What began as a promising project proposal has now devolved into a game of legal tug-o-war between BNSF Railway and the California Superior Court. Just last week, the California court rejected BNSF’s proposal for a near-dock rail yard just north of the LA-LB terminal. The lower court ruled that the proposal’s environmental impact report was inadequate, thus delaying the project for at least another two years. BNSF has begun to appeal the court’s decision through the appellate court, stating that the court is overstepping the boundaries in which the California Environmental Quality Act (CEQA) can operate in. BNSF has stated that if the original ruling stands, they will have no choice but to abandon the $500 million investment altogether.
The goal of the project is to build a rail yard that is primarily used for transferring international containers to intermodal trains, which will significantly reduce truck congestion and traffic on the busiest, largest U.S. port complex. A project ten years in the making, the plan has always been to link this “Southern California International Gateway” to the intermodal Hobart yard located in downtown Los Angeles. BNSF believes that this project can be the precedent of many transportation infrastructure projects that will greatly reduce the traffic in Los Angeles and improve the efficiency of the port complex. In the same week of the ruling, the LA-LB port complex faced technical difficulties and shortages that resulted in delays at multiple terminals, lasting anywhere from two to five hours. Needless to say, if the rail yard can indeed reduce traffic and improve efficiency, it is something that everyone can benefit from.
Unbeknownst to most, the rejection of the proposal was not actually based on the environmental friendliness (or lack thereof) of the rail yard itself. Rather, because it will reduce the international cargo volume directed to the Hobart yard, there is reason to believe that a decrease in international cargo traffic will only be offset by an increase in domestic cargo traffic. And since the proposal fails to address the future use and impact of the Hobart yard, the ruling was given to prevent the possible increase in overall traffic and congestion.
From a business standpoint, BNSF is strongly motivated to realize this project so it can increase the volume of intermodal cargo which fuels its coal and oil business. Its main competitor, Union Pacific Railroad (UP), owns the Intermodal Container Transfer Facility that is just five miles off the terminal harbor. With a decline in business the past two years, BNSF is betting a lot on this proposal to maintain its competitiveness with UP. To defend its proposal, BNSF included a $100 million commitment to green technologies for the SCIG, such as electric cranes and use of solar energy.
Despite the support of the port and city of Los Angeles, the legal battle is a difficult one because of the complexities in the relationship between BNSF and the port. The project would directly benefit both the port of Long Beach and Los Angeles, so their support in the appeal lacks objectivity. The appeal’s success will hinge on the appellate court’s interpretation of the CEQA and whether or not the Hobart yard’s future use is under CEQA’s jurisdiction. Because of CEQA’s broadness and the uncertainty of the rail yard’s effect on traffic congestion, the appeal of the lower court’s ruling can still go either way.