Posts Tagged ‘STB members’

STB Nomination Continues to Languish in Senate

October 9, 2021

The nomination of Karen J. Hedlund to the U.S. Surface Transportation Board continues to languish in the U.S. Senate.

Hedlund, a Democrat, was nominated by President Joseph Biden to fill the seat now held by Republican Ann D. Begeman whose term has expired and who by law must leave the Board by Dec. 31. Begeman continues to be a voting STB member with holdover status.

The nomination of Hedlund was sidetracked on Oct. 6 when Senator Mike Lee (R-Utah) objected to Hedlund on the Senate floor.

Lee responded after presiding officer Senate Tammy Baldwin (D-Wisconsin) asked if Hedlund could be confirmed by unanimous consent of the senators present without a recorded vote.

Last August, Lee was the lone senator to vote against Hedlund when her nomination was considered by the Senate Commerce Committee.

Lee apparently has placed a “hold” on the Hedlund nomination, using a parliamentary procedure to prevent a motion from reaching a vote on the Senate floor.

Railway Age columnist Frank Wilner has reported that Hedlund has become a political pawn in an effort by the Utah congressional delegation to pressure the STB into supporting the efforts of a private-public partnership to build an 85-mile intrastate railroad in Utah.

The railroad, known as the Unita Basin Railway, would haul crude oil extracted from fracking operations to a connection with Union Pacific at Kyune, Utah.

Because it will connect with the national rail system, the UBR needs an STB certificate of public convenience and necessity.

STB Chairman Martin Oberman has expressed concern as to the financial viability of the project and the effects on the environment that it might create.

Wilner has written that some in Utah hold against Hedlund her prior professional associations with Oberman when she was practicing law in Chicago and Oberman was chairman of commuter operator Metra.

Hedlund is a former deputy administrator and chief counsel at the Federal Railroad Administration, a former chief counsel at the Federal Highway Administration, and most recently vice president and national strategy adviser at WSP USA.

Some in Utah fear that Hedlund will view the UBR project in the same way that Oberman does, although he also has said he does not currently oppose the project, but rather wants the STB to seek additional information about it.

The UBR project has already been before the STB already. In January 2021 the Board voted 2-1 that it meets the statutory standard for fast-track approval.

Oberman was the dissenting voter and dissented again on Sept. 30 when the Board voted 3-1 to deny a motion for reconsideration of its January decision. It is unclear when the STB plans to hold a final vote on awarding a certificate of public convenience and necessity to the UBR project.

Hedlund Intended to Replace Begeman on STB

May 3, 2021

The nomination of Democrat Karen J. Hedlund to the Surface Transportation Board is intended to be a replacement for Republican Ann Begeman.

Although Begeman’s term expired Dec. 31, 2020, by law she is eligible to remain on the board in holdover status for up to 12 months or until replaced.

Begeman has served two five-year terms on the STB and was acting chair until replaced in that position by Democrat Martin Oberman last January. STB members are limited to two five-year terms by statute. 

Hedlund will need to be confirmed by the U.S. Senate before replacing Begeman on the board.

Congressional observers told Railway Age magazine that Hedlund’s nomination is not expected to get a Senate floor vote until June or July.

A former counsel and deputy administrator at the Federal Railroad Administration, Hedlund since January 2015 has worked at WSP USA (then Parsons Brinckerhoff).

Previously she worked with federal, state and local transportation agencies as well as private companies to facilitate financing and development of transportation projects.

Those included Amtrak’s Gateway Program, Chicago O’Hare Airport Express Rail and the California High-Speed Rail Program.

Hedlund received a law degree from Georgetown University Law Center and a bachelor’s degree from Harvard University.

Hedlund Nominated for STB Seat

April 30, 2021

Karen Hedlund has been nominated by the Biden administration for a vacant seat on the U.S. Surface Transportation Board.

She previously served as chief counsel for the Federal Highway Administration, and chief counsel and deputy administrator at the Federal Railroad Administration.

Hedlund most recently has been involved with development of the Gateway project in the Northeast Corridor and a high speed rail proposal in the Pacific Northwest.

At one time she was a co-chair of the American Public Transportation Association’s Commuter and High-Speed and Passenger Rail Legislative Subcommittee.

STB Now at Five Members

January 12, 2021

The U.S. Surface Transportation Board now has its full complement of five members after Michelle Schultz took her seat on Monday.

It is the first time the Board has had five members since Congress approved a law in 2015 setting the membership at five.

Schultz, a Republican member, worked for the Southeastern Pennsylvania Transportation Authority, most recently serving as deputy general counsel.

Before joining SEPTA, she was an associate at White and Williams, representing businesses on financial matters, and also was a judicial law clerk for the U.S. Bankruptcy Court for the Eastern District of Pennsylvania.

Schultz earned a Master of Government Administration from the University of Pennsylvania; a Juris Doctor degree from Widener University School of Law; and a Bachelor of Arts from the Pennsylvania State University.

She is licensed to practice law in Pennsylvania and New Jersey.

Senate Confirms 2 STB Nominees

November 20, 2020

The U.S. Senate this week confirmed the appointments of Robert Primus and Michelle Schultz to the U.S. Surface Transportation Board, which brings the agency to its full authorized number of members.

The fourth and fifth members of the STB are expected to assume their posts shortly.

The STB is authorized by the 2015 Surface Transportation Board Reauthorization Act to have five members.

Current STB Chairman Ann Begeman’s term expires on Dec. 31 but by law she may remain in holdover status for up to 12 months.

However, she must leave the board if the president appoints and the Senate confirms her successor during 2021.

Begeman is in her second term on the STB and is seen by some Washington observers as unlikely to be renamed to the board.

Primus, a Democrat, was named to replace Democrat Deb Miller for a seat whose term expires Dec. 31, 2022.

Schultz, a Republican, will fill one of two new seats created by the 2015 law that had yet to be filled. She will serve a five-year term.

The term of Republican STB member Patrick Fuchs expires on Jan. 17, 2024 while the term of  Democrat Martin Oberman expires on Dec. 31, 2023.

The STB is expected next year to take action on a number of moves that have become bogged down due to the board being at less than full membership.

These include the method by which revenue adequacy is determined, including whether historical or replacement costs are to be used in computing a railroad’s investment base, and the method for estimating the equity portion of the railroad industry’s cost of capital.  

Also on the docket are matter of whether and how revenue-adequate railroads should be constrained in raising rates and how to simplify and make less costly the determination of reasonable rates where railroads are market-dominant.

Railway Age reported that this issue might be solved through agreement with the railroads that would avoid a post-decision judicial challenge.

The Association of American Railroads is considering proposing some manner of non-precedent-setting arbitration to decide all but major rate cases.

Other matters up for discussion and resolution include setting criteria for, and means to, providing competitive access at sole-served rail facilities; whether to eliminate paper barriers in line sale and line lease agreements that restrict short line railroads from interchanging traffic with competitors of the Class I railroad that sold or leased them the trackage; an appropriate formula for recovery of increased fuel costs; and whether previous regulatory exemptions should be withdrawn, given changed circumstances.”

Primus Nominated for STB Seat

July 23, 2020

Robert Primus had been nominated by the Trump administration to fill a Democratic seat on the U.S. Surface Transportation Board.

The 49-year-old career Democratic congressional staffer is expected to be paired on the Senate floor with Republican nominee Michelle A. Schultz, whose nomination has been stalled for three years pending the naming of a Democrat to fill one of the two vacant seats on the five-member board.

Current STB members are Republican Chairman Ann D. Begeman, Republican Patrick J. Fuchs and Democrat Martin J. Oberman.

The Senate Commerce Committee will consider Primus in a hearing that observers do not expect to be controversial.

Schultz was earlier recommended by the committee for confirmation.

Begeman, who controls the STB’s docket, is expected to hold any controversial cases until the two new members are seated.

However, Begeman’s term expires on Dec. 31 although she can remain in the post for another year pending confirmation of a successor.

Oberman Appointed Vice Chair of STB

January 8, 2020

Martin Oberman has been appointed as vice chairman of the U.S. Surface Transportation Board.

He succeeds Patrick Fuchs, who will continues to serve as a board member.

Oberman joined the STB member on Jan. 22, 2019.

He formerly was a member of the governing board of commuter railroad Metra and served on the Chicago Metropolitan Agency for Planning’s board.

Since 1975, Oberman has maintained practiced law in Chicago as a trial and an appellate lawyer. The STB vice chairmanship rotates among members on an annual basis.

STB Member Calls for Emphasis on Competition

November 14, 2019

A member of the U.S. Surface Transportation Board recently called for the agency to focus on encouraging competition among railroads.

Speaking at the Northwestern University Transportation Center’s Sandhouse Rail Group, STB member Martin Oberman said competition should be the “guiding light” for board decisions.

Oberman, who joined the STB last January, said he believes many shippers “have very little bargaining power” with freight haulers.

He said there are a few exceptions, most notably intermodal shippers.

“Some railroads would be very unhappy for me to say that, but I haven’t exactly shied away from that observation,” he said. “I think it’s really empirical if you look at what’s going on out there. Railroads don’t agree, I can tell you.”

Oberman also said that the importance of short line railroads to the U.S. rail economy should not be overlooked.

Short line railroads make up a third of the U.S. railroad network

“The short lines, for the most part, are much more entrepreneurial, much more customer-oriented, and they are much hungrier for business [than the Class Is], in my view,” Oberman said. “And they also don’t cause us as nearly as many headaches.”

Oberman is a former member of the board of directors of Chicago rail commuter agency Metra.

He acknowledged that when he went to Metra he knew little about the freight railroad industry and still considers himself to be a “a novice.”

However, Oberman said he is a “professional question-asker” who does his homework to learn as much as possible, and quickly, about the STB’s duties.

He said at times this has caused consternation among the STB staff.

“What I found about the railroad industry  . . . is that about half the time I ask a question about why are we doing it this way, there’s a good answer,” Oberman said. “And the other half of the time is, ‘We don’t know why we do it that way. That’s the way we’ve always done it.’ ”

Oberman said he has learned that the economics of the railroad industry are “extraordinarily complicated” because freight is subject to different pricing.

“Trying to understand what the real economics are and figuring out how the rates should be managed is really a mind-twister,” he said.

On another matter, Oberman said a major mandate of the STB is to “make sure the railroads have enough money to keep their infrastructure up.”

But that is colliding with demands from Wall Street to be more profitable.

“The railroads are spending millions of dollars on stock buybacks,” Oberman said. “I’m not anti-corporate. Stock buybacks have a role. But this is, as I said, a regulated industry. (And) when a shipper comes in to complain to (the STB) that he can’t afford the rates — are they charging the rates to keep the rails and ties in good shape or are they charging the rates for stock buybacks? We’re not mandated to protect the stock buybacks.”

A self-described liberal who is not afraid of government, Oberman said he is not the person to tell someone how to run a business.

Instead, Oberman believes that competition in the marketplace and market forces should determine that.

But that can be a challenge because there are so many places where there is physically no real competition.

Oberman said that as the STB considers its cases, “I have the distinct impression that the Class 1s, despite the game they talk, don’t really want to compete. And even if you said, no, there’s a customer there that’s dual-served, what’s really going on is, you don’t mess with my territory and I won’t mess with your territory. And they of course deny it.”

2 Seats on STB Likely to be Filled in Early 2020

September 20, 2019

Two open seats on the U.S. Surface Transportation Board could be filled by early 2020, Railway Age reported this week.

The Trump administration is reported to be considering naming Robert Primus as a Democratic nominee to go with Republican Michelle A. Schultz.

Schultz was nominated two years ago but her confirmation by the Senate has been stalled until a Democrat was named to fill a seat that by law must go to a member of that party.

Primus, 49, is a career congressional staffer who was recommended by Senate Minority Leader Charles E. Schumer (D-New York).

If Primus and Schultz are nominated and confirmed, they would join current board members Republicans Ann D. Begeman and Patrick J. Fuchs, and Democrat Martin J. Oberman.

The STB regulates railroads transporting freight in interstate commerce.

Railway Age said the confirmation process for Primus and Schultz is unlikely to be completed before December.

Under current law the maximum number of STB members is five.

The seat that Primus would hold has an expiration date of Dec. 31, 2022. Schultz would fill a seat that would expire five years after her confirmation date.

Although STB members are nominated by party, the agency is independent of executive branch control.

The party controlling the White House is allowed by law to hold three of the five seats.

If nominated and confirmed, Primus would become the fifth African-American to serve among 114 regulators confirmed by the Senate to serve on the STB or its predecessor, the Interstate Commerce Commission.

Primus does not have a railroad or shipping industry but served on the staffs of two legislators well-known to the railroad community, the late Sen. Frank R. Lautenberg (D-New Jersey) and former Rep. Michael Capuano (D-Massachusetts).

He earned an undergraduate degree in marketing from Virginia’s Hampton University, and participated in the Senior Managers in Government program at Harvard.

His grandfather and great-grandfather were employed by the Southern Railway in North Carolina.

Schultz, 44, initially was nominated 2017 and again in January 2019.

The Senate Commerce Committee endorsed her nomination in July pending the naming of a Democrat to serve on the Board.

She is deputy general counsel for commuter railroad Southeastern Pennsylvania Transportation Authority.

Earlier in her career, Schultz was an associate with the Philadelphia-based law firm of White and Williams, dealing with bankruptcy and commercial litigation, and a law clerk with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania.

She has an undergraduate degree in English from Penn State University, a master’s degree in government administration from the University of Pennsylvania, and a law degree from Widener University.

Railway Age said it has learned that shipper and railroad interests have told the Senate and White House that they have “no objections” to a Primus nomination.

Oberman Nominated for STB Seat

July 7, 2018

Martin Oberman has been nominated to serve as a Democratic member of the U.S. Surface Transportation Board.

The White House announced the nomination on Thursday on its website.

Oberman is a former chairman of Chicago commuter railroad Metra.

Subject to being confirmed by the Senate, Oberman will fill the remainder of a five-year term expiring Dec. 31, 2023.

That seat was voluntarily vacated in 2017 by former Chairman Dan Elliott.

Oberman was among at least eight Democrats who were being considered for the last vacancy on the five-member regulatory board

He received strong support from the Rail Customer Coalition, an association of trade groups representing major freight rail users.

The 73-year-old Oberman is an attorney who served on the Chicago City Council before being named by Mayor Rahm Emanuel in September 2013 to a seat on the Metra board of directors.

Oberman was elected chairman in 2014, serving until last October.

He also serves on the board of the Chicago Metropolitan Agency for Planning and is a past general counsel to the Illinois Racing Board.

Oberman graduated from Yale University and earned his law degree from the University of Wisconsin.

Two Republicans, Patrick Fuchs and Michelle Schultz, are awaiting Senate confirmation for STB seats but have been approved by a Senator committee.

The STB currently has two members Republican Ann Begeman, who serves as STB chair, and Democrat Deb Miller.