US infrastructure expansion faces local opposition
By Nick Carey
ROCHESTER, Minn., July 14 (Reuters) - Rochester doesn't mind railroads -- unless there's a possibility that they could disturb the southern Minnesota city's most important resident, the Mayo Clinic.
Both the city government and the world-famous medical center are fighting a $6 billion network expansion by Dakota, Minnesota & Eastern Railroad to bring coal to the Midwest from Wyoming's Powder River Basin. The project would include upgrading DM&E's line through Rochester to accommodate heavy coal trains.
"The clinic is the biggest private employer in Minnesota, and we can't have that put at risk," said Dennis Hanson, president of Rochester's city council.
The conflict is emblematic of tensions between U.S. communities and transport companies.
"People want easy access to goods and services; they want electricity," said Fitch Ratings analyst Stephen Brown. "But they don't want the risk of noise or pollution that may accompany that access."
Profits at transport companies have soared in recent years along with demand for their services. They are benefiting from two trends -- double-digit increases in U.S. imports as the nation outsources its manufacturing base to developing countries like China and soaring demand for coal as a cheap alternative to increasingly expensive natural gas.
Both trends have led to a need for more trains and trucks to haul goods.
But rail and trucking networks are strained as demand outstrips capacity, requiring additional infrastructure. This brings the companies up against people who live near the proposed new sites -- spawning the catchphrase "Not in my back yard."
Take Rochester. Continuing the work of their father, Dr. William Worrall Mayo, Drs. William and Charles Mayo opened their first hospital in Rochester in 1889 near the railroad tracks so patients from across the United States could get there.
Today the Mayo Clinic employs 28,000 people in a city of 85,000 and takes up the entire downtown.
"Mayo is Rochester, plain and simple," said Hanson, the city council president.
Although most of the sprawling clinic is a half-mile from the railroad tracks operated by privately held DM&E, locals have expressed concern about the proposed upgrade. The rumbling from heavy coal trains, they said, could scare patients away.
Instead, they want the Sioux Falls, South Dakota-based company to put a 6-mile (9.7 kilometer) tunnel under the city, a modification that transport analysts said could easily add more than $100 million to the project's cost.
Rochester has fought DM&E's plans in and out of court for eight years, and Hanson said the city would keep doing so unless the tunnel is built.
LESS POPULAR THAN LANDFILLS?
It's not just DM&E. Other railroads, trucking companies and even oil refineries face similar problems.
For instance, the California Department of Transport decided in April to scrap a project to expand existing lines in Fresno with the Burlington Northern Santa Fe Corp. railroad, citing the community's concerns that the upgrade would affect a residential area.
The Fresno City Council had opposed the project because it feared residents would be exposed to noise and pollution.
U.S. railroads have come under fire from utilities for not delivering enough coal to power plants, but efforts by Norfolk Southern Corp. to put in new track are frequently unpopular with nearby residents.
"Even when we have the land rights to new track it can take years to overcome local opposition," said Donald Seale, chief marketing officer of the Norfolk, Virginia-based railroad.
Trucking companies also face this problem.
"On the popularity scale, any trucking terminal is right behind a crack house or a landfill," said Bill Zollars, chief executive of YRC Worldwide Inc. , the largest U.S. less-than-truckload operator.
Less-than-truckload operators consolidate small loads into a single truck and require multiple facilities across the country.
"Part of our challenge is to improve our image," Zollars said. Overland Park, Kansas-based YRC has an outreach program through which it tries to cooperate with local communities on the best solution for a new facility.
Since the approval process for a new truck terminal can take years, fellow less-than-truckload operator Con-way Inc. factors in additional capacity beforehand to avoid opposition further down the line, said Rick Trott, vice president for operations.
"If we need to expand, we can do so without restarting the whole process," he said.
The resistance to new infrastructure, however, is good for some shippers, such as Aries Maritime Transport Ltd. and Teekay Shipping Corp.
These companies, which transport refined oil products, have benefited as opposition to new oil refineries in the United States has driven up demand for imports from places like Russia and Europe.
"If the refined product has to come from further away," said Aries CEO Mons Bolin, "this means more business for our product tankers."
By Nick Carey
ROCHESTER, Minn., July 14 (Reuters) - Rochester doesn't mind railroads -- unless there's a possibility that they could disturb the southern Minnesota city's most important resident, the Mayo Clinic.
Both the city government and the world-famous medical center are fighting a $6 billion network expansion by Dakota, Minnesota & Eastern Railroad to bring coal to the Midwest from Wyoming's Powder River Basin. The project would include upgrading DM&E's line through Rochester to accommodate heavy coal trains.
"The clinic is the biggest private employer in Minnesota, and we can't have that put at risk," said Dennis Hanson, president of Rochester's city council.
The conflict is emblematic of tensions between U.S. communities and transport companies.
"People want easy access to goods and services; they want electricity," said Fitch Ratings analyst Stephen Brown. "But they don't want the risk of noise or pollution that may accompany that access."
Profits at transport companies have soared in recent years along with demand for their services. They are benefiting from two trends -- double-digit increases in U.S. imports as the nation outsources its manufacturing base to developing countries like China and soaring demand for coal as a cheap alternative to increasingly expensive natural gas.
Both trends have led to a need for more trains and trucks to haul goods.
But rail and trucking networks are strained as demand outstrips capacity, requiring additional infrastructure. This brings the companies up against people who live near the proposed new sites -- spawning the catchphrase "Not in my back yard."
Take Rochester. Continuing the work of their father, Dr. William Worrall Mayo, Drs. William and Charles Mayo opened their first hospital in Rochester in 1889 near the railroad tracks so patients from across the United States could get there.
Today the Mayo Clinic employs 28,000 people in a city of 85,000 and takes up the entire downtown.
"Mayo is Rochester, plain and simple," said Hanson, the city council president.
Although most of the sprawling clinic is a half-mile from the railroad tracks operated by privately held DM&E, locals have expressed concern about the proposed upgrade. The rumbling from heavy coal trains, they said, could scare patients away.
Instead, they want the Sioux Falls, South Dakota-based company to put a 6-mile (9.7 kilometer) tunnel under the city, a modification that transport analysts said could easily add more than $100 million to the project's cost.
Rochester has fought DM&E's plans in and out of court for eight years, and Hanson said the city would keep doing so unless the tunnel is built.
LESS POPULAR THAN LANDFILLS?
It's not just DM&E. Other railroads, trucking companies and even oil refineries face similar problems.
For instance, the California Department of Transport decided in April to scrap a project to expand existing lines in Fresno with the Burlington Northern Santa Fe Corp. railroad, citing the community's concerns that the upgrade would affect a residential area.
The Fresno City Council had opposed the project because it feared residents would be exposed to noise and pollution.
U.S. railroads have come under fire from utilities for not delivering enough coal to power plants, but efforts by Norfolk Southern Corp. to put in new track are frequently unpopular with nearby residents.
"Even when we have the land rights to new track it can take years to overcome local opposition," said Donald Seale, chief marketing officer of the Norfolk, Virginia-based railroad.
Trucking companies also face this problem.
"On the popularity scale, any trucking terminal is right behind a crack house or a landfill," said Bill Zollars, chief executive of YRC Worldwide Inc. , the largest U.S. less-than-truckload operator.
Less-than-truckload operators consolidate small loads into a single truck and require multiple facilities across the country.
"Part of our challenge is to improve our image," Zollars said. Overland Park, Kansas-based YRC has an outreach program through which it tries to cooperate with local communities on the best solution for a new facility.
Since the approval process for a new truck terminal can take years, fellow less-than-truckload operator Con-way Inc. factors in additional capacity beforehand to avoid opposition further down the line, said Rick Trott, vice president for operations.
"If we need to expand, we can do so without restarting the whole process," he said.
The resistance to new infrastructure, however, is good for some shippers, such as Aries Maritime Transport Ltd. and Teekay Shipping Corp.
These companies, which transport refined oil products, have benefited as opposition to new oil refineries in the United States has driven up demand for imports from places like Russia and Europe.
"If the refined product has to come from further away," said Aries CEO Mons Bolin, "this means more business for our product tankers."