Thursday, October 26, 2017

Governor Cuomo Speaks Out Against Storing Oil Tanker Railcars

stored tanker carsAt an address at the Glens Falls Hospital on October 25th concerning a new cancer study by his administration in Warren County and Upstate New York, Governor Cuomo addressed the recent controversy around storing used out-of-service oil tanker rail cars by Iowa Pacific Holdings on a remote line in the central Adirondack Park. The Governor starkly denounced the plan.

The Governor said: “It is unsightly, it is out of character with the Adirondacks, nobody goes to the Adirondacks to look at old trains, they go there to look at the natural beauty. We don’t own the tracks, there is a question as to what legal right we have to oppose it, but we oppose it 100% and we are going to do everything we can do to stop the owner from storing the trains on those tracks.”

On October 17th, the Saratoga and North Creek Railway, an arm of Iowa Pacific Holdings, of Chicago, Illinois, transported 28 out-of-service oil tanker rail cars through Saratoga and Warren Counties and stored them on a .9-mile section of siding track on the banks of the Boreas River in the Town of Minerva in Essex County. Iowa Pacific leases rail lines in Saratoga and Warren counties, but owns an easement for the Sanford Lake Railway, from North Creek to the Tahawus Mine, in Hamilton and Essex counties. The 28 cars are on a section of track that traverses the Vanderwhacker Mountain Wild Forest area of the Forest Preserve.

Two weeks ago in Warren County, Ed Ellis, the CEO of Iowa Pacific, stated that there was room enough on the Sanford Lake line to store over 2,000 out-of-service rail cars and that he was looking to lease the whole line to eager customers. Ellis has no qualms about a future where a string of 2,000 or more old rail cars lined the Sanford Lake Railway from the Hudson River to the Tahawus Mine. He said the length of time for storage was “indefinite.”

Governor Cuomo’s no-holds-barred statement of opposition to the plans by Iowa Pacific certainly throws cold water on Ellis’s scheme, but the Governor’s comments need to be followed up by real action by Department of Environmental Conservation and Adirondack Park Agency. These agencies need to assert their authority and defend the Adirondack Park and Forest Preserve.

Local government leaders have been mixed on the plans by Iowa Pacific, but those in opposition have so far carried the day. A resolution of opposition was passed by the Essex County Board of Supervisors. This resolution was supported by the Warren County Board of Supervisors.

Steve McNally, Supervisor or the Town of Minerva, led the effort to oppose rail car storage at the Essex County Board of Supervisors. “I am very disappointed with the rail car storage on the Sanford Lake line,” McNally stated. “The people of Minerva are very proud of their community and work diligently to preserve our history as well as to maintain our properties. I am very concerned not only of the environmental factors of having these cars sitting in the middle of the Adirondack Park but also the issue if the trains are on the track the potential of having aggregate from Tahawus shipped to market is mute. These cars also will be stored on a dead end line accessible only thru North Creek and most importantly over an aging train trestle over the Hudson River.  There are many groups and individuals who work tirelessly to keep the Adirondack Park as the jewel that it is, but I cannot see how storing these cars goes along with this vision.”

Iowa Pacific Holdings has shown that it cares little about neighbors or neighborhoods along the rail lines that it owns or leases. The Chicago Tribune reported on complaints that storage of oil tanker rail cars on Goose Island is undermining economic development as ugly tankers sit in front of businesses, apartment buildings, and residences. In response to complaints, Iowa Pacific said it would move the cars for payment of $275,000. This echoes threats made by Ellis to the Warren County Board of Supervisors where he stated that his company would need to be compensated if he cannot store rail cars as he desires.

Despite its name Iowa Pacific is not a big company. It leases or owns a series of small boutique, dead-end lines around the U.S. akin to the Saratoga to North Creek Railway and the Sanford Lake line. It runs tourist trains and dining cars, but it seems that its best moneymaker is storage of out-of-service rail cars on its dead-end tracks.

Railroad law is complex. In 2011, Protect the Adirondacks filed comments with the Surface Transportation Board in opposition to the operation exemption to allow the Saratoga and North Creek Railway to purchase and operate the Sanford Lake Railway. This was at a time when Iowa Pacific signed its first contracts to lease lines in Warren and Saratoga counties. Prior to Iowa Pacific coming on the scene, the APA had approved a permit to remove the tracks from the Hudson River to the Tahawus Mine, but this plan was abandoned as local and state leaders embraced Iowa Pacific with open arms.

The files for PROTECT’s opposition to the operation of the Sanford Lake Line can be read here and here. They contain the applications, decisions, and all the letters of support from virtually every local and state political leader. What’s interesting is that none of these testimonials say anything about storing rail cars on this line. Nor do any of Iowa Pacific’s documents. In this way, it’s a classic bait and switch operation.

While PROTECT was unsuccessful at blocking the exemption for the Sanford Lake railway, which allowed it to be purchased and operated by Iowa Pacific, the subsequent years have seen the complete failure by the company to haul out materials from the Tahawus Mine or to build successful tourist train businesses in Saratoga or North Creek. 2017 riding levels have been the worst on record.

For its part, Iowa Pacific argues that its management of the lines that it leases and the line that it owns in the Adirondack Park are exempt from state or local laws citing long-established rules under the federal Surface Transportation Board (STB) and Federal Railroad Administration (FRA). The first thing to note is that the lease agreements with the Town of Corinth and Warren County do not talk about storing rail cars on those lines. This raises questions about the 22 old railcars that have been stored outside of North Creek on the banks of the Hudson River between the river and Route 28. They’ve been there for more than a year and they have nothing to do with operating a scenic railroad. Warren County should insist that these railcars be removed.

The unique history of the 29.71-mile Sanford Lake line, also called the Tahawus Line, separates it from other rail lines and protections under federal railroad law. The Sanford Lake line was created by an act of eminent domain by the federal government during World War II so that needed minerals could be produced for the war effort. The State of New York, citing Article 14 and the State Constitution, fought the federal government in court and lost. The documents around the condemnation by the federal government and the state’s court cases make it clear that the Sanford Lake line was created for one singular purpose: hauling ilmenite ore from the Tahawus Mine.

This fact is important because while the STB and FRA generally see transporting railcars and storing railcars as legitimate and indistinguishable uses of a railroad, the unique history of the Sanford Lake line raises many important legal questions about whether storage of rail cars is a lawful activity there. Certainly, Iowa Pacific enjoys the rights now to haul materials from the Tahawus Mine, but storing railcars in great numbers is an open question and is something for state agency lawyers to give a hard look.

In other parts of the U.S., local governments have prevailed against railroad companies storing large numbers of railcars in their municipalities by arguing impacts beyond transportation. Storage is different from transporting. In New York, there are questions under the Wild, Scenic and Recreational Rivers Act that could impact the places where the Sanford Lake line is part of a designated Rivers Act corridor in both Forest Preserve areas (DEC authority) and private lands (APA authority). Storage of rail cars raises many questions about compliance with the State Land Master Plan where the track runs through the Forest Preserve and questions about compliance with the APA Act where the track runs through private lands. There are other state laws under the Environmental Conservation Law that may apply as well.

Because there are so many open questions about this reckless project that many see as undermining everything the Adirondack Park is all about, it was good news indeed to get words straight from the Governor Cuomo’s mouth that he opposes this plan. To give meaning to the Governor’s words, the APA and DEC now have to tackle Iowa Pacific’s plans head on.

Photo of stored railcars courtesy Protect the Adirondacks.


Peter Bauer

Peter Bauer is the Executive Director of Protect the Adirondacks.

He has been working in various capacities on Adirondack Park environmental issues since the mid-1980s, including stints as the Executive Director of the Residents' Committee to Protect the Adirondacks and FUND for Lake George as well as on the staff of the Commission on the Adirondacks in the Twenty-First Century and Adirondack Life Magazine. He served as Chair of the Town of Lake George Zoning Board of Appeals and has served on numerous advisory boards for management of the Adirondack Park and Forest Preserve.

He lives in Blue Mountain Lake with his wife and two children and enjoys a wide variety of outdoor recreational activities throughout the Adirondacks.




30 Responses

  1. Tony Goodwin says:

    If nothing else, it should be pointed out the degree with which Ed Ellis, Iowa Pacific, and the local Saratoga North Creek RR (SNCRR) have blatantly lied about this whole affair.

    The 9/20 article in the Glens Falls Post-Star quoted the local SNCRR manager, Justin Gonyo, as saying that there would be “several hundred” cars being stored, but that rail service to the mine would remain open. The Stillwater siding where the current 28 cars are stored has room for another 18 cars. To store several hundred cars would require using every bit of spur track hat existed on the 1976 topo map that includes the Tahawus mine area. If all those tracks, or any of the mainline, are use for storage, then there can be no further shipments of tailings.

    The 9/25 article in the Post-Star quotes the railroad’s attorney David Michaud as again saying, “The rail line will remain open”. See above.

    Finally, the 10/13 article quotes Iowa Pacific chairman, Ed Ellis as saying hat his company must be compensated in “seven figures”. First of all, it does not appear that the 2,000 or so cars that could theoretically be stored on the 29 miles (plus a very few sidings) between North Creek and Tahawus would ever earn a “seven figure” income for the railroad. Secondly, while the cars currently stored on the Stillwater siding are not publicly visible, lining the cars on the tracks all the way to North Creek (in order to get to 2,000 cars) would make them very publicly visible as they sat along Rt. 28 between North Creek and North River.

    It only required someone like myself who can easily find the length of the line and the length of the cars to determine how many cars can be stored and how much of the line will be required to do it. What other greater secrets about this operation lurk underneath the obvious inconsistencies?

    • Paul says:

      I thought the company’s figure was 20,000 cars. I think I saw that there?

      This sounds like a bonanza for lawyers and something that will be tied up in court for decades (if opposed). Sounds like the governor has said we have no ownership and perhaps with that no standing to even oppose the move.

      • Tony Goodwin says:

        Paul;

        Even though John Warren replied that “20,000” was the company’s figure, I had to consider that as a “typo” and not a “lie”. Just do the math and to will be obvious that 20,000 58-foot tank cars cannot be stored even on the entire 80 miles of line all the way to Saratoga.

        80 miles times 5,280 feet = 422,400 feet. Divide that by the 57-foot length of the average tank car, and you get 7,410 cars that could be stored on the whole line – let alone just the line from North creek to Tahawus.

        Does no one ever fact-check these days?

        • Cranberry Bill says:

          4th grade math is too hard.

        • Charlie S says:

          57-foot long tankers. I’ve never seen them this long. That’s quite a long tanker, an anomaly on the railroad tracks for sure. This number is wrong not that it matters just an awareness is all.

          • Charlie S says:

            My uncle, a railroad fanatic, corrected me on length of cars. He says, “Yes, some tank cars are close to 60’ and can hold 38k in oil….Generally, 90 cars moved at one time. The train crew fearful of accident always put a hopper on either end to separate the engines from the tank cars…. ”

            I stand corrected. I have certainly never seen them this long.

  2. Terry V says:

    The Governor said: “It is unsightly, it is out of character with the Adirondacks, nobody goes to the Adirondacks to look at old trains, they go there to look at the natural beauty.
    That’s right you train guys

    • Dan Bogdan says:

      And there is no better way to view the natural beauty of the Adirondacks than from the comfort of a railway coach with many amenities available. Plus one can meet interesting people and make new friends. The beauty of railway travel right in the Adirondacks!

      • John Jongen says:

        Dan, go visit the Blue Mountain ADK Museum where they have restored an excellent Pullman coach from where you and friends can quietly view the ADK Park at your leisure.

        • Dan Bogdan says:

          John, been there, done that. The wine selection is way much better on the ASR than the Experience museum and the scenery keeps changing. Also I have available two Pullman cars I can use on the ASR. And the railroad is oil tanker free. By the way once we stop using massive amounts of oil we won’t need oil tankers and will be better off for it. I find it pathetically humorous when people criticize the presence of these tankers based on aesthetics yet will motor around in the Park with their gas guzzling SUV’s, 4X4’s and snowmobiles and are partially responsible for the existence of these tankers. Stop using so much oil and the tankers will disappear.

  3. Debra says:

    Someone is getting paid well. Obviously these people who are allowing it do not care and are greedy, Maybe they should look more closely into all the money making.

  4. JOHN says:

    RAILROAD CARS HAVE BEEN STORED THERE SAFELY SINCE THE END OF WORLD WAR 2.. NATIONAL LEAD MINING COMPANY HAD A GOOD SAFETY RECORD..

    • Boreas says:

      John,
      Were they on their own property? Were they their own cars? Rail storage wasn’t a major part of NL’s business plan. Seeing railcars at a working mine isn’t unusual. Simply storing them in the Forest Preserve is. Keep in mind, this is a different company, not National Lead, and not only on NL property.

      There is also an open pit mine there now that doesn’t exactly fit in well with its wilderness surroundings. Now we are going to add more industrial clutter? Why not a landfill?

  5. Charlotte says:

    As to the intention of the Iowa Pacific and whether it duped local and state officials with its supposed plan to use the track to transport materials from the Tahawus mine, just look at the company’s own words:
    The Iowa Pacific homepage lists “Railcar Storage” first in a list of services it provides:
    https://www.iowapacific.com
    So does its web page about its services:
    https://www.iowapacific.com/services/
    And its current newsletter features railcar storage on the cover:
    https://www.iowapacific.com/about-iowa-pacific-holdings/newsletter/

    The cover story says Iowa Pacific’s ”excess track capacity translates to customer gain” and that the company is currently storing 7,000 cars “with capacity for 5,000 more.”
    The newsletter also notes that new federal regulations have “rendered certain types of trail cars obsolete.” The Federal DoT in 2015 issued new, tougher regulations regarding the safety of oil tankers. Thousands of older oil tankers that don’t meet the standards are being taken out of service and stored. Guess where?

    This, of course, raises the specter of junkyards of aging tankers that will never be removed from storage but deteriorate in place.
    And what kind of cars are being stored along the Boreas? Tankers.
    And have the tankers really been cleaned of oil residue? The state DoT supposedly inspected them, one news story said. Did the state inspect all of the cars? And how thorough was the inspection? What does it mean for an oil tanker to be “clean”? What happens when the tankers rust and deteriorate, as they surely will?

    The Iowa Pacific is creating a junkyard of potentially toxic impact in one of the most pristine areas in country. “Unsightly,” as Gov. Cuomo says? Absolutely, but even worse, a potential environmental catastrophe. The state needs to fight harder and fight now. For all the history and reasons Peter cites, the state should be in court right now seeking a temporary injunction to remove the tankers and to prevent more railcars of any kind from being moved in until all the issues can be resolved in court.

  6. Jim shepard says:

    So now after some of these cars are already here Cuomo finally on the 25th decides to say something? You have 50 staff lawyers you couldn’t find a loophole to stop it ? Before they got here ? You know this co. Is testing us,,probably plan to dump them all here and go bankrupt and then it’s NY taxpayers problem. Have a nice time in Puerto Rico ,drinks on us.

  7. Hamilton White says:

    While I agree that railroad laws are complex, and that federal and state issues are involved, I would also suggest the state should require some form of surety protection until these issues are resolved – and covering the entirely (period of time) they remain in place.
    What is surety? Open commercial letters of credit (LC) or performance bonding to ensure safe removal of the tankers, and coverage for an related remediation expenses, extended until the end-date of their ‘storage’ period, which I understand is indefinitely. Therefore these LCs/bonds should also be open-ended.
    No one can say what will happen in the future, or whether IPH will exist, but if they continue to park more tank cars, the level of surety should be increased.

    • Boreas says:

      Hamilton,

      I agree this SHOULD be an option, but I don’t know if it is in this instance. If this were state property/land, then they probably could. But I believe in this case IP actually owns the land corridor because of the federal condemnation proceedings around WWII that took the land. Apparently, that gave the feds the right to sell it as well. I don’t know, but I would assume NYS had the option of buying it, then they would have had more control over the corridor. But they didn’t. Snooze = Lose

  8. Charlie S says:

    “the Governor’s comments need to be followed up by real action by Department of Environmental Conservation and Adirondack Park Agency. These agencies need to assert their authority and defend the Adirondack Park and Forest Preserve.”

    There have been issues over the years that would make DEC suspect when it comes to asserting their authority defending the Forest Preserve. Of course as I age my mind slips and I forget specifics but there most certainly was some degree of favoritism leaning towards the gas people during the fracking debate.

    I am just about done reading Paul Jamieson’s biography ‘Uneven Ground’ 1992.
    Even he was skeptical of the DEC when he says in a letter July 1,1988: “Many of us have concluded that the DEC is inclined to favor private over public interests in the park……”

    Which is not to say the DEC does not do good, just that they are apt to slip into that old business as usual practice when it comes to favoritism towards big money. Have things changed much since Paul wrote this?

  9. Andrew Dawson says:

    Is Cuomo also against parking lots? Is Cuomo also against gas stations? :$

  10. Roger Skinner says:

    A large amount of rail car were on a rail parallel to Rt 12 near Lowville the last time I went to Watertown. Storage?

  11. Curt Austin says:

    I’m always eager to point out that Iowa-Pacific bought the rights to run a railroad in this corridor, but owns none of the underlying land. The rights are implemented as easements on private land, but New York was successful in negotiating instead a lease of the state land the corridor crosses. It was initially a short lease tied to the end of WWII, but was extended twice, now expiring in 2062.

    The Stillwater Siding is state land. Essentially, Iowa-Pacific is merely a tenant and New York is the landlord. The documents creating this lease might have interesting terms and conditions. Presumably, DEC attorneys have them, and any court findings that may affect them, and are pondering how other state and federal laws complicate the situation further.

    I suspect some “direct action” by Gov. Cuomo will be necessary to be rid of them.

  12. Bill Keller says:

    As a Warren county resident the whole train track scam makes me sick. Millions of taxpayer’s dollars went to upgrade these tracks, which were not being used for anything and in major disrepair. Built RR stations in Thurman and Hadley that sit idle today. They cost around $1.4M each. No one wants to ride a train that would take hours to get from Saratoga to North Creek when you can drive it in less time and for way less money. Can you name one “tourists ” train that is making money and can stand alone without tax payers help?

    • James Falcsik says:

      Strasburg Railroad, Strasburg, PA. 300,000 tourists annually. Additionally, their shop does contract work for other tourist operations all over the country.

      • David P Lubic says:

        Durango & Silverton, Durango Colorado to Silverton, steam powered.

        Grand Canyon Scenic, Williams, Az. to Grand Canyon Village (south rim of Grand Canyon), mostly diesel operation, occasional steam operation.

        White Pass & Yukon, Skagway, Al. to Carcross, Yukon Territory–mostly diesel operation, occasional steam, track out of service from Carcross to Whitehorse, but intact.

        Tennessee Valley Railroad, Chattanooga, Tn.–steam operation, plus contract work.

        These are all firms that actually make money on what they do. There are others that may or may not make money, but do operate without government subsidy.

        Oh, and the Strasburg Rail Road (correct spelling!), mentioned above by Mr. Falcsik, is also an active freight hauler, using its steam engines fairly regularly when they are available for that work, too.

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