All those who applauded Berkshire Hathaway’s recent decision to remove its derelict oil tank cars from a junkyard along the Boreas River should also applaud NYS Comptroller Tom DiNapoli, whose unheralded Dec. 12 letter to CEO Warren Buffett helped to persuade the company to act.
It turns out that New York has a large stake in Berkshire Hathaway. New York’s Common Retirement Fund (CRF) owns 5.7 million shares of Berkshire Hathaway stock. DiNapoli administers the CRF.
Comptroller DiNapoli’s letter certainly helped to focus Berkshire Hathaway’s attention on this issue. He made it clear to the company that parking oil tank cars on the Adirondack Forest Preserve was getting a lot of negative attention. That’s the kind of attention that can harm a stock price. As a holder of that stock it made sense for New York to point that out. Comptroller DiNapoli is also the former chairman of the state Assembly’s Environmental Conservation Committee. His continuing concern for the Adirondacks is also evident in his letter.
DiNapoli wrote to Buffett on Dec. 12, noting that it made good business sense to remove the cars:
“I am particularly troubled by the reaction from local elected officials, community stakeholders, and environmental and conservational groups who have stated the stored tankers threaten the scenic beauty, ecological integrity, and protected natural quality. I am concerned, as I am hopeful you will be, that the ongoing issue has the potential to negatively impact the reputation of Berkshire Hathaway.
“Based upon the CRF’s experience as a long term investor, we believe that the ability to mitigate reputational risk and establish and maintain constructive relationships with communities in which companies operate is a hallmark of a company with a sound, sustainable and profitable long term strategy. For example, I was encouraged to read that Union Tank Car Company removed tanker cars from a Chicago neighborhood following safety concerns voiced by the business leaders, community stakeholders, and the City of Chicago.”
Ironically, the tank cars Berkshire Hathaway decided to remove from the City of Chicago were dumped there by the same rail road company – Iowa Pacific Holdings LLC – that created the rail car junkyard in the Adirondacks. The oil tank car dumping area is on tracks the company controls alongside the scenic Boreas River, between North Creek and a defunct iron mine in the ghost hamlet of Tahawus, in the Town of Newcomb.
New York has invested tens of millions of dollars in purchasing new wilderness lands in this area over the past 20 years, in an effort to attract ecologically friendly tourism and preserve its unspoiled beauty.
Last month, New York Governor Andrew Cuomo instructed two of his agencies to issue a cease-and-desist letter to Iowa Pacific. He also said they would file a formal complaint with the federal Surface Transportation Board seeking to have the junkyard removed. The state will also ask the board to evict Iowa Pacific from the rail corridor for failure to operate a rail road instead of a junkyard. The Adirondack Council’s attorneys have been working behind the scenes with attorneys for the Governor’s office and the Attorney General’s office. We continue to applaud Governor Cuomo, the DEC, APA, local elected officials, more than 1,000 Adirondack Council citizen advocates who wrote Warren Buffett, and other environmental groups who have spoken up on this issue.
Adirondacks are National Treasure
New York’s Adirondack Park is one of the world’s largest and oldest parks. It protects most of the wilderness and old-growth forest remaining in the Northeast. Its Forest Preserve has been protected as “forever wild” by the state Constitution since 1894. Although it is owned and administered by New York State, the entire 2.7-million- acre Adirondack Forest Preserve is further protected as a National Landmark.
The controversial junkyard is being assembled on a railroad that leads from the ski resort hamlet of North Creek to an early-19th Century iron mine 22 miles into the forest. The railroad terminates between the Hudson and Opalescent rivers at the old Tahawus mine, on the edge of the park’s famous High Peaks Wilderness Area.
Several miles of the railroad cross the Forest Preserve. They also cross the Upper Hudson River, and run along the Boreas River, both of which are protected as “Scenic” under the NYS Wild, Scenic and Recreational Rivers Program.
In general, railroads are governed by federal transportation law. However, the federal Surface Transportation Board has allowed states to enforce environmental regulations that are stricter than federal law as long as the action doesn’t prevent the lawful operation of a railroad or interfere with interstate commerce, Janeway explained.
The Adirondack Council is working with attorneys in Albany and Washington, D.C. to secure legal remedies to the junkyard, which the organization says is illegal under state and federal law. It is also working with state officials to urge IPH to remove the junkyard. Its members began writing letters to Warren Buffett this week.
The Council and local residents had supported IPH’s previous plans to run a scenic passenger railroad and to haul mine tailings from the former mine site. But the company has failed in those businesses. It is instead renting space on the line to companies that pay to park derelict tankers until they can be refitted, repurposed or scrapped.
Photo of stored tanker cars, courtesy Protect the Adirondacks.