Lawmakers seek oil transportation fee for safety programs
ST. PAUL -- Improved crude oil safety measures should be funded by charging 0.01 cent per gallon on all crude transported in Minnesota, the state Legislature's transportation finance chairmen said Wednesday.
“This particular oil is especially volatile and as we have seen through recent catastrophic accidents in North Dakota and Quebec, our communities and neighborhoods are at increased risk,” Rep. Frank Hornstein, D-Minneapolis, said in announcing the initiative on the edge of a St. Paul railyard along with Sen. Scott Dibble, D-Minneapolis.
“Danger is all around us,” added lawyer Paul Blackburn, who is helping draft a bill.
Groups supporting the proposal say 2,000 crude oil trains a year pass through Minnesota transporting oil from western North Dakota. Most of the rail traffic is from Fargo, N.D., through the Twin Cities.
Eight major pipelines in Minnesota move crude from North Dakota and Alberta, Canada.
Blackburn said rural areas are most at risk in pipeline and railroad oil spills. And those are the areas with fewer resources to deal with spills, he added.
Early estimates are that the new fee could collect up to $30 million a year. Proceeds would be used to equip and train local agencies such as fire departments to respond to oil spills, as well as funding better disaster planning.
Dibble said no decisions have been made about how money would be split among areas of the state.
BNSF Railway Co., one of two major oil-hauling railroads in the state, did not comment directly on the proposed fee, but pointed out that it has trained many Minnesotans to deal with hazardous material incidents.
“We look forward to the opportunity to discuss the legislation with legislators and the administration, as well as our safety record and the current emergency response resources we have in place,” Amy McBeth of the railroad said.
She said that 99.9 percent of hazardous materials BNSF hauled last year arrived without incident.
“Still, we believe that one incident is one too many and work to prevent them from happening in the first place through investments in our infrastructure, employee training and track and equipment inspections,” McBeth said.
Since 2009, the railroad has provided free first-responder training to 730 Minnesotans, she said.
State Rep. Michael Beard, R-Shakopee, said the state cannot tax oil moving through the state because the U.S. Constitution gives that power only to federal government.
“It is patently unconstitutional,” Beard said of the fee. “It’s not going anywhere.”
When Blackburn was asked about the constitutionality of the fee, he said that as long as it was moderate that it should be allowed.
If crude oil is taxed, Beard asked, why not other potentially dangerous substances such as propane? The proposal only calls for crude oil fees.
Beard called the Hornstein-Dibble proposal “over governing.”
However, if there is a need for more education and public awareness of the situation, Beard said that he might support work in that area.
Hornstein and Dibble, who next week plan to announce an unrelated motor vehicle fuel tax increase, said their legislation likely will include:
- Adding a 0.01 cent per gallon tax on pipelines, railroads and truck tankers that transport crude oil in Minnesota.
- Requirements that the state Pollution Control Agency issue oil safety standards that go beyond federal requirements.
- A mandate to develop oil emergency response plans in counties in which the highest concentrations of pipelines and railroad tracks that move oil.
- A requirement that state officials have “spill response standards” before tankers ship crude oil on Lake Superior, something in the early discussion stages.
The state's readiness for an oil spill, and potential explosion, is “woefully inadequate,” Hornstein said.
For instance, he said, few fire departments have the equipment or foam needed to douse crude oil fires.
Phillip Qualy of the United Transportation Union said trains can transport oil safely, but said more inspections are needed. Most inspections are done by federal personnel, but the state also could be involved.
Qualy said conductors in his union support higher standards for oil-carrying cars, a discussion already underway at the federal level.
Railroad and pipeline companies did not immediately respond to requests to comment on the proposed legislation.