The Biofuels Boom and its Impacton Highway and Rail Safety

David A. Christianson, AssociateSRF Consulting Group, Inc.

2007 Eastern Region Rail Crossing Safety ConferenceAlbany, NY

October 3, 2007

A Case Study in Minnesota:Freight Transportation in District 7

•Mn/DOT District 7; 13 SouthwesternCounties

•Minnesota’s Corn Belt –Representative ofthe Central Midwest

•Steady and Significant Growth•Responsive Management & Productivity•Technology: Genetics, Communications•Central to Established Economy &

Renewable Energy Initiatives

Context of Study

D-7 Key Commodities –In Order ofImportance (2005)

•Corn Production 358M Bushels (1/3 ofMn.)

•Soybeans 72M Bushels (1/3 of Mn.)•Hogs –5 million head (1/2 of Mn.)•Ethanol –186 million Gallons (1/2 of Mn.)

(Minnesota third largest producing state)•Non-Metallic Minerals –Silica, Kaolin

Clay, Aggregate•Manufactured Goods

Major Trends Impacting Freight

•Ethanol Expansion & Economics•International Markets –Corn, Soy, DDGS•Ongoing Growth in Agricultural

Production; Responsiveness to Demand•Grain Shuttle Trains & Elevators•Inland Waterways Price & Capacity•Oil & Natural Gas Supplies and Prices•Cellulosic Ethanol•Intermodalism

Growth in Freight Traffic

Westregion+65%

Southregion+71%

Centralregion+71%

Northeastregion+58%

U.S. domestic freight tonnage growthforecast, 2000-2020U.S. domestic freight tonnage growthforecast, 2000-2020

Truck Rail Water Air Total

20202020

20002000

% change2000-2020% change2000-2020 62%62% 44%44% 39%39% 181%181% 57%57%

10,70010,700

17,29617,296

2,0092,009

2,8912,891

1,0541,054

1,4701,470

13,77213,772

21,68221,682

992525

Source: USDOT

Intermodal Containers-Access Issues

Corn Yield Bushel per Acre

60

80

100

120

140

160

180

200

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Co

rn(B

u)

Sibley

CottonwoodJackson

Nobles

RockBlue Earth

Brown

Faribault

Le SueurMartin

Nicollet

WasecaWatonwan

Soybean Yield Per Acre

25

30

35

40

45

50

55

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

So

ybea

nB

u/a

Sibley

Cottonwood

Jackson

Nobles

Rock

Blue Earth

Brown

Faribault

Le Sueur

Martin

Nicollet

Waseca

Watonwan

Hogs

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Ho

gs

(#)

Sibley

Cottonwood

Jackson

Nobles

Rock

Blue Earth

Brown

Faribault

Le Sueur

Martin

Nicollet

Waseca

Watonwan

Agricultural Equipment-Size & Weight

Vehicle and Shipment Sizes

•Grain Shuttle Trains•Ethanol Unit Trains•Railcar Size & Weight; 263K>286K>315K•Truck Size & Weight; 80K>89K, axle loads•Farm Equipment: Mega-combines, 5-axle

Semis common (65% of farm delivery)•Infrastructure Limits: Bridges, Local roads,

Rail branches & sidings•Barge Tows: Upper Mississippi Structures

Bio-Fuels Growth

National Distribution of Plants

Corn Ethanol Plants

Ethanol Plant ExpansionVs. Corn Consumption

33%3802007

25%2522006

19%1862005

(Million Gals./Year)

% OF D-7CROP YIELD

PLANTCAPACITY

YEAR

Ethanol Plant Characteristics

•Produces 40 million gallons/year of ethanol•Produces 125 thousand tons/year of DDGS•Consumes 15 million bushels of corn•Collects grain from 30 mile radius•50-70 heavy commercial trucks per day•4-7 loaded railcars per day•10 days storage for corn on average•Next generation plant –100 million

gallons/year

Ethanol Freight Flows

Agricultural Logistics-Then & Now

Concentration of Freight Traffic

5-105-1025-50125100MG/Year

2-42-410-205040MG/Year

HoppersOut/Day

TankcarsOut/Day

TrucksOut/Day

TrucksIn/Day

PlantSize

Economic & Market Effects

$1.78/Bu., 2000)(Market Low of7.013.9620076.252.3820065.532.2720056.952.5320045.342.4220034.442.2920025.232.4420014.832.222000

SOYBEANSCORNYEAR(Planting Price)

Agricultural Response To EthanolGrowth; Transportation Impacts

•Corn-on-Corn Crop Rotation: up to 55%growth in production over next 5 years

•Genetics & Management: 15-35% growthin yield over next 5 years

•Projected Heavy Commercial Truck Tripsgrow 155-230% by 2030

•Farm-to-Market grain delivery grows from80 to 160 Semis per square mile annually

•Cellulosic Ethanol Feedstocks couldincrease tonnage 2-5X ( >five years)

Agricultural Growth & Trucking

Safety Issues

•TRAFFIC-Potential doubling of heavytrucks, 30-60% growth in rail carloadings

•GRADE CROSSINGS-Increase in 5-axle80,000 lbs. trucks, non-professional drivers(farmers), increase in train volumes,rural/unimproved crossings

•HAZARDOUS MATERIAL-Ethanol asClass 3 Flammable Liquid

Grade Crossing Safety

Ethanol Characteristics•HazMat USDOT Class 3 Flammable Liquid (UN

1170)•Stable at normal temperatures and pressures•Relatively inert-chemically benign•Low toxicity-requires significant internal ingestion•Non-carcinogenic•Bio-degrades in sunlight, hydrolyzes in water•Non-pollutant in water, except for denaturing

component•Burns at low temperature

Case Study-Fallston, PA; BeaverValley Derailment

Minimizing Risk in Transport

•Professional, certified tank truck drivers•Operation Lifesaver and FMCSA programs•Rail transport for volumes, distance (safety

record excellent)•Rail & Roadbed condition & inspection•Infrastructure investment-Roads, Rail,

Bridges, Crossings•Enforcement

Opportunities - & Challenges

•Preserve Rail Capacity(Minnesota Prairie Line)

•Efficient Trucking(Farm-own, 5-axle Semis)

•Safety & Security(Rail Transport - Ethanol)

•Intermodal Growth•Accident Reduction•Energy Efficiency

•Private Infrastructure(Public road, Waterways)

•Local Road Condition(1950’s design, 3-season)

•Dispersed Network(Low Funding, Awareness)

•Local Access Points•Grade Crossing Safety•Maintain Mix of Modes

National & Local Significance

•Boom in Energy & Agriculture –GrowingNational Significance (ethanol, wind, solar)

•Integrated Freight Network Needed at BothLocal & National Level-capacity & safety

•Rural Infrastructure & Resources FallingBehind Accelerating Transportation Needs

•Safety, Energy Conservation, Environmentall served by Freight Network Investmentand Policy Support

Questions