City seeks new rail options

For as long as anyone can remember, the Union Pacific railroad tracks have cut through Odessa, creating a physical barrier that also is often cultural. While the tracks and the trains that run on them aren’t going anywhere, the way they operate and what the city gets from the railroad could be changing.

Area industry is restricted because of the limited access it has to Union Pacific’s rail lines, said Gary Vest, economic development director for the Odessa Chamber of Commerce. He said Odessa has few turnouts at which companies can access trains, while Midland has none.

“We have a real demand for rail availability here in Odessa,” Vest said. “You can’t get a turnout for cars on the mainline, there’s restricted access.”

But things could be changing. Since the closure of Flint Hills Resources petrochemical plant last year, the city’s economic development department has sought out access to rails on the east side of the plant, where a spur connects in with Union Pacific’s main line. Vest said talks continue with Flint Hills on the subject.

“We’re trying to get improved service here because we need it for our industrial customers,” he said.

Vest said Union Pacific even indicated interest in building a rail spur of its own, something that would have been unheard of in years past.

Union Pacific has reduced service through Odessa from 22 to 16 trains a day, Vest said. He said a reduction in rail demand has caused the Omaha, Neb., company to reach out to customers, something unheard of in the past.

Union Pacific executives recently visited Odessa for a meeting with city officials in one of its dining cars, Vest said.

“They made it quite clear they want to be more customer friendly,” he said. “They want more business. They didn’t used to do that.”

Union Pacific spokeswoman Raquel Espinoza said that CEO Jim Young has made customer service a priority since taking charge in 2005.

“We realize it’s a big key in this day and age that we fulfill our customers’ needs,” she said. “Our employees have taken that seriously.”

Young has stressed that trains can ship products from laptop computers to coal, Espinoza said.

“He’s making it very clear that a lot of people are counting on us to ship their goods,” she said. “He wants to hear the good and the bad. If there’s anything we need to work on, he wants to hear, because we want to fix it.”

She said the company promotes that trains can carry goods more economically than semitrucks, hauling a ton of inventory 830 miles on a single gallon of diesel.

“We’re reaching out to organizations that have never thought about using rail as a way to ship their goods,” she said.

Rail options other than the east-west Union Pacific tracks are also being considered, particularly with Summit Power Group Inc.’s planned $2 billion coal gasification power plant planned for Penwell. The La Entrada Al Pacifico Rural Rail District recently commissioned Cambridge Systematics, a Massachusetts company that specializes in transportation research, to conduct a study on the feasibility of a rail line being built to connect with Burlington Northern Santa Fe’s lines in Seagraves, 80 miles north of Odessa.

A study conducted in 2007 determined there was less than half the necessary rail traffic to justify a north-south line to connect Seagraves and Odessa (and ultimately McCamey to the south). But officials hope that with Summit bringing a 110-car unit train full of Powder River Basin coal from Wyoming every other day, as well as shipping out urea byproduct for use in fertilizer, that could change some minds.

“When they looked at it before, there just wasn’t enough use to make it feasible to build that $100 million rail line,” Vest said.

Laura Miller, Summit’s Texas projects manager, said her company approached Burlington Northern about a rail extension more than two years ago, early in the planning for the 400-megawatt plant, which is designed to capture more than 90 percent of the carbon dioxide it produces.

“They said ‘no,’ ” Miller said. “There just wasn’t the business demand, even with our plant.”

In an e-mail this week, Burlington Northern spokesman Joseph A. Faust said the company is not considering building a new rail line and is conducting no studies on the matter. He said Burlington Northern has no comment “regarding any other parties’ plans.”

Still, Miller said Summit would welcome more rail service to the area, where Union Pacific is currently the only game in town. She said the Bainbridge Island, Wash., company supports the Odessa Chamber of Commerce’s efforts to add more rail service to the Permian Basin.

“Obviously, if two railroads provide service to the area, you’ve got more to choose from and it could be more competitively bid,” she said. “But that’s not to say we wouldn’t get good treatment from Union Pacific.”

Summit’s experiences with Union Pacific have been positive, Miller said. She said Summit officials have visited Omaha several times, and Union Pacific officials even wrote letters to U.S. Secretary of Energy Steven Chu supporting Summit’s project.

The companies are also working together to design needed rail infrastructure at Summit’s 600-acre Penwell site, Miller said.

“You’ve got urea (byproduct for use in fertilizer) coming and going, while the coal is coming and going,” she said. “That’s a lot of loops out there.”