The Surface Transportation Board is moving to settle several long-running cases in the next several weeks with decisions that could affect the rail freight industry for years.
Ranging from the outskirts of Chicago to the Oregon coast and the Nevada desert, the cases may redraw the North American rail map. Taken together, they add up to the largest restructuring of rail track ownership since the era of Class I consolidation.
And they are expected before the Jan. 20 inauguration of President-elect Obama and any change in the STB's leadership.
The action began this fall when the three-person board approved a yearlong bid by Canadian Pacific Railway to absorb the big U.S. regional line Dakota, Minnesota & Eastern. Still ahead and expected soon is the agency's final environmental impact assessment of Canadian National Railway's plan to buy a Chicago-area short line - Elgin, Joliet & Eastern Railway - and remake a big part of the rail network in and around that critical hub city.
CN says it needs to know by year's end if it can proceed in order to comply with contract terms. It failed to get an appeals court to order the STB to decide by then. However, the company thinks the STB may still act in time.
"I think there's little, if any, doubt that we're going to get a positive decision in early December," E. Hunter Harrison, CN's president and CEO, told Canada's Financial Post.
These two merger cases are some of the biggest to face the board this decade, but they also are just two of the items the STB is checking off its to-do list in the last days of the Bush administration.
On Nov. 19, the board set a final price for the Port of Coos Bay, Ore., to buy a closed rail line segment a RailAmerica unit was abandoning. The Central Oregon & Pacific Railroad first told the board the liquidation value of its Coos Bay line was nearly $27 million, but the port argued the figure was drawn up before soaring steel prices came back to earth. The STB set the new line sale price at $16.6 million based on Oct. 31 steel costs, and told the port to decide quickly if it wants the trackage.
The board also unveiled a competition study Nov. 3 it had commissioned more than a year ago, a study whose cautious wording left both railroads and customers claiming victory over what it said about rail pricing for captive shippers.
And as winter blasts chilled the Northeast, board members managed to slot a Las Vegas visit Dec. 4 for a public hearing on federal plans to build a special-use railroad in Nevada to serve the proposed Yucca Mountain nuclear waste storage site.
All this, and more, is taking place in a remarkably short period of time, for an agency often criticized by shippers as taking far too long to act.
STB Chairman Charles D. Nottingham says it's all a matter of circumstance. "Since mid-2006, the board has pursued an ambitious agenda of bipartisan reform aimed at making the board's dispute resolution processes easier to access and less costly," Nottingham said. "These reforms have successfully resulted in many board stakeholders bringing their concerns to the board in recent months."
The board has several reasons to clear its decks soon, including pressure from a Congress that is threatening new legislation to force the STB to regulate railroads more stringently.
But another reason is this board, which usually finds a way to decide issues unanimously, could be on the verge of breaking up. Commissioner W. Douglas Buttrey's term ends Dec. 31, although he can stay in place up to a year or until a replacement steps in.
Earlier this year, President Bush nominated Husein Cumber, deputy chief of staff at the Department of Transportation, for an STB seat. But the Senate this year has blocked most new Bush appointments that require confirmation. Unless Bush gets an agreement bringing Cumber on board, or the opportunity to make a recess appointment, the choice could go to incoming President Obama.
Another big issue is who chairs the board next year, and the president gets to make that choice.
Nottingham like Buttrey is a Republican, and Obama could name a Democrat to the post. That could be Vice Chairman Francis P. Mulvey, a former House Democratic aide.
If Obama names Mulvey or another Democrat to chair the board, Nottingham could still serve out his current term, which ends Dec. 31, 2010.
The chairman has not said what he plans to do, but it is clear that the STB could change quite a bit in coming months, losing members who have built expertise and ways to agree on many issues.