- The Washington Times - Monday, September 15, 2008

A lawsuit by the city of Alexandria over the safety of a new ethanol transfer station puts the city at the forefront of a rising tide of disputes over how alcohol should be used to reduce the nation’s dependence on foreign oil.

In Alexandria and other communities nationwide, some residents are more concerned about their homes getting burned down in an accidental fire than federal policy on use of the highly flammable form of alcohol.

In April, Norfolk Southern Railway started operating an ethanol transfer station in Alexandria.

The city of Alexandria responded by filing a lawsuit against Norfolk Southern, which uses the station to transfer ethanol between trains and trucks for distribution to motorists. The railroad countersued to win a right to continue operating the facility.

Ethanol is distilled from agricultural crops, particularly corn.

As gasoline prices climbed in recent years, Congress ordered oil refiners to blend more ethanol into the nation’s fuel supply.

The dispute involving Norfolk Southern’s Van Dorn Street rail facility in Alexandria presents potentially far-reaching issues.

“Rail is the only practical means to move large quantities of ethanol from many production facilities to distribution points near the blending facilities,” said Robin Chapman, Norfolk Southern spokesman.

The ethanol in Alexandria is destined to be transferred to trucks for storage in tanks at Newington and Fairfax City, then trucked to distributors for sale to motorists.

In a lawsuit filed in U.S. District Court for the Eastern District of Virginia, the city is claiming Norfolk Southern should be subject to local and state safety laws that would impose new regulations on the railroad to prevent fires or explosions. The city bases its authority over Norfolk Southern on Virginia’s “haulage permits,” which railroads obtain for the right to carry freight through the state.

Norfolk Southern says local and state jurisdiction is pre-empted by federal law. Congress reserves regulatory authority over railroads to the Federal Railroad Administration.

Alexandria filed a second petition before the Surface Transportation Board, a federal agency that rules on disputes with railroads.

The city seeks a declaratory judgment saying the transfer station is a facility operated by shippers, not the railroad.

The distinction is important to decide whether the federal government or local government can regulate its safety compliance.

If it is a railroad facility, the federal government decides the rules Norfolk Southern must follow. If it is a shippers’ facility, the local and state governments can decide.

A loss for Norfolk Southern before the Surface Transportation Board could subject railroads nationwide to a patchwork of local safety regulations.

The lawsuits are pending before the U.S. District Court and the Surface Transportation Board.

Alexandria’s lawsuit is one of the first to challenge the authority of corporations to operate ethanol facilities but is unlikely to be the last, according to Austin Durrer, spokesman for Rep. James P. Moran Jr., Virginia Democrat.

“Other people are going to be experiencing these same issues in other parts of the country,” Mr. Durrer said.

Under the Renewable Fuels Standard amended by Congress in 2007, oil refiners are required to gradually increase the amount of biofuel - primarily ethanol - in the nation’s fuel supply until it reaches at least 36 billion gallons, or 20 percent of motor fuels, by 2022.

About 9 billion gallons of ethanol are being produced this year as fuel additives, or about 7 percent of the nation’s fuel supply.

Mr. Moran introduced an amendment to the annual funding bill for the Department of Homeland Security calling for an investigation of safety at the facilities.

The safety dispute has caught the eye of the biofuels industry, which says the hazards of ethanol are small compared to the benefit it provides.

“The one tool that we have available to us today to begin addressing the fuel shortage is ethanol,” said Matt Hartwig, spokesman for the Renewable Fuels Association, a trade organization for the biofuels industry. “Oil and gasoline are extremely flammable, and yet we still have those around. Our track record in that area is very, very sound. It’s a safer fuel than gasoline.”

cIn other news …

cIf any court decides whether Saudi Arabia’s Prince Bandar bin Sultan laundered bribe money through Riggs Bank in the District, it will not be the U.S. District Court for the District of Columbia.

Last week, federal Judge Rosemary M. Collyer dismissed a lawsuit involving the assertions, saying only British courts have authority to decide the dispute.

The ruling was based on a lawsuit filed by the City of Harper Woods, Mich., Employees’ Retirement System, which was an investor in British defense company BAE Systems PLC. The lawsuit accuses BAE of breaching its financial duty to investors by using bribes to Prince Bandar to secure Saudi military contracts, then laundering the money through Riggs Bank to hide the source of it. Prince Bandar is a former Saudi ambassador to the United States.

cA federal judge last week helped to ensure the upcoming trials for Guantanamo detainees will be done under a cloud of secrecy.

Attorneys for the detainees will get access to classified information the military used to decide which terrorism suspects should be incarcerated, but only if they sign a “memorandum of understanding” in which they agree not to divulge the evidence.

The memorandum, written by U.S. District Court for the District of Columbia Judge Thomas F. Hogan, requires defense attorneys to sign statements saying, “I agree that I shall never divulge, publish or reveal either by word, conduct or any other means, such classified documents and information unless specifically authorized in writing to do so by an authorized representative of the United States government…”

A protective order included with the memorandum sets conditions and locations where the attorneys can meet with their clients.

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