Leesport, PA— When Dwayne Kuhns opens his front door along Route 61 in Leesport, he sees a long line of idle railroad tanker cars.
They’ve been there for months and could be there much longer — at least while oil prices remain near $45 a barrel. When oil was $145 a barrel, it made sense to ship oil by rail. Now, the price is so low it’s cheaper to move it by pipeline or even to buy imported oil.
“I see them out my front door every day. Doesn’t really bother me,” Kuhns said.
Heading north along Route 61, the line of stored rail cars appears suddenly from behind trees near Leesport. The line continues through Shoemakersville and Ontelaunee and Perry townships, ending near Hamburg.
“I spoke with a railroad worker, and he said they are oil tankers, and with crude so low, they are not being used,” Kuhns said. “The tracks are not used at this time, either.”
Once used to transport oil from the Bakken crude oil fields in North Dakota to refineries in Philadelphia and New Jersey, the rail cars have been idled by the low oil prices.
The tankers originally were owned by a variety of rail car manufacturers, then bought or leased by oil companies that lease track space from the Reading Blue Mountain & Northern Railroad Inc., also known as Reading & Northern Railroad, according to Wayne Michel, president of the railroad company.
Five years ago, the rail cars across the street from Kuhns’ house were all boxcars. Now, they are primarily oil tankers.
Michel said the type of idle rail cars parked on the unused rail siding is largely determined by the economy. He estimated there are 2,000 rail cars parked on the Reading & Northern siding from Leesport to Hamburg.
Michel did not want to discuss who owns the cars or why they are parked there, saying it was a confidential business matter. However, data compiled by the Association of American Railroads (AAR) may explain why oil tankers have replaced covered grain hoppers on the Reading & Northern siding.
A Sept. 16 AAR report shows that while rail grain shipments were up 3.6 percent, oil shipments by rail were down 13.5 percent in 2015.
“Railroads are a derived-demand industry, meaning that demand for rail service is a function of demand downstream for the products railroads haul,” said John T. Gray, AAR senior vice president for policy and economics.”
“We’re optimistic that the economy will continue to grow,” Gray added. “Demand for rail service should continue to grow with it.”
Michel declined to say how much he charges companies to store idle rail cars.
When Reading & Northern first began storing cars on its Berks County siding, it raised enough to keep the small company afloat through the recession, Michel said, noting that the railroad and its subsidiary companies employ about 200 workers. “Reading & Northern has long been in the storage business when its track is not being used,” Michel said. “If we have the room, we are happy to provide the service, and we have the space now.”
‘Not a police problem’
Scott Eaken, chief of the Northern Berks Regional police, said the rail cars may be considered an eyesore by some, but they haven’t been a nuisance or a source of mischief.
“We have not had any trouble with the rail cars,” Eaken said. “They might be a pain to look at, but they are not a police problem.”
When business is slow, the rail cars are not needed, and they have to go somewhere, said Brian Gottschal, director of the Berks County Department of Emergency Services.
Gottschall and Cory Angell, spokesman for the Pennsylvania Emergency Management Agency, said their agencies do not regulate or monitor the number of idle rail cars stored on tracks in the county or state.
Rail cars are required to have a placard warning of any dangerous or hazardous cargo or residue. Each tanker along Route 61 carries a red, “flammable-liquid” placard with the number 1267 on it, meaning it was once used to transport petroleum products like crude oil or diesel fuel. The rail cars are mostly empty, but may contain petroleum residue.
Shoemakersville Mayor Wayne Kepner and borough council President Mark Kimmel said they haven’t received complaints about the rail cars, either now or over the years.
“But that’s because there are only about 50 to 100 yards of rail cars in the borough,” Kepner said. “They kind of stopped at the Perry Township line.”
“For one reason or another there are not that many in Shoey,” Kimmel agreed. “It is not a problem in our borough.”
Perry Township supervisors were concerned that the idle cars parked in the township were placarded as oil tankers.
“Actually, the supervisors asked our emergency management director to check them out,” said Rosanne R. Adam, township secretary-treasurer. “He told the supervisors there was nothing in the tank cars, so the supervisors were OK with them as long as they were empty.”
Contact Dan Kelly: 610-371-5040 or email@example.com.
This article was written by Dan Kelly from Reading Eagle, Pa. and was legally licensed through the NewsCred publisher network.