FINANCIAL EDGE, RAILWAY AGE FEBRUARY 2025 ISSUE: Let’s face it: Dieting is hard. Perhaps you count yourself in the group that makes weight loss a New Year’s Resolution/Priority. Depending on what you read and when you’re reading it, 15%-50% of the population makes a New Year’s Resolution to lose weight. However, by the second Friday of the new year, many resolved dieters land on “Quitter’s Friday.” Quitter’s Friday is the hill on which New Year’s Resolutions go to die.
Permit a brief refresher please: CARB wanted all locomotive users—railroads (big and small) and industrial users—to comply with a rapid (by railroading standards) phaseout of locomotives built prior to 2007 along with payments made by locomotives operators into a carbon offset account. This account functioned like a purgatorial Health Savings Account into which users were required to pay based on their level of emissions. It was a kind of swear jar from your health insurance provider into which you paid every time you ate a potato chip or ate the second half of that “Sharing Size” Butterfinger.
Fad diets rarely out-distance reasonable better eating habits and consistent physical activity. Apologies to all those who have “Gone Keto,” drink bulletproof coffee, or who are supporting the Atkins family heirs with Amazon or dollar store purchases of Dr. Atkins products. Unraveling the CARB plan’s viability indirectly results from the newly inaugurated Administration. Clearly the folks running CARB came to a quick realization that picking a fight with the Executive Branch probably wasn’t going to end well. This would seem to be especially prospective after the flurry of new day one Executive Orders supporting additional investment in fossil fuel production and consumption and the decision to put an end to subsidies related to the purchasing of electric vehicles and the installation of charging stations, as well as pulling out (again!) from the Paris Climate Accord.
One burden of the CARB rule was that it penalized the industry for its locomotive frugality. It is not unusual for locomotives that are 40, 50, or 60 or more years old to remain in service on short line railroads and in the industrial marketplace. In locomotive use today, most switcher locomotives are used units. (A switcher is a lower-horsepower, usually four-axle locomotive, as compared with a six-axle higher-horsepower unit.) This is the result of a number of factors: railroad consolidation, changing operational practices, and the three most controversial letters in railroading, PSR.
There has not been any material building of four-axle locomotives since the mid 1980s. For companies operating these older locomotives, the “replacement cost” for a battery-powered switcher or a Tier IV emissions-compliant switcher could be crippling. Ditto for the financial charges for the emissions offsets.
There are not going to be frowns from companies that were going to be impacted by implementation of the CARB locomotive plan. Chiefly, BNSF and Union Pacific stand to benefit from not having to think about segregating their locomotive fleets. However, while they might be the largest recipients, the happiest will be smaller industrial companies currently operating those older switchers at their facilities. Ditto for the short line railroads in California, as they generally run older locomotives.
The companies in California now need to move money put into the CARB Emissions account back onto their balance sheets. More challenging is deciding what the future will hold for them vis-à-vis CARB. For as certain as more than 25 Executive Orders were signed on Inauguration Day, one would expect a concomitant response four years from now if there is a change in political party. That would likely include a shift in policy out West.
Or perhaps CARB decided fad diets didn’t make sense in 2025 and that they would work to a more inclusive, collaborative strategy to achieve emissions goals rather than their typical “ready, fire, aim!”
Or perhaps California just has bigger things to worry about right now. The world’s fifth largest economy looked rather pathetic fighting with the incoming Administration while portions of Los Angeles were burning. That war of words was over something (local firefighting) that California does control. Perhaps the only lesson learned was that California’s ability to fight too many fires at once was more compromising than they originally thought. This reprieve, while welcomed by users, might only be temporary. After all, like a coward, a dieter’s resolve dies many deaths.
