CANADIAN SULFUR. Sulfur is being loaded for shipment at Jefferson Lake's Calgary, Alta., gas field. Canada shipped 300,000 tons of sulfur to the U.S. last year
Midwest Sulfur Battle Heads for ICC Outcome of battle between U.S. and Canadian sulfur producers may well depend on freight rate decision The struggle between U.S. and Canadian sulfur producers for the big midwestern sulfur market may be coming to a head. This October, the Interstate Commerce Commission will conduct hearings on freight rates for hauling sulfur from Alberta, Canada, to East St. Louis, 111., and several other mid western receiving points. Also coming up soon should be an ICC decision on the freight rates, now suspended, from Alberta to Streator, 111. At stake is who will dominate in a marketing area which annually consumes about 800,000 tons of sulfur. This amount is equivalent to more than 15% of U.S. Frasch sulfur production and 80% of last year's Canadian output of sulfur. Nearly all of Canadian sulfur is recovered from sour natural gas. The freight rate hassle isn't new. It began in 1960 when railroads hauling Canadian sulfur from Alberta began setting new and lower rates to receiving points in Wisconsin and Minnesota. Later, lower rates were established for Chicago and eventually for several other receiving points in Illinois, Iowa, Michigan, and Indiana. Several of the rates were contested, some were suspended by ICC, and some were withdrawn voluntarily by the railroads. 26
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1963
Gulf Coast sulfur producers are the principal opponents of the low rail rates on Canadian sulfur. Freeport Sulphur and Texas Gulf Sulphur, in particular, believe the rates are unnecessarily low. (TGS, incidentally, also produces in Canada. ) These two companies have had the bulk of the Midwest sulfur market and can see their share of the market dwindling as more Canadian sulfur rolls in. Opponents claim the Canadian rail rates are not compensatory to the railroads. They believe the rates are "missionary" in nature and will be raised once the Canadian sulfur producers have invested heavily in transportation equipment. They also claim that the rates will disrupt the entire rate structure on sulfur shipments and aren't necessary for Canadian sulfur to compete in the Midwest. Chief spokesman for the Canadian freight rates is the Soo Line Railroad, over whose line most of the Canadian sulfur travels and whose Canadian parent, Canadian Pacific, originates much of the shipments. A host of other railroads and Canadian sulfur producers such as Standard Oil Co. of California, Shell, Jefferson Lake Sulphur (which also produces sulfur on the Gulf Coast), and British American have also been, or will be, involved.
The Soo Line believes its rates are necessary for Canadian sulfur to compete in Midwest markets. It also maintains that the rates are permanent, not "missionary" in nature. The Soo Line says the rates will help it to guard against future competition, meaning the possibility that Canadian sufur may eventually move to market through pipelines. Industry observers completely discount the possibility of pipeline transportation of sulfur. Shipping More. The outcome of ICC's hearing and investigation is difficult to predict. One thing, however, is certain. Canadian sulfur coming into the U.S. has been increasing markedly. In 1959, U.S. imports of Canadian sulfur were only 19,500 tons. This grew to 183,000 by 1961 and leaped to almost 300,000 tons last year. Within two years, Canadians estimate, 1 million tons of their sulfur will be shipped into the U.S. each year. The growth of Canadian sulfur production has been equally impressive. In 1959, Canada produced only 250,000 tons of sulfur. In 1962, production soared to 1 million tons. Output of Canadian sulfur should reach 1.2 million tons this year, up 20% over last year's level.
