross hairs. The question is this: Will America’s railroads continue to be given the freedom necessary to grow their industry without direct interference by the federal government, or will Congress reregulate the industry?
Reregulation would be a potentially catastrophic public policy that could erase 30 years of positive growth and threaten to reduce the railroads to ruinous decreases in services and disinvestment not seen since the 1970s. I firmly believe that if Congress reregulates rail, it will be only a matter of time before our once self-reliant railroads are forced to rely on taxpayer dollars to invest in infrastructure and safety improvements as federal mandates mount.
If railroads are not free to put their dollars into the projects that make the most economic sense and are instead forced to spend their profits complying with legislative mandates, the long-term viability of the industry is threatened.
Instead of penalizing the rail industry for its success, Washington should be promoting new investment to keep America’s railroads in the driver’s seat of the global economy. That’s why I support tax credits for the expansion and rehabilitation of the nation’s rail infrastructure.
Tax credits are a proven policy tool to encourage businesses to invest in worthwhile projects. Because the railroads still pay for their projects under tax credit plans, tax credits ensure that the railroads will only pursue projects that make sense. Direct grants, on the other hand, could be seen as “free money” that would not be subject to the same rigorous business decisions. There are two tax credit bills that I support, including a 25 percent tax credit for rail projects that expand the rail network and ease congestion, and a short line tax credit that expired at the end of last year.
America’s railroads are at a crossroads. The direction that Congress moves will have a lasting effect on American competitiveness. Washington must resist the urge to overregulate an industry that has proven to be largely self-sufficient and capable of weathering economic stress. I will do my part as a member of the Transportation and Infrastructure Committee to make sure it does not happen.
Rep. Bill Shuster (R-Pa.) is a member of the Transportation and Infrastructure Committee and ranking member of the Subcommittee on Railroads, Pipelines and Hazardous Materials.