Generally, I love Alexandria, Virginia, the city I live in just outside Washington DC. Perhaps, it’s because I am a ninth generation Alexandrian. But, as much as I might like my home, I loathe city politics.
Typically, my issue of "FYI: Alexandria", the city’s newsletter, is confiscated long before I have a chance to read it. This is a good thing as it keeps my blood pressure down and generally improves my quality of life. Unfortunately, this past weekend, as I was returning from Japan, the postman spotted me in the corridor of my flat and handed the recent issue of FYI directly to me along with a box of mail.
Then, I made the mistake of opening that same issue and ruining my Saturday morning. Apparently, the most important thing that has happened in Alexandria in my absence is that the city has decided to spend some of my real estate tax dollars on trying to close a Norfolk Southern (NYSE: NSC) ethanol transloading facility located on the extreme western edge of the city. The city has made a point of highlighting the term transloading, I suppose with the intent of scaring people. But, transloading is nothing more than the process of taking ethanol out of railcars and putting it into tanker trucks for transport locally.
Ethanol is simply an alcohol typically derived from corn in the US. It
is used as a fuel additive; in fact, the government mandates mixing
ethanol with gasoline in many parts of the country, including
Alexandria City. Most petrol stations in the area proudly display a
sign stating that the fuel they dispense contains 10% ethanol.
Ethanol can’t be transported by pipeline because it’s corrosive and has
a tendency to evaporate (after all, it is alcohol). Therefore, the vast
majority is transported by railroads like Norfolk Southern and then
shipped locally by truck to be mixed with fuel. In fact, Norfolk
Southern, reported earnings this morning and the following quote from
their conference call reveals the importance of ethanol to rail freight
volumes: “Record agricultural revenue and shipments were driven by
continued growth in ethanol, which was up 20% primarily [in] the
Southeastern market.”
But I digress. The City has decided to fight this Norfolk Southern
transloading facility for what I gather to be no particular reason at
all. The most I could glean from their statements is that the existing
railroad depot where the transloading facility is sited is located 600
feet from a school and in a densely populated area. Since that depot
has been around for decades, I can only suppose that the concerned
“local residents” were well aware of its existence when they made the
decision to purchase a home in the area.
In addition, apparently the City managed to mangle the permitting
process when Norfolk Southern first announced they were building this
facility on their existing depot site. Also, the City Council has
decided that despite the fact this was their mistake it was somehow
Norfolk Southern’s responsibility. This is precisely the logic that
makes reading FYI such a pleasure.
The City has now organized protests and put up a website decrying the
supposed evils of ethanol transloading. For those of you interested,
here’s the website:
http://alexandriava.gov/special/transloading/default.aspx. This website
would be amusing if it weren’t so tragic. In particular, I am fond of
the slideshow of the protest against Norfolk Southern and the photo of
a sign that reads “Save our School.” There was a gasoline station
located approximately the same distance from my room in University;
however, I never lost any sleep to the thoughts of that facility
exploding.
If anyone has ever wondered why US infrastructure is so universally
pathetic, this is it. People want energy and they want it cheap but
they don’t want to see it, smell it or hear about it for any reason.
I am quite sure some of the citizens and city council members that were
out protesting against Norfolk Southern later drove their SUVs by their
local Exxon station and filled their tanks with gallons of gasoline and
ethanol that went through the very same facility. These same uninformed
and shameless citizens want to have bountiful supplies of fuel but do
not want that fuel to pass through densely populated area which would
include, by definition, cities.
Others, claiming to be environmentalists, oppose the construction of
new ultra-efficient coal-fired power plants that would drastically cut
emissions of all sorts of pollutants. They then complain vigorously
when utilities continue running existing coal plants.
Naturally, they oppose development of clean coal technologies and,
while they claim to want to cut emissions of carbon dioxide, they
paradoxically oppose nuclear power. All the while they hold out the
false hope of “renewable energy” and, as you might expect, bitterly
campaign against a proposed transmission line that would bring wind
power from West Virginia to the “densely populated” Northern Virginia
region.
In short, they want to have their cake and eat it too. But they definitely do not want to take that cake in their backyard.
The result of all this: the United States has shed its leadership
position in most key energy technologies. Tragically, the US will soon
fall behind China when it comes to electricity generation efficiency
even as we become a key supplier of coal to China. Within 2 to 3 years,
vast regions of the US will experience blackouts caused by a lack of
badly needed energy infrastructure.
The one positive to come from all this: Norfolk Southern’s response.
For disclosure, I recommend this stock in my newsletter, The Energy
Strategist.
They have done literally everything to assuage the City’s politically
motivated campaign. That includes installing safety equipment at the
site, training local firefighters and even buying special
fire-retardant foam for the City.
Thankfully they have not compromised on one key point: They have
refused to close the facility. They have also, quite rightfully,
claimed that the city has no right to regulate the existence or
permitting of the transloading facility. I wish them all the best in
their fight against the City of Alexandria’s shameless “Not In My
Backyard” posturing.
