"The land is the only thing in the world worth working for, worth fighting for, worth dying for, because it's the only thing that lasts "
- Margaret Mitchell
Gone With the Wind
As stated in the last posting, I personally don't believe Frank Patton's business plan is real. I don't believe the real intention of creating Great Lakes Basin Transportation llc is to be an interchange between railroads outside of Chicago. I believe the risks of such a business plan are too high for any reasonable business man or bank to accept. Just as people speculate about stocks and corporations all the time, so is this speculation. There are forums all across the internet where people state there speculations about corporate strategies and stock prices. This opinion is no different, except the company is an eight billion dollar speculation project seeking eminent domain with the altruistic claim of reducing congestion in Chicago, but still a company no experience in rail.
There are only 7 major railroads in North America. It's a short list of companies who could profit from this project. Next, Union Pacific has already stated to the Chicago Tribune they have no interest in this project.
Burlington Northern SantaFe is owned by Berkshire Hathaway. For a variety of reason, I don't think this is Warren Buffet's style. Last I heard, Howard Buffet is taking a leadership role and I think he is a man of higher ethics whose history includes walking away from an executive job with an unethical grain company. He also knows the challenges of farming first hand. Creating a phony speculation capital company with a guy who has never worked in rail to obtain an easement through eminent domain isn't his style. I don't see his company attempting such a stunt.
Like UP & BNSF, Norfolk Southern and CSX have shown no ambitious signs of aggressive expansion. Also, like UP & BNSF, these railroads end at Chicago. If anything, Norfolk Southern and CSX are being pursued for expansion.
Canadian National already owns the Illinois Central tracks heading south from Chicago. They do have tracks into Chicago and out of Chicago. A few years ago CN bought the tracks of the EJ&E from US Steel for 300 million dollars. That became Canadian National's Chicago bypass and CN's contribution to CREATE and relieving Chicago congestion issues.
The process of elimination leaves Canadian Pacific Railway with CEO Hunter Harrison and backed by privately owned New York City hedge fund Pershing Square managed by Bill Ackman. When Canadian Pacific is referred belong, it also includes the investors in the privately held hedge fund. Frank Patton claims to have private ate investors, perhaps there is a good chance those investors are also the investors that brought Hunter Harrison to CP.
It's not difficult to make the speculation Canadian Pacific (or related investors) is the funding behind Great Lakes Basin Transportation llc. Currently there is only one railroad making waves in the rail industry with the purposed buyout of Norfolk Southern at 28 billion.
When TransCanada was denied a permit to build their Keystone XL pipeline, it created a vacuum in the oil transporting industry for future expansion. It is conceivable CEO Hunter Harrison sees an opportunity. Unfortunately for him, any company with the name "Canada" and associated with the transportation of oil sands isn't too popular in the Midwest at the moment. Who would have guessed a bunch of Nebraska farmers could stop a pipeline traveling from the Canadian border to the Gulf of Mexico?
If Canadian Pacific is funding this limited liability corporation, it’s understandable they would want to keep their name in hiding until the last minute. We see that game played at the local level with zoning boards with company names not disclosed until it's a "done deal". If Canadian Pacific is behind GLB, the negative press would likely be huge.
Personally I have nothing against oil sands, tar sands, or how it is extracted from the ground. I am not opposed to an open conversation on how oil from Canada should be best transported into the States. Economically priced energy is a good thing. Today oil is at $36.01 a barrel and at that price extracting oil from tar sands isn't profitable. Cheap oil is good. An abundant supply is a good thing. It is what keeps North American manufacturing competitive in the world market.
However, farmers and landowners just deserve a fair compensation for what they own, and I oppose the abuses of eminent domain while corporations get rich off the toil and investments of someone else's property. We don't have eminent domain because oil is under the ground. We don't exercise eminent domain for the sake of wind energy corporations. We don't need eminent domain for the benefit of transporting more and more oil, especially for an export market.
It would make sense for Canadian Pacific to seek a bypass around Chicagoland. CP only has 5% of the real traffic through Chicago. Like the other railroads, CP's line terminates in Chicago and goes no further. Unusual as it sounds, CP, the sixth largest railroad has made an offer to buy Norfolk Southern, the third largest railroad, for 28 billion dollars. Hunter Harrison has some ambitious dreams to be a true transcontinental railroad. With CP's offer to buy Norfolk Southern, Canadian Pacific would almost have a direct route from the tar sands of Alberta Canada to refineries on the east coast or even the export terminals down the east coast. There is just one problem.
As Norfolk Southern points out in their official response to Canadian Pacific's buyout offer, Canadian Pacific and Norfolk Southern tracks do not connect in Chicago! The Indiana Harbor Belt, a shortline railroad, connects and interchanges cars between these two railroads. For Canadian Pacific to be a true transcontinental railroad, they need a bypass around the Chicago interchange. Canadian Pacific needs a Great Lakes Basin Transportation llc to go around Chicago.
Here is what Norfolk Southern has to say about the proposed merger with Canadian Pacific and its impact on Chicago congestion.
“Not only do the lines of Canadian Pacific and Norfolk Southern not physically connect in Chicago, but neither company's traffic can be moved to other Canadian Pacific-Norfolk Southern connecting points without all constituencies incurring substantial extra miles, cost and time.”
Combining Canadian Pacific with Norfolk Southern and a bypass around Chicago would effectively make Canadian Pacific the Keystone Railway. The only way for the two railroads to join together is through a new link created bypassing Chicago and connecting the two halves. Who is to say this proposed merchant toll rail model wouldn't change to a basic limited access asset of Canadian Pacific once this project was complete?
It wouldn't be surprising if in the Great Lakes Basin Transportation llc nondisclosure agreement with its investors there is already an option to sell GLB to the investor should the easement be obtained. If this land through Wisconsin, Illinois, and Indiana is the link for a transcontinental Canadian, think about the true value of these properties. $22,000 an acre for the easement would be the railroad swindle of the century. Without this link a CP/NS railroad is basically two disjointed regional railroads. With this bypass, the sum is worth far more than the two halves.
Patton is giving us no room but to speculate. From a corporate perspective, a combination Canadian Pacific, Norfolk Southern and Great Lakes Basin could be hugely busy and profitable. If Canadian Pacific is behind Great Lakes Basin Transportation llc combined with the acquisition of Norfolk Southern, Canadian Pacific would become a huge player dominating the rail industry. It would put CP right up there eye to eye with UP and BNSF.
If this is the true GLB business plan, Frank Patton is asking Illinois farmers to sacrifice in order to make Canadian Pacific a true transcontinental railroad and corporate profits. It is understandable for a "nondisclosure agreement" story line. The value of the land acquisition for a Chicago bypass would go through the roof and this is small potatoes to the potential value of a Norfolk Southern buyout.
Frank Patton it's time the investors come out of the closet. Nothing good can come from this speculation about who is funding the Great Lakes Basin Transportation llc. Landowners have a right to know who they are becoming vested partners with their land. If the land through Northern Illinois is a missing link to a Canadian Pacific Transcontinental Railroad, the value of their property is closer to $75,000 an acre than what GBL is proposing.
Maybe reporters should be asking this question.
Recognizing Frank Patton's vast rail baron experience is as extensive and comparable to Hillary Clinton's ability to trade cattle futures, would he recommend we poor peasant farmers in norther Illinois buy stocks in Canadian Pacific, Norfolk Southern, or both?
In theory that question has nothing to do with the ownership of Great Lakes Basin Transportation llc and not specifically covered in a nondisclosure agreement.
So, who is funding GLB? There is only one railroad with dreams of being a transcontinental. It's the small dog with the CEO who has big dreams. Are those private investors in GLB invested in Canadian Pacific also? Basic farmer economic says this scheme is worth more as a link between CP&NS than another interchange to supplement Chicago.
|Purposed Great Lake Basin Route|
|Canadian Pacific Route|
|Norfolk Southern Routes|