Promoters of coal slurry pipelines won a major endorsement yesterday from the chairman of the Interstate Commerce Commission who urged "equal opportunities" for the controversial technology.
"I don't think that coal slurry pipelines should have to wait in the wings until all the problems of the railroads are solved," ICC Chairman Darius Gaskins told the Slurry Transport Association in Lake Tahoe, Nev.
"The very existence of a slurry pipeline alternative will place a healthy competitive restraint on coal rates. This, in turn, will provide grounds for less regulatory intervention in settling coal transportation rates," Gaskins said.
In another major railroad development, Southern Railway Co. and Conrail yesterday announced an agreement on their 27-year-old conflict over joint rates.
The issue had been considered a major roadblock in efforts to pass railroad deregulation legislation currently before both houses of Congress.
Calling the agreement a "substantial breakthrough" toward the goal of achieving regulatory reform, Conrail Chairman Edward Jordan said the new formula for determining joint rates could be a major step in "alleviating" the industry's "chronic earnings problem."
In their joint handling of traffic, Conrail and Southern account for a substantial portion of the freight moving between the Northeast and the South. The ICC has proposed a surcharge in an attempt to balance the joint-rate formula, which Conrail officials argue is inequitable because its costs are higher than Southern's.
The Conrail-Southern proposal would permit the rail lines to impose surcharges on joint rates, but participating railroads would have the authority to cancel those surcharges where the line proposing the fee earned at least 110 percent of its variable costs.
Although it is unclear whether members of Congress or industry officials will endorse the proposed legislative language, representatives of the two companies say they hope other rail executives will support the measure.
Meanwhile, Gaskins' remarks to the industry group may not sit well with the railroad industry, which repeatedly has suggested that development of slurry pipelines threatens their coal traffic revenues.
"There are some who would argue that coal slurry technology should be suppressed in the interest of protecting rail revenues," Gaskins said. "However, I have little sympathy or patience with that line of thinking."
Gaskins pointed out that while economic, technological and environmental questions about coal slurry pipelines need to be answered, their ultimate development could aid troubled railroads.