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Buttigieg announces investments in Michigan's rail system

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Rick Brewer
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WCMU File
U.S. Transportation Secretary Pete Buttigieg visited Lake State Railway in Saginaw on Thursday to announce the allocation of federal grants to support Michigan's railroad infrastructure. The grants are part of President Biden's infrastructure bill. Also pictured is congressman Dan Kildee (left) and John Rickoff (right), President and CEO of Lake State Railway.

U.S. Transportation Secretary Pete Buttigieg toured Lake State Railway in Saginaw on Thursday as part of a nation-wide tour to highlight investments in the nation’s transportation systems.

The funds and grant programs are part of the Biden administration’s infrastructure bill that was passed into law last November.

Michigan’s fifth district congressman Dan Kildee joined Buttigieg on the tour of the rail yard and met with reporters at a press conference.

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Rick Brewer
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WCMU File
Rep. Dan Kildee (far left) toured Lake State Railway in Saginaw on Thursday with U.S. Transportation Secretary Pete Buttigieg (center). Lake State Railway President and CEO John Rickoff (far right) helped lead the tour.

The State is receiving $30 million for two rail projects that will primarily help replace aging rail ways.

Specifically, the Michigan Department of Transportation will receive $21 million for the Great Lakes corridor just north of Ann Arbor where 41 miles of tracks will be repaired along with the 11 bridges and culverts.

The rest of the funds, totaling $8.6 million, will be awarded to the Western Michigan Railroad located in southwest Michigan to help repair aging infrastructure to help reduce supply chain log jams and allow trains carry more weight and move faster along the track.

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Rick Brewer
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WCMU File
Lake State Railway is based in Saginaw.

The Western Michigan Railroad system has 45 miles of track that is under slow orders, which means trains have to slow down to travel at a safe distance. With new tracks, the rail cars will be able to carry more weight, travel faster and result in fewer shipping delays, resulting in lower costs at the shelf. The timeline for when these tracks would go into place and what specific good prices would go down is unclear.

“This is this is an important moment,” Congressman Kildee said at a press conference at Lake State Railway. “For decades, as we know, this sort of investment has been woefully underfunded, we've been kicking the can down the road, not recognizing that it's impossible to compete in a 21st century global economy that's highly competitive with sometimes 19th century infrastructure.”

Kildee says this funding is proof that the government can work and investments in local infrastructure will help the U.S. compete in the global economy.

“We are competing in a highly competitive, global economy,” Kildee mentioned. “We can't compete, when, until recently, one of our major competitors China, was spending as a percentage of their GDP 10 times what we are on infrastructure.”

Buttigieg touted Lake State Railway as an example of how federal money is put to good use.

In 2019, Lake State Railway received two grants totaling $15 million from the Consolidated Rail Infrastructure and Safety Improvements (CRISI) program. Lake State Railway serves businesses in Alpena, Gaylord, Midland, Bay City and Flint. The funding allowed their trains to carry heavier loads and replaced century-old tracks.

“These are improvements that are going to affect our supply chain, helping to lower costs for families and make goods more affordable,” said Buttigieg. “And they're [Lake State Railway] laying the groundwork for a new generation of jobs and prosperity. Michigan is an ideal place to have that conversation.”

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Rick Brewer
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WCMU File
Rep. Dan Kildee speaking at a press conference at Lake State Railway in Saginaw. U.S. Transportation Secretary Pete Buttigieg (left) and John Rickoff, CEO and President of Lake State Railway, also made comments at the press conference.

Rising Gas Prices

During the press conference, reporters pressed Buttigieg and Kildee about what can be done right now to ease the pain at the gas pump for drivers. The average price of a gallon of gas in Michigan climbed has to 4.80 on Thursday.

Buttigieg says he met with Governor Gretchen Whitmer during his tour through Michigan and that no conclusions were reached about eliminating the state or federal gas taxes.

Buttigieg, the former Mayor of South Bend, Indiana and 2020 Presidential candidate, pointed to oil companies for the rise in costs as well as geopolitical matters.

“We're seeing gas prices much higher compared to the same oil prices than we saw the last time they were at this level,” said Buttigieg. “And I think that needs to be looked into, there are incredible profits being made. Not everybody is as upset as most Americans are about these gas prices that we're seeing at the pump.”

Kildee says the federal government does not set gas prices and the Biden administration is focused and trying to reduce the price of gas.

"I do support a pause and the gas tax, especially if it's in tandem with the state pause,” said Kildee. “But there are other things that we've suggested, and the President has taken up. For example, the President now allows year-round use of a higher blend of ethanol that can reduce the price at the pump right away has increased its supply by releasing more into our reserves."

Forced Switching Policy

The policy known as “forced switching” is one of the most highly contested debates in rail industry.

The Biden administration has been putting pressure on the federal regulatory group known as the Surface Transportation Board to enforce the forced switching policy.

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Rick Brewer
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WCMU File
Lake State Railway serves businesses in Bay City, Midland, Alpena and Gaylord among others.

This would primarily impact class-one railroad companies, which are the largest railroad companies in the U.S.

Currently, private companies negotiate when a rail car is handed off to another company to transports goods.

The Biden administration wants the Surface Transportation Board to regulate these switches, claiming they will speed of bottle-necked supply chains.

The Association of American Railroads is against the policy.

During the press conference, WCMU asked Buttigieg if the federal investments in America’s railroads included in the infrastructure bill changes the Biden administration's stance on the forced switching policy of rail cars.

“I think we still have to make sure that we maximize competitiveness in our rail industry,” Buttigieg said about the proposed forced switching policy. “We're making investments in infrastructure for the long term. But the STB (Surface Transportation Board) has an important role to play holding, especially these class-one railroads, accountable and we want them to succeed. But we need them to do the right thing. And that's going to be an ongoing conversation, I think at the Surface Transportation Board.”

Editor's note: WCMU originally reported that Lake State Railway was receiving $15 million in grants as part of the infrastructure bill. The company received those funds in 2019.

Rick joined WCMU as a general assignment reporter in March 2022.