Unfinished Business

Putting Profits Above People

Photo by Jingming Pan on Unsplash

Putting Profits Ahead of People

My heart goes out to the people of East Palestine, Ohio. Their world was upended last month when 11 Norfolk Southern Railway cars containing hazardous chemicals careened off the track. A controlled venting created a toxic gas plume threatening the health and safety of its population of 4,700.

This past week the Bipartisan Railway Safety Act of 2023 was introduced into the House and Senate to require the U.S. Secretary of Transportation to revise the definition of a "high hazard flammable train" to include any train with at least one rail car containing flammable materials.

This Federal legislation also would require minimum inspection time for rail cars, and mandate at least a two-person crew. Rail carriers would have to notify state emergency systems if hazardous substances are being transported, provide toxic substance training to railroad employees, and develop emergency response plans. Detectors alerting the crew to overheated bearings also would be improved, and maximum fines for safety violations would be increased.

The EPA has ordered Norfolk Southern to pay the clean-up costs. Earlier this year, the company announced record profits in 2022, along with a "bold" new strategic plan to create long-term shareholder value. But Norfolk Southern's rate of accidents also has increased in each of the past four years, according to an earnings call presentation on January 23.

It's too late for the community of East Palestine to benefit from these reforms, and its residents are left to worry about the long-term health consequences of contaminated soils and water. But passage of this legislation may protect other small, rural communities from a similar nightmare. Across the industry, the adoption of Precision Scheduled Railroading (PSR) has slashed nearly one-third of all rail jobs over the past six years. A 25% increase in average train length since 2008 also has raised red flags. Railroad union members nearly went on strike last year to protest working conditions.

 Iowans shouldn't shrug off what happened in East Palestine, Ohio, as an isolated catastrophe. It's part of a pattern of U.S. companies and corporations externalizing their costs of doing business onto Americans.

Pollution is a major external cost. In Marengo, Iowa, on December 8, C6-Zero, a shingle-recycling plant exploded. Part of the town, population 2,435, was evacuated, and more than a dozen workers required treatment at the University of Iowa Hospitals & Clinics. When first responders and emergency personnel arrived on the scene, they had no idea what hazardous chemicals were inside the plant. That's because C6-Zero had refused over the past 19 months to provide this list to the state of Iowa. Instead, it argued that it was exempt from permit regulations because it wasn't a recycling plant. The fire, located less than one mile from the Iowa River, contaminated soil and produced large runoff pools of contaminated water. DNR was denied access to the facility until February.

Clean-up is finally underway, after C6-Zero provided funds to the clean-up companies hired by the state. But it will remain a huge scar in this community. The Iowa DNR had been notified that the plant’s owner was facing extradition to Texas for illegal dumping of shingles, and that the company had issues at its Colorado location. Yet C6-Zero was allowed to operate without a proper permit in Iowa, and it outsourced its risks and costs of doing business onto people in the community of Marengo.

Carbon capture pipelines

One argument for building the Dakota Access Pipeline across Iowa, allowing a private company to use the power of eminent domain, was that it would be safer than rail to transport crude oil from the shale drilling in North Dakota. (However, the pipeline connects to an oil-by-rail hub in Patoka, Illinois, also owned by Energy Transfer Partners.) The Iowa Utilities Board agreed that safety of transport was a "public benefit" outweighing the potential risks of future pipeline leaks, damage to topsoil, and the taking of land from farmers.

A major debate underway in the current Iowa legislative session is the construction of underground pipelines, primarily from ethanol plants, to capture, transport and permanently store CO2, a colorless, odorless, and nonflammable gas that can form a plume threatening human health. Farmers and landowners are attempting once again to persuade Iowa legislators to protect their topsoil, tiles, and long-term investment in agriculture. Rural residents also are raising concerns that their communities would be vulnerable in case of a carbon pipeline leak.

This risk is not remote. In 2020, in Satartia, Mississippi, more than 200 people were evacuated and 50 people received medical attention as the result of a liquified carbon pipeline leak. None of the sheriffs' deputies or volunteer firefighters had any emergency training in CO2 leaks.

The Pipeline and Hazardous Materials Safety Administration, operating under the US Dept. of Transportation, issued its largest-ever fine ($3,866,734). Its report stated that the company underestimated the potential size of the affected area, and delayed notifying officials.

The new rules are encouraging, according to the nonprofit advocacy group, Pipeline Safety Trust, but these regulations won't be written before some of the companies plan to begin construction across 681 miles in Iowa.

Currently, the U.S. has 5,000 miles of carbon pipelines, and most of these are for enhanced recovery of oil. It's estimated that between 30,000 and 65,000 miles of pipeline would be needed to combat climate change. Iowans living along these pipelines, as well as the emergency rescue and fire personnel (many are volunteer) would be exposed to these risks. The company owners and shareholders will reap the tax credits and move on before the actual feasibility of carbon storage is determined.

Past is Prologue

Iowa has a history of allowing livestock operations to outsource their costs of doing business. Industrial-size operations began doing this in the 1980s and it continues today. Many local, small, sustainable hog producers were forced to quit raising hogs in the name of "efficiency." The overriding justification is lowering the costs of food to consumers. The CEO of Summit Carbon's parent group was at the forefront of the consolidation of Iowa's hog industry. Afterwards he sold his business, and moved on to ethanol. Iowa's waterways and the residents who live next to the odors from these confinements were left to suffer the repercussions. Yet Iowa legislators passed laws to reduce the ability of neighboring property owners to successfully litigate. In 2017, the Iowa DNR conducted a satellite study of animal confinements and discovered an additional 5,000 operations. Many never had applied for construction permits.

Climate change is perhaps the most egregious example of what can happen when profits are placed above people, and the costs of doing business are externalized. Most of the climate impacts that Americans and others across the world are enduring today are inflicted in the name of capitalism. Companies argue that it's just too costly to protect human life, health, the water that people drink and the air that they breathe.

Unfortunately, a relentless pursuit of efficiency has been allowed to override almost all other considerations. Granted, practices or systems like Precision Scheduled Railroading or longer, heavier trains, may be more efficient, but that doesn't mean that they're in the national interest. We're told that government should stay out of the way of markets. Yet, government and the elected officials in a democracy should be in a better position to judge what’s in the national interest than businesses, or the markets. Businesses, left to their own devices, will pursue their own self-interests, denying the evidence of detrimental impacts and fighting against regulations requiring pneumatic brakes or adding stronger tank cars on trains carrying hazardous chemicals. It’s why we need child labor laws and worker's compensation insurance.

Unfortunately, what we’re seeing in Iowa today is that many elected officials are working hand-and-glove to elevate businesses (and the private sector) over people. Taxpayer dollars are being siphoned off to privatize education. Private property, a fundamental value in a capitalist system, is almost certain to be sacrificed for a carbon pipeline built by a private business. Companies, like the one in Marengo, are allowed to flout state regulations enacted to protect the health and safety of people.

Capitalism, after all, is an economic system of markets. But the U.S. isn't simply a nation of markets that exist apart from the reality of their economic impacts on humanity. We're a nation of people, and we need a well-regulated capitalistic system. Local, state, and national officials are supposed to make sure that businesses and people don’t pollute water, soil, and air. The power of government must be used to balance the excess of businesses.

In fact, President Biden is likely to use his first veto to allow pension fund advisors to make ESG (Environment, Social and Governance) investments. This Dept. of Labor rule would reverse a Trump era rule requiring advisors to only consider the highest returns. Republicans are describing it as “woke capitalism.” Twenty-five states, including Iowa, are asking the rule to be blocked.

Just asking: Why shouldn’t advisors be allowed to consider the risks of climate change, or fair pay practices, or gender diversity? Why shouldn't bad actor companies flouting regulations and laws, or good governance, suffer the consequences? It's time, for the common good of this country, as well as the state of Iowa, to align our individual and collective interests. As John Stuart Mill wrote in his essay on Liberty, "The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others.

Photo by Kenny Eliason on Unsplash

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