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Ethanol producers complain about rail service

Published on NewsOK Modified: April 3, 2014 at 3:19 pm •  Published: April 3, 2014

OMAHA, Neb. (AP) — Ethanol producers say clogged rail lines and other shipping problems have forced them to reduce production of the fuel and contributed to higher prices.

The Renewable Fuels Association criticized railroads Thursday and triggered a strong response from the Association of American Railroads.

RFA President and CEO Bob Dinneen said railroads should take the blame for ethanol prices jumping more than $1 a gallon between early February and late March. That increase has contributed to higher average gasoline prices nationwide.

The ethanol industry was producing 949,000 barrels per day in December. By early March, that had dropped to 869,000 barrels per day because ethanol storage tanks were full and rail shipments were slowed.

"Nothing has changed with regard to ethanol production costs or efficiencies," Dinneen said. "The only change has been abject failure of the rail system to adequately address the needs of all its customers."

Railroads have also been criticized this year by farmers and grain elevators in North Dakota who complained about shipment delays.

Both the farm groups and the ethanol trade group question whether the surge in crude oil shipments coming from North Dakota's Bakken oil field is disrupting other shipments. Railroad officials say that's not the case.

The major U.S. railroads delivered 434,042 carloads of crude oil in 2013, up from 236,556 carloads the year before.

But even with the significant growth, crude oil shipments remain a relatively small part of the total freight railroads handle.

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