Rail shutdown would cost $30 billion, study finds

A shutdown of the nation’s railways at the end of the year if Congress does not move a deadline for automating most of the nation’s trains would cost the U.S. economy $30 billion, according to a study conducted by the American Chemistry Council. 

Railroads currently have threatened to shut down service in January 2016 to avoid fines if Congress does not move a Dec. 31 deadline to install an automated navigation system known as Positive Train Control, which regulates the speed and track movements of trains. 

The Chemistry Council, which relies heavily on freight service, found in its study that a rail shutdown would cost $30 billion and result in the loss of 700,000 jobs. 

{mosads}“The United States is staring down the tracks of an unprecedented shutdown of freight rail service that could seriously harm our entire economy unless Congress acts quickly to extend the PTC deadline,” the group’s president, Cal Dooley, said in a statement. 

“A prolonged shutdown would be truly catastrophic, likely resulting in a recession,” he continued. “We cannot afford to let this self-inflicted crisis happen; Congress must act now.”

The automated train mandate that was set in the aftermath of a 2008 commuter rail crash in California, but railroads say they need more time to complete the implementation. 

Rail companies have argued that they will have no choice but to shut down service at the beginning of next year to avoid fines if Congress does not move the deadline. 

A bipartisan measure has been introduced in the House that would push back the deadline for most railroads to install the automated train technology until December 2018. The Senate also included an extension in a highway funding bill that it passed in July, over the objection of rail safety advocates. 

Critics have complained the measure is a “blanket extension” that lets railroads off the hook for improving safety for passengers. 

“It has been more than 45 years since the National Transportation Safety Board first urged railroads to implement positive train control — an unacceptable delay in implementation of this critical, life-saving technology that has allowed numerous, preventable tragedies,” Sen. Richard Blumenthal (D-Conn.) said in a statement after the House measure was introduced. 

“Extensions should be granted only to railroads that have demonstrated diligent, good faith efforts to meet the mandate,” he continued. “Only by holding railroads’ feet to the fire will this critical, life-saving technology finally be implemented.”

Supporters of the extension say it is necessary to prevent an interruption in passenger and freight rail service at the end of the year, however. 

“Completion of the Positive Train Control mandate by the end of the year is not achievable, and extending the deadline is essential to preventing significant disruptions of both passenger and freight rail service across the country,” House Transportation and Infrastructure Committee Chairman Bill Shuster (R-Pa.) said in a statement trumpeting the extension.  

“Railroads must implement this important but complicated safety technology in a responsible manner, and we need to give them the necessary time to do so,” he continued. 

The Chemistry Council said “a transportation disruption of this magnitude would have cascading impacts that would threaten the nation’s food, energy and water supplies, as well as nearly every sector of the U.S. economy including manufacturing and construction.

“As the report details, a disruption of rail service lasting only one month will result in a 2.6 percentage reduction to U.S. real GDP growth during the first quarter of 2016, which would put a major chill on just about every leading indicator in the first quarter,” the group said. 

Transportation department officials in the Obama administration have said they have little choice but to enforce the mandate unless Congress can come to agreement on an extension. 

“The reality is without Congress doing something, we’ve got a deadline coming up and we’re going to have to enforce that deadline,” Transportation Secretary Anthony Foxx told reporters earlier this week. 

“Many of the concerns [railroads] raise appear to be legitimate concerns, but as far as we’re concerned, the deadline at present is what it is and we have to enforce against it, absent some congressional action,” Foxx continued.