Rural rail district studies north-south line - Odessa American: Premium

Rural rail district studies north-south line

BY COREY PAUL | Posted: Sunday, April 19, 2015 5:30 am

Rail transportation officials are trying to develop a north-south corridor to the Odessa and Midland area as traffic along Union Pacific’s Trans-Pecos line through the area remains at near-full capacity.

The long-delayed La Entrada Al Pacifico began in the 1990s with the intention of connecting the Permian Basin to Mexico by rail and highway to spur trade. Now, oilman Buddy Sipes of the La Entrada Al Pacifico Rural Rail Transportation District hopes to push the rail corridor and secure a place for it in a state-wide master plan for transportation priorities.

“Right now, Union Pacific is our only rail,” said Sipes, the chairman of the rail district. “And it’s one of those things: If you don’t have competitive rail rates, you are at a disadvantage for any manufacturing centers or distribution centers.”

Both of those sectors represent areas desired by the Odessa Chamber of Commerce and the Odessa Development Corporation as a means of diversifying the local economy. The rural rail district is working with a private Austin-based consultant, Harold Collins, to study three potential rail corridors extending from the Odessa and Midland area.

A potential first leg would connect the Odessa and Midland area to the nearly 400-mile South Orient Railroad stretching from the border in Presidio to the San Angelo Junction. The three new corridors being considered each stretch about 55 miles to the southern Crane or Upton county areas.

Collins described the South Orient, owned by the state and leased to a private operator, as a “reliever railroad” for UP’s line, which is a “national cross-country corridor.”

Key questions that remain include who would pay for the expansion and the role of local governmental agencies. At this point, Sipes said the group is targeting a public-private partnership but does not have backers.

The ODC was briefed on the project last week. Another briefing is scheduled for the Midland Development Corporation on Friday.

One corridor under study travels along Highway 385 south from Odessa. Another runs roughly along Highway 329 near Rankin and jets west along Highway 1492 and then north along Highway 1788 until it would connect to the Union Pacific line near the former Flint Hills Plant in Odessa.

A third would extend north along Highway 1601 toward Penwell, where Summit Power’s long-delayed Texas Clean Energy Project is planned. The idea proposed by the rail district would benefit the planned 400-megawatt clean-coal plant on a 600-acre site about 15 miles outside of Odessa, said ODC Board member Betsy Triplett-Hurt during the April 9 meeting.

“If Summit happens, that would accelerate because of Summit,” Triplett-Hurt said after the meeting. “It’s still viable if Summit doesn’t happen with all the frack and oil.”

Collins and Sipes said they expect the completed study sometime in May and plan to have a public hearing in June to collect input from residents and businesspeople about the preferred route for a new rail line.

Then they want to make sure the new rail line is listed in the Texas Department of Public Safety’s Statewide Transportation Improvement Program being drafted.

Rail district officials say the railways have been strained during the oil boom but did not find relief with the drop in oil prices.

Late last year, Union Pacific notified local customers via letter that the railroad expected to hit full capacity for the area this spring that would also mean charging “manifest,” or more expensive, rates even for cargo shipped on large and efficient intermodal trains, according to the rail district. 

Collins cited a combined statistical area projected by TxDOT in 2004 for the Odessa and Midland area of about 300,000 people. But the area has already surpassed that by about 15,000 residents, according to a March report by the U.S. Census Bureau.

And economist Ray Perryman of the Perryman Group recently projected growth through 2018 to about 400,000 people in the two-city area.

“What that really tells you is that the community is just going to continue to grow and we’ve reached that next milestone where you have to have another option for shippers,” Collins said. “The more people you have, the more businesses you have, the more activity you have, the more you need extra capacity.”