Proposed Coal Expansion

DM&E’s proposed expansion to Wyoming’s Powder River Basin (PRB) is all about coal. DM&E envisions converting its agricultural line into a virtual coal conveyor belt from PRB coal mines to power plants to the east.

The proposed PRB expansion project involves building:

• A 262-mile main line from Wall, S.D., to the PRB in Wyoming.
• 17.3 miles of mine loop tracks to access seven coal mines.
• A separate line through Mankato on Union Pacific right-of-way or a 13.3-mile bypass around Mankato.

The Canadian Pacific Railway (CP) says it will not decide whether to proceed with the PRB project until after the federal Surface Transportation Board rules in September 2008 on CP’s purchase of DM&E. Meanwhile, DM&E continues to push aggressively to build the PRB extension, which has raised controversy on three primary fronts:

1. DM&E’s land grab. DM&E is seeking eminent domain authority to take land for the route from more than 130 owners. Mostly ranchers, the land owners don’t want to sell and don’t want coal unit trains rumbling across property that is both their business and their home.

2. Environmental issues. Building the PRB extension would gouge a 29,000-acre swath of destruction, damaging water resources, wildlife habitats, recreation areas, and scenery in natural areas in South Dakota and Wyoming. In addition, the PRB project is dedicated to sustaining coal-fired energy, a major source of pollutants that contribute to global warming.

3. Train traffic. DM&E hopes to carry 125 million tons of coal per year. That translates to 43 trains a day, half eastbound filled with coal and half westbound returning empty, along the PRB extension and the existing main line.

More than 10 years after first announcing its coal-hauling plan, DM&E has little to show:

• No access agreements with any coal mines.
• No coal supply contracts with any customers.
• Only two parcels of property (as of Oct. 5, 2007) out of all the land needed for over 280 miles of proposed new track.
• No required Section 404 federal Clean Water Act permits from the U.S. Army Corps of Engineers for Wyoming, South Dakota or Minnesota.
• No compliance with the cultural resources site surveys and evaluation mandates of Section 106 of the National Historic Preservation Act – even for the land where it has had access.     

DM&E remains determined to cash in on the lucrative PRB coal market, now served only by Union Pacific and Burlington Northern Santa Fe. CP agreed to pay DM&E shareholders up to $1.07 billion in incentives tied to the PRB project beginning and achieving targets for the annual volume of coal shipments.