Business
Disasters happen when companies put profits ahead of people

My heart beats for the people of East Palestine, Ohio. Their world was turned upside down last month when 11 Norfolk Southern Railway carriages carrying dangerous chemicals ran off the tracks. A controlled vent created a toxic gas cloud that threatened the health and safety of 4,700 residents.
Last week, the Bipartisan Railway Safety Act of 2023 was introduced in the House and Senate to require the US Secretary of Transportation to revise the definition of a “highly hazardous combustible train” to include any train with at least one car carrying combustible materials .
This federal legislation would also impose a minimum inspection time for rail vehicles and require a minimum crew of two. Rail companies would have to notify government emergency systems when hazardous materials are being transported, provide train workers with training on toxic materials, and develop contingency plans. Detectors alerting crew to overheating bearings would also be improved, and maximum penalties for safety violations would be increased.
The EPA has ordered Norfolk Southern to pay for the cleanup costs. Earlier this year, the company announced record earnings in 2022, along with a “bold” new strategic plan to create long-term shareholder value. But Norfolk Southern’s accident rate has also risen over the past four years, according to a Jan. 23 earnings call presentation.
It is too late for the East Palestinian community to benefit from these reforms, and its residents must worry about the long-term health consequences of contaminated soil and water. But passage of this law could save other small, rural communities from a similar nightmare.
Across the industry, the adoption of Precision Scheduled Railroading (PSR) has eliminated nearly a third of all rail jobs over the past six years. A 25% increase in average train length since 2008 has also raised alarm. Railway union members almost went on strike last year to protest working conditions.
The derailment was not an isolated catastrophe
Iowans should not dismiss what happened in East Palestine, Ohio as an isolated catastrophe. It is part of a pattern of US companies and corporations shifting the cost of doing business to Americans.
Pollution is a major external cost. In Marengo, Iowa, on December 8, C6-Zero, a shingle recycling plant, exploded. A portion of the town of 2,435 people was evacuated, and more than a dozen workers required treatment at the University of Iowa hospitals and clinics.
When first responders and rescue workers arrived at the scene, they had no idea what hazardous chemicals were at the facility. That’s because C6-Zero had refused to provide that list to the state of Iowa for the past 19 months. Instead, it has been argued that it is exempt from permit requirements because it is not a recycling facility.
The fire, less than a mile from the Iowa River, contaminated the ground and created large runoff pools of contaminated water. The Iowa Department of Natural Resources was denied access to the facility until February.
The cleanup is finally underway after C6-Zero allocated funds to government-contracted cleanup companies. But there will be a big scar in this community. The Iowa DNR had been informed that the facility’s owner was facing extradition to Texas for illegal clapboard disposal and that the company was experiencing problems at its Colorado site. However, C6-Zero has been allowed to operate in Iowa without a proper permit and has outsourced its risks and costs of doing business to the people of the Marengo community.
Carbon capture pipelines
One argument in favor of building the Dakota Access Pipeline through Iowa, allowing a private company to harness the energy of a significant area, was that it would be safer than rail to transport crude oil from North Dakota’s shale wells. (However, the pipeline connects to an oil-by-rail hub in Patoka, Illinois, also owned by Energy Transfer Partners.) The Iowa Utilities Board agreed that road safety was a “public benefit” that outweighed the potential risks future pipeline leaks, damage to topsoil and the taking of land from farmers.
A major debate currently underway in the current Iowa legislature is the construction of underground pipelines, primarily ethanol plants, to capture, transport and permanently store CO2, a colorless, odorless and non-flammable gas that creates a cloud that is hazardous to health can form. Farmers and landowners are once again trying to convince Iowa lawmakers to protect their topsoil, their tiles, and their long-term farming investments. Rural residents also express concerns that their communities would be vulnerable in the event of a carbon pipeline leak.
This risk is not small. In 2020, more than 200 people were evacuated and 50 people received medical treatment in Satartia, Mississippi, as a result of a leak in a liquid coal pipeline. None of the sheriff’s deputies or volunteer firefighters had emergency CO2 leak training.
The Pipeline and Hazardous Materials Safety Administration, which reports to the U.S. Department of Transportation, imposed the largest fine ever: $3,866,734. Its report said the company underestimated the potential size of the affected area and delayed notifying officials.
The new rules are encouraging, according to the nonprofit advocacy group Pipeline Safety Trust, but those regulations won’t be written before some of the companies plan to start construction across 681 miles in Iowa.
Currently, the US has 5,000 miles of carbon dioxide pipelines, most of which are for enhanced oil recovery. It is estimated that between 30,000 and 65,000 miles of pipeline would be needed to combat climate change. Iowans living along these pipelines, as well as the emergency rescue and fire personnel (many volunteer) would be exposed to these risks. Business owners and shareholders will reap the tax credits and move on before the actual feasibility of carbon storage is determined.
past is prologue
Iowa has a long history of allowing livestock operations to outsource their business expenses. Industrial-scale operations began doing this in the 1980s and continue to this day. Many local, small, sustainable pig producers have been forced to abandon pig farming in the name of “efficiency”. The primary rationale is to reduce food costs for consumers.
The CEO of Summit Carbon’s parent company has been at the forefront of the consolidation of Iowa’s swine industry. He then sold his business and switched to ethanol. Iowa’s waterways and residents living alongside the smells of these restrictions have had to suffer the effects. Nonetheless, Iowa legislatures passed legislation to limit the ability of neighboring property owners to successfully sue. In 2017, the Iowa DNR conducted a satellite study of animal restrictions and uncovered an additional 5,000 operations. Many had never applied for a building permit.
Climate change is perhaps the most egregious example of what can happen when profits come before people and the costs of doing business are externalized. Most of the climate impacts that Americans and others around the world are enduring today are being inflicted in the name of capitalism. Businesses argue that protecting lives, health, the water people drink and the air they breathe is simply too costly.
Unfortunately, a relentless pursuit of efficiency has allowed almost all other considerations to be overridden. Granted, practices or systems like Precision Scheduled Railroading or longer, heavier trains may be more efficient, but that doesn’t mean they’re in the national interest. We are told that the government should avoid the markets. Still, in a democracy, government and elected officials should be in a better position to judge what is in the national interest than corporations or markets.
Left to their own devices, companies will pursue their own interests, denying evidence of adverse effects and fighting regulations that mandate air brakes or use more powerful tank cars on trains carrying dangerous chemicals. That’s why we need child labor laws and workers’ compensation insurance.
Unfortunately, what we see in Iowa today is that many elected officials are working hand and hand to prioritize corporations (and the private sector) over people. Tax money is being siphoned off to privatize education. Private property, a fundamental value in a capitalist system, will almost certainly be sacrificed for a liquid carbon dioxide pipeline built by a private company. Businesses like the one in Marengo are allowed to flout government regulations designed to protect people’s health and safety.
After all, capitalism is an economic system of markets. But the US is not simply a nation of markets that exist regardless of the reality of their economic impact on humanity. We are a nation of people and we need a well-regulated capitalist system. Local, state and national officials should ensure that businesses and people do not pollute the water, soil and air. Government power must be used to offset the corporate surplus.
In fact, President Biden is likely to use one of his first vetoes to allow pension fund advisors to make ESG (environment, social and governance) investing. This Labor Department rule would reverse a Trump-era rule that required advisors to consider only the highest returns. Republicans describe it as “awakened capitalism.” 25 states, including Iowa, are calling for the rule to be barred.
I’m just asking: Why shouldn’t consultants be allowed to consider the risks of climate change, fair pay or gender diversity? Why should misbehaving companies that disregard rules and laws, or good governance, not face the consequences? For the greater good of this country and the state of Iowa, it is time to balance our individual and collective interests. As John Stuart Mill wrote in his essay on liberty: “The only purpose for which power can lawfully be exercised against a member of a civilized community against his will is to prevent harm to others.
This article first appeared on Cheryl Tevis’ blog Unfinished Business and is republished here via the Iowa Writers’ Collaborative.
Editor’s Note: Please consider subscribing to the collaboration and its member authors to support their work.