[Federal Register Volume 85, Number 15 (Thursday, January 23, 2020)]
[Notices]
[Pages 4055-4058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-01095]
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SURFACE TRANSPORTATION BOARD
[Docket No. FD 36186; Docket No. FD 36186 (Sub-No. 1)]
Texas Railway Exchange LLC--Construction and Operation
Exemption--Galveston County, Tex.; Petition of Texas Railway Exchange
LLC for Issuance of a Crossing Order Pursuant to 49 U.S.C. 10901(D)
On November 21, 2018, Texas Railway Exchange LLC (TREX) filed a
petition for an exemption under 49 U.S.C. 10502 from the prior approval
requirements of 49 U.S.C. 10901 to construct and operate approximately
one-half mile of rail line in Galveston County, Tex. (the Line), to
provide Texas International Terminals Ltd. (TI Terminals) with a
connection to BNSF Railway Company (BNSF) (Petition for Exemption).
TREX also requested that the Board conditionally grant its petition
within 90 days, subject to the issuance of a final Board decision on
the proposed construction after completion of the environmental review.
By decision served on February 15, 2019, the Board instituted a
proceeding under 49 U.S.C. 10502(b). The Board's Office of
Environmental Analysis (OEA) issued a Draft Environmental Assessment
(EA) on February 22, 2019, examining the potential environmental
impacts of TREX's proposal and requesting public comments, as required
by the National Environmental Policy Act (NEPA), 42 U.S.C. 4321-
4370(f).\1\ After considering the comments received in response to the
Draft EA, OEA issued a Final EA on May 2, 2019. Based on its analysis,
OEA recommended environmental conditions to avoid, minimize, or
mitigate the potential environmental impacts of the proposed
construction and operation.
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\1\ Because TREX would need to cross the UP line to implement
the proposed construction project, OEA's environmental analysis
assessed both the proposed construction and operation of the Line
and the planned crossing of UP's tracks.
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On February 22, 2019, TREX filed a petition for issuance of a
crossing order
[[Page 4056]]
pursuant to 49 U.S.C. 10901(d) (Crossing Petition) to allow the
proposed Line to cross tracks owned by Union Pacific Railroad Company
(UP).
After considering both the rail transportation and environmental
issues, the Board will grant the Petition for Exemption subject to the
recommended environmental mitigation measures in the Final EA.
Consequently, the Board will deny as moot TREX's request for a
conditional grant of the exemption. The Board will also grant the
Crossing Petition subject to the recommended environmental mitigation
measures in the Final EA that pertain to the crossing, and require the
parties to negotiate the compensation and any remaining terms for the
crossing.
Background
TREX is a corporate affiliate of TI Terminals, which owns and
operates a liquid and dry bulk terminal in Galveston, Tex. In its
Petition for Exemption, TREX states that the purpose of the proposed
Line is to provide direct and permanent railroad service between BNSF's
Valley Yard and TI Terminals' loop track. (Pet. for Exemption 3 &
Sullivan V.S. ]] 38-39.) According to TREX, TI Terminals' customers
currently rely on reciprocal switching service from UP for BNSF trains
to access TI Terminals. TREX states that UP's reciprocal switching
entails restrictive operating conditions and rules that require several
unnecessary train movements that result in significant delays. (Id. at
3 & Sullivan V.S. ]] 14, 16-31, 32.) TREX states that direct access to
TI Terminals would eliminate the need for the existing reciprocal
switching service and the associated difficulties arising from multiple
train movements and car switching events between the BNSF Valley Yard,
the UP Interchange Yard, and TI Terminals' industry and loop tracks.
(Id. at 4.)
On March 14, 2019, UP filed its reply to TREX's Petition for
Exemption. UP argues that this is not a routine construction case and
opposes issuance of a conditional grant, because the proposed Line must
cross UP's tracks and extend laterally over other property owned by UP.
(UP Reply 2, Mar. 14, 2019.) UP objects to TREX's characterization of
UP's current service to TI Terminals, although UP acknowledges that
service issues are normally irrelevant in construction cases. (Id. at 3
(citing Midwest Generation, LLC--Exemption from 49 U.S.C. 10901--for
Constr. in Will Cty., Ill., FD 34060, slip op. at 4 (STB served Mar.
21, 2002)).) According to UP, TREX fundamentally misrepresents the
physical constraints on UP's ability to switch cars delivered by BNSF
into TI Terminals' facility. (UP Reply 3, Mar. 14, 2019.) UP further
states that TREX misrepresents UP's responses to TI Terminals' requests
for special switches. (Id. at 4.)
The Board has received letters in support of TREX's Petition for
Exemption from United States Representative Randy Weber, Canadian
Advantage Petroleum Corporation, and Archer Daniels Midland Company.
Pursuant to the procedural schedule for the Crossing Petition, set
by the Board in a decision served April 4, 2019, UP filed its reply to
the Crossing Petition on June 18, 2019. In its reply, UP consents to
the issuance of the crossing order and states that it is prepared to
negotiate with TREX the terms of operations and the amount of payment.
On June 28, 2019, TREX filed its rebuttal, asserting that UP's consent
establishes that TREX has fully satisfied the Board's section 10901(d)
standards.
Subsequently, counsel for TREX indicated to OEA that TREX was
considering modifying the type of crossing to be used in crossing UP's
tracks. On August 5, 2019, the Board issued a decision directing TREX
to file a report updating the Board on the status of discussions with
UP regarding the possible modification of the proposed crossing
configuration. TREX filed its report on August 15, 2019, stating that
the parties had held discussions on the proposed routing, crossing, and
operations, as well as related matters, and were engaged in further
discussions. On November 7, 2019, following an October 11, 2019 Board
order requesting an update on the parties' discussions, TREX submitted
a status report stating that the parties' discussions have not resulted
in an agreement to modify the type of crossing or routing specified in
the Crossing Petition, and that TREX has elected to move forward with
the proposed crossing configuration in its Crossing Petition.
On January 6, 2020, Representative Weber filed a letter requesting
the Board promptly issue final decisions on TREX's Petition for
Exemption and Crossing Petition. On January 7, 2020, TREX filed a
request that the Board issue final decisions as soon as possible, and
by no later than January 31, 2020.
Discussion and Conclusions
Petition for Exemption
Rail Transportation Analysis. The construction and operation of new
railroad lines requires prior Board authorization, either through
issuance of a certificate under 49 U.S.C. 10901 or, as requested here,
through an exemption under 49 U.S.C. 10502 from the formal application
procedures of section 10901. Section 10901(c) directs the Board to
grant rail construction proposals unless it finds the proposal
``inconsistent with the public convenience and necessity.'' See Alaska
R.R.--Constr. & Operation Exemption--Rail Line Extension to Port
MacKenzie, Alaska, FD 35095, slip op. at 5 (STB served Nov. 21, 2011),
aff'd sub nom. Alaska Survival v. STB, 705 F.3d 1073 (9th Cir. 2013).
Under section 10502(a), the Board must exempt a transaction or
service from regulation when it finds that: (1) Regulation is not
necessary to carry out the rail transportation policy of 49 U.S.C.
10101; and (2) either (a) the proposal is of limited scope, or (b)
regulation is not needed to protect shippers from an abuse of market
power.
Based on the record, the Board concludes that the proposed
construction and operation of the Line qualifies for an exemption under
section 10502 from the formal application procedures of section
10901.\2\ The formal application procedures of 49 U.S.C. 10901 are not
necessary in this case to carry out the rail transportation policy. The
requested exemption would minimize unnecessary expense associated with
the preparation and filing of a formal construction application,
expedite regulatory decisions, and reduce regulatory barriers to entry
for the Line. See 49 U.S.C. 10101(2), (7), (15). Moreover, construction
and operation of the Line would allow more effective competition for
business at TI Terminals, thereby advancing the development and
continuation of a sound rail transportation system with effective
competition among rail carriers. 49 U.S.C. 10101(1), (4). Other aspects
of the rail transportation policy would not be adversely affected.
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\2\ As TREX acknowledges, upon construction of the Line, TREX
will have a common carrier obligation to provide service on the
Line. (Pet. for Exemption 5.) TREX states that it expects to enter
into overhead trackage rights arrangements for BNSF to operate over
the Line to serve TI Terminals. Alternatively, if necessary, TREX
would either contract with a short line railroad or provide its own
service directly to any customers located on the Line, or enter into
arrangements with TI Terminals to provide private switching of BNSF
trains to TI Terminals. (Id.)
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In addition, consideration of the proposed rail line under section
10901 is not needed to protect shippers from an abuse of market power.
The construction and operation of the proposed Line by TREX would
enhance competition by providing a new rail
[[Page 4057]]
option for TI Terminals \3\ and allowing more efficient movement of
trains between BNSF's tracks and TI Terminals.\4\
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\3\ UP argues that the Board should not credit TREX's claims
that the proposed construction will improve BNSF's competitive
position in relationship to UP, as such claims are inconsistent with
TREX's claim that the project should not increase the total volume
of traffic moving to TI Terminals. (UP Reply 6.) However, as TREX
explains, the purpose of the proposed construction is to provide
direct and permanent railroad service between BNSF's Valley Yard and
TI Terminals' loop track to replace the existing reciprocal
switching arrangement, not to increase the total volume of rail
traffic moving to TI Terminals. (Pet. for Exemption 3, 6; see also
UP Reply, Attachment D at 2-4.)
\4\ Because regulation of the proposed construction and
operation is not needed to protect shippers from the abuse of market
power, the Board need not determine whether the proposed transaction
is limited in scope. See 49 U.S.C. 10502(a)(2).
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UP's opposition to the Petition for Exemption is based on (1)
TREX's characterization of UP's service to TI Terminals, and (2) TREX's
request for a conditional grant of the exemption. These concerns do not
warrant denying TREX's Petition for Exemption. First, the Board need
not make, and is not making here, a determination as to the adequacy of
UP's current service to TI Terminals. ``[T]he rail transportation
policy of 49 U.S.C. [ ] 10101 contemplates competition as a means of
ensuring that shippers receive reasonable service at reasonable rates.
A showing that the incumbent railroad's service is inadequate is simply
not necessary to obtain authority for construction of a competing
line.'' Midwest Generation, FD 34060, slip op. at 9. Second, as noted
above, the Board is denying as moot TREX's request for a conditional
grant of the exemption.
For these reasons, the Board concludes that the evidence on the
transportation-related aspects of this case demonstrates that the
proposed construction and operation of the Line qualifies for an
exemption from the prior approval requirements of section 10901. Given
the statutory presumption favoring rail construction and the evidence
presented, the requested exemption from section 10901 has met the
standards of section 10502 on the transportation merits.
Environmental Analysis. NEPA requires federal agencies to examine
the environmental effects of proposed federal actions and to inform the
public concerning those effects. See Balt. Gas & Elec. Co. v. Nat. Res.
Def. Council, 462 U.S. 87, 97 (1983). Under NEPA and related
environmental laws, the Board must consider significant potential
beneficial and adverse environmental impacts in deciding whether to
authorize a railroad construction project as proposed, deny the
proposal, or grant it with conditions (including environmental
mitigation conditions). While NEPA prescribes the process that must be
followed, it does not mandate a particular result. See Robertson v.
Methow Valley Citizens Council, 490 U.S. 332, 350-51 (1989). Thus, once
the adverse environmental effects have been adequately identified and
evaluated, the agency may conclude that other values outweigh the
environmental costs. Id.
The Environmental Review Process. On February 22, 2019, OEA issued
for public review and comment a Draft EA, addressing the potential
environmental impacts of the proposed project, including both the
construction and operation of the Line and the proposed crossing of
UP's line. The Draft EA considered three alternatives in detail: (1)
The No-Action Alternative; (2) the Green Alternative (with two
potential designs, Option A and Option B); and (3) the Blue Alternative
(with two potential designs, Option A and Option B).\5\ (Draft EA ES-11
to ES-12.)
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\5\ Each of the alternatives is also discussed in the Final EA.
(See Final EA 1-2 to 1-3.)
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The Draft EA concluded that the Green and Blue Alternatives, and
Options A and B associated with each of those alternatives, would have
similar, but not significant, environmental impacts if the mitigation
measures set forth in the Draft EA were imposed. (Draft EA 6-1 to 6-2.)
Accordingly, OEA determined that the Environmental Impact Statement
(EIS) process is unnecessary. (Id. at 6-1 to 6-2.)
In response to the Draft EA, comments were received from TREX; the
Texas Department of Transportation, Rail Division (TxDOT); the Texas
General Land Office; and the Texas Parks and Wildlife Department
(TPWD). (Final EA 1-11 to 1-12; 2-1 to 2-10.) On May 2, 2019, OEA
issued a Final EA concluding the environmental review process. In
response to the comments received, OEA revised certain mitigation
measures preliminarily recommended in the Draft EA and added one new
mitigation measure. OEA's final recommended mitigation measures also
reflect TREX's proposed modifications to address the concerns raised by
TxDOT and TWPD in those agencies' comments. (See Final EA 3-1 to 3-9.)
Based on its review of the available information, OEA concluded that,
if the recommended mitigation measures detailed in the Final EA are
imposed, neither the Green Alternative nor the Blue Alternative
(including the two design options for each alternative (Options A and
B)) would result in any significant environmental impacts. (Final EA 3-
1.) OEA recommended that the Board authorize both the Green and Blue
Alternatives, although if TREX is able to obtain the access over UP's
tracks needed to construct the Blue Alternative, OEA recommended that
TREX construct and operate that alternative to minimize impacts to
wetlands and waterways. (Final EA 3-2.) In the event TREX is unable to
obtain the access needed to construct and operate the Blue Alternative,
then OEA recommended the Green Alternative. (Final EA 3-2.)
The Board's Analysis of the Environmental Issues. The Board will
adopt the analysis and conclusions made by OEA. As such, the Board
adopts the Draft EA (as modified by the Final EA) and Final EA,
including the final recommended mitigation measures. The Board is
satisfied that OEA has taken the requisite hard look at the potential
environmental impacts associated with the proposed construction and
operation of the Line and properly determined that, with the
recommended environmental mitigation in chapter 3 of the Final EA, the
proposed project will not have potentially significant environmental
impacts, and that preparation of an EIS is unnecessary.
Crossing Petition
Under 49 U.S.C. 10901(d)(1), a rail carrier may not block any
construction or extension authorized by the Board under 49 U.S.C. 10901
by refusing to permit the crossing of its property if: (A) The
construction does not unreasonably interfere with the operation of the
crossed line, (B) the operation does not materially interfere with the
operation of the crossed line, and (C) the owner of the crossing line
compensates the owner of the crossed line.
UP consents to issuance of the crossing order requested by TREX,
and the parties indicate that they are prepared to negotiate to reach
an agreement on the compensation due to UP and terms for operations.
(UP Reply 2, June 18, 2019; Crossing Petition 32-33.) If the parties
are unable to agree on the amount of payment, or any remaining terms,
either party may submit the matters in dispute to the Board for
determination. 49 U.S.C. 10901(d)(2).
Conclusion
After considering the various rail transportation and environmental
issues and the record as a whole, the Board finds that the petition for
exemption to allow construction and operation of the
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Line should be granted, subject to compliance with the environmental
mitigation set forth in the Final EA, for either the Green Alternative
(Option A or B) or the Blue Alternative (Option A or B).\6\ The Board
will also grant the unopposed Crossing Petition.
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\6\ The mitigation conditions apply both to the construction and
operation of the Line and the proposed crossing over UP's tracks. As
previously noted, OEA considered the potential impacts from both the
Line and the possible crossing in the Draft and Final EA.
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This action, as conditioned, will not significantly impact the
quality of the human environment or the conservation of energy
resources.
It is ordered:
1. TREX's petition for an exemption under 49 U.S.C. 10502 from the
prior approval requirements of 49 U.S.C. 10901 to construct and operate
the Line is granted as discussed above.
2. TREX's request for a conditional grant of the petition is denied
as moot.
3. The Board adopts the environmental mitigation measures set forth
in the Final EA and imposes them as conditions to the exemption granted
here.
4. TREX's petition for issuance of a crossing order pursuant to 49
U.S.C. 10901(d) is granted.
5. Notice will be published in the Federal Register on January 23,
2020.
6. Petitions for reconsideration must be filed by February 6, 2020.
7. This decision is effective on the date of service.
Decided: January 16, 2020.
By the Board, Board Members Begeman, Fuchs, and Oberman.
Brendetta Jones,
Clearance Clerk.
[FR Doc. 2020-01095 Filed 1-22-20; 8:45 am]
BILLING CODE 4915-01-P