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Energy, Powder River Basin, and the DM&E

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Posted by Anonymous on Sunday, April 22, 2007 11:41 PM
 Murphy Siding wrote:
 futuremodal wrote:

It should be worth noting that the ex-Milwaukee grade is railbanked by the State, according to their DOT website. 

The tracks are even still there past Murphy Siding.Wink [;)]  However, there have been buildings and hiways built on top of the ROW east of Rapid City.

Hmmmmm......Perhaps some eco-schmoe is contemplatin' a new biofuels facility there at Murphy Siding?

I did as you suggested and copied some topo maps of the Rapid City to Colony territory.  It looks as if there might be a short but significant grade east out of Rapid City, one that seems to cross a lot of side streets, but it's one that could be avoided with a northern bypass around Rapid City via Box Elder Creek.  Other than that there doesn't look to be any areas of concern should rail traffic increase on that line.  The line skirts Sturgis to the west, and there may be a short up and down segment between Sturgis and Whitewood.

So if the Northern Option involved only 100 or so miles of new trackage compared to the Southern option's 200 or so, even a Rapid City bypass only adds about 10 more miles of new track construction.  Kevin and the gang would still have been able to cut a cool billion or so from the loan request, and probably would have the money in hand even as we speak.

The Southern route, although water level grade and giving the closest connection to the eastern power plants, may end up having been The Big Mistake.

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Posted by Murphy Siding on Sunday, April 22, 2007 6:56 PM
 futuremodal wrote:

It should be worth noting that the ex-Milwaukee grade is railbanked by the State, according to their DOT website. 

The tracks are even still there past Murphy Siding.Wink [;)]  However, there have been buildings and hiways built on top of the ROW east of Rapid City.

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Posted by Anonymous on Sunday, April 22, 2007 5:42 PM

Been through there a few times, though always via US 16 through the Black Hills, never via I-90 and Sturgis.  What I do remember is that the ex-Milwaukee grade east out of town seemed to follow a gulch, while the ex-CNW went east via a more northerly route.  Didn't really get a chance to eyeball grades and curves. 

It should be worth noting that the ex-Milwaukee grade is railbanked by the State, according to their DOT website.  If indeed the current DM&E grade east out of town is unsatisfactory, perhaps they can get the State in on transfering rails to the better grade at least as far as the Cheyenne River valley where the new PRB grade is supposed to run from Wasta south.

I did a little research and came up with some statements regarding DM&E's original set of route alternatives into the PRB.  There was the North Alternative, the Middle Alternative, and the South Alternative.  I have no idea how a Middle Alternative was supposed to work (any abandoned grades straight west of Rapid City?), but the North Alternative did as I expected - Start at Colony and head SW via the Bella Fourche River valley down to Gillette, then south parallel to the Orin Line to the premo mines.  As stated in this news item from the era.....

http://www.visi.com/~mfrahm/dme/news/southern.html

....the Northern route did have the advantage of less new construction, but also would have been somewhat handicapped by a longer overall routing for the coal trains east.  No mention of the grade profile to suggest adverse operating conditions on the Northern route, but that doesn't mean such conditions didn't/don't exist.  The Southern route, the one ultimately chosen by DM&E, involved twice as much new trackage but would incorporate a shorter overall route east and does follow a watercourse out of the PRB past RC until Wasta grade.

My oh my!  I wonder if, given that the Northern route involved less new construction, that perhaps DM&E made a mistake in opting for the Southern over the Northern PRB route?  If indeed the Northern route ended up costing less, say a billion or two less than the Southern route, would DM&E have managed to request a smaller FRA loan, perhaps one that would have been accepted?

Sigh [sigh]

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Posted by Murphy Siding on Sunday, April 22, 2007 4:23 PM
 futuremodal wrote:
 Murphy Siding wrote:
 futuremodal wrote:
 nanaimo73 wrote:
 futuremodal wrote:

 When I speak of Colony as being a more apt starting point for a PRB extension, I mean it is half as close to the Gillette area as that southern option.  And the Belle Fourche river flows northeast from the Gillette coalfields to Colony, so there's your water level grade.  But perhaps more important, the untouched Montana PRB fields are a hop skip and jump away from Colony, so there's the possibility of using Colony as a jumping point for two coal road extensions.

Somehow I don't believe Rapid City is going to allow unit trains through their city, just like Rochester.

How dare you compare the good citizens of Rapid City with those Roachies!Wink [;)]

Seriously, why do you think the level of opposition would be comparable?  There is no Mayo monster dominating Rapid City, indeed Rapid City's economy is very much dependent on natural resources.

I feel that there wouldn't be any more opposition to coal trains through Rapid City than there is with coal trains through Gillette. 

Ok seriously- I grew up in Rapid City.  There is no dependence on natural resources.  There are basically two industies: tourism, and Ellsworth Air Force Base, and not much else.  Take a look on Google Earth at Rapid City.  The topography and the rail lines would be every bit as tricky as in Rochester.  I wouldn't be surprised that a coal train might need a helper just to get out of town going east.  Westbound is probably not much better.  The citizens would be every bit as against it as Rochester is.

Okay, seriously now.......

  1. I know that many burgs across the country count tourism as an "industry", but seriously it's not.  Waiting tables and selling trinkets is simply the lowest form of economic prostitution, barely able to eke out an income level slightly above the official poverty line.
  2. That being said, the tourism is taking place in the Black Hills, not necessarily in Rapid City.

Rapid City is still the center of the timber, ranching, and ag industries of Western SD, SE Montana, and NE Wyoming,

Interesting perspective from someone who's never lived there.  Have you ever been there?  There's a reason I don't live there anymore.  Why did CNW not cash in on all that business?

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Posted by Anonymous on Sunday, April 22, 2007 4:12 PM
 Murphy Siding wrote:
 futuremodal wrote:
 nanaimo73 wrote:
 futuremodal wrote:

 When I speak of Colony as being a more apt starting point for a PRB extension, I mean it is half as close to the Gillette area as that southern option.  And the Belle Fourche river flows northeast from the Gillette coalfields to Colony, so there's your water level grade.  But perhaps more important, the untouched Montana PRB fields are a hop skip and jump away from Colony, so there's the possibility of using Colony as a jumping point for two coal road extensions.

Somehow I don't believe Rapid City is going to allow unit trains through their city, just like Rochester.

How dare you compare the good citizens of Rapid City with those Roachies!Wink [;)]

Seriously, why do you think the level of opposition would be comparable?  There is no Mayo monster dominating Rapid City, indeed Rapid City's economy is very much dependent on natural resources.

I feel that there wouldn't be any more opposition to coal trains through Rapid City than there is with coal trains through Gillette. 

Ok seriously- I grew up in Rapid City.  There is no dependence on natural resources.  There are basically two industies: tourism, and Ellsworth Air Force Base, and not much else.  Take a look on Google Earth at Rapid City.  The topography and the rail lines would be every bit as tricky as in Rochester.  I wouldn't be surprised that a coal train might need a helper just to get out of town going east.  Westbound is probably not much better.  The citizens would be every bit as against it as Rochester is.

Okay, seriously now.......

  1. I know that many burgs across the country count tourism as an "industry", but seriously it's not.  Waiting tables and selling trinkets is simply the lowest form of economic prostitution, barely able to eke out an income level slightly above the official poverty line.
  2. That being said, the tourism is taking place in the Black Hills, not necessarily in Rapid City.

To equate the mentality of Rapid City with that of Rochester is simply absurd.  The Mayo Clinic is Rochester, it pays medical industry wages, it carries great political mojo.  Frankly, the denizens of Rochester could care less about what goes on around them, aka the normally aspirated ag base of southern Minnesota.  So when DM&E comes along and tries to sell the job creation prospects, Rochester says no thank you we already got a high paying wage base here.

Rapid City is still the center of the timber, ranching, and ag industries of Western SD, SE Montana, and NE Wyoming, and they all would intuitively support an improved rail service spectrum.  Those who try to eke by on tourism dollars are not going to turn down higher paying industrial jobs if given the chance.  The average household income around Rapid City is under $40,000.  Sounds to me they could use a few more union scale jobs out there.  DM&E did open a small factory directly related to the PRB expansion project, and I didn't see any news items about how Rapid City folks were protesting that investment.  Even the presence of the Air Base would seem to favor improved rail transportation - Fairchild AFB west of Spokane has taken an active part in improving rail service.

Since I mention Spokane, I will say that the attitudes toward heavy haul railroads would be indentical for Spokane and Rapid City - not 100% adoration necessarily, but neither full fledged opposition.  Certainly nothing like Rochester.

That being said, I too have some questions about the profile of the rail lines in and out of Rapid City toward Wall and Colony.  Is it a question of 2.2% grades needing helpers, or is it simply a case of an up and down profile that just needs one to pay attention while driving a train?  Is it comparable to Crawford Notch through which BNSF coal trains run day and night?  Do you have a profile map or chart that you could share?

Actually, the bigger concern would be from Sturgis.  24(?) coal trains a day + 500,000 bikers for the Sturgis Ralleye for the first 2 weeks of August each year=disaster.Dead [xx(]

So DM&E takes that two weeks for annual maintenance.  Big deal!

I didn't know straw men rode Harley's!Wink [;)]

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Posted by Murphy Siding on Sunday, April 22, 2007 2:10 PM
 futuremodal wrote:
 nanaimo73 wrote:
 futuremodal wrote:

 When I speak of Colony as being a more apt starting point for a PRB extension, I mean it is half as close to the Gillette area as that southern option.  And the Belle Fourche river flows northeast from the Gillette coalfields to Colony, so there's your water level grade.  But perhaps more important, the untouched Montana PRB fields are a hop skip and jump away from Colony, so there's the possibility of using Colony as a jumping point for two coal road extensions.

Somehow I don't believe Rapid City is going to allow unit trains through their city, just like Rochester.

How dare you compare the good citizens of Rapid City with those Roachies!Wink [;)]

Seriously, why do you think the level of opposition would be comparable?  There is no Mayo monster dominating Rapid City, indeed Rapid City's economy is very much dependent on natural resources.

I feel that there wouldn't be any more opposition to coal trains through Rapid City than there is with coal trains through Gillette. 

Ok seriously- I grew up in Rapid City.  There is no dependence on natural resources.  There are basically two industies: tourism, and Ellsworth Air Force Base, and not much else.  Take a look on Google Earth at Rapid City.  The topography and the rail lines would be every bit as tricky as in Rochester.  I wouldn't be surprised that a coal train might need a helper just to get out of town going east.  Westbound is probably not much better.  The citizens would be every bit as against it as Rochester is.

     Actually, the bigger concern would be from Sturgis.  24(?) coal trains a day + 500,000 bikers for the Sturgis Ralleye for the first 2 weeks of August each year=disaster.Dead [xx(]

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Posted by nanaimo73 on Sunday, April 22, 2007 1:05 PM
Isn't Rapid City now focused on tourism, and away from natural resources ?
Dale
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Posted by Anonymous on Sunday, April 22, 2007 12:44 PM
 nanaimo73 wrote:
 futuremodal wrote:

 When I speak of Colony as being a more apt starting point for a PRB extension, I mean it is half as close to the Gillette area as that southern option.  And the Belle Fourche river flows northeast from the Gillette coalfields to Colony, so there's your water level grade.  But perhaps more important, the untouched Montana PRB fields are a hop skip and jump away from Colony, so there's the possibility of using Colony as a jumping point for two coal road extensions.

Somehow I don't believe Rapid City is going to allow unit trains through their city, just like Rochester.

How dare you compare the good citizens of Rapid City with those Roachies!Wink [;)]

Seriously, why do you think the level of opposition would be comparable?  There is no Mayo monster dominating Rapid City, indeed Rapid City's economy is very much dependent on natural resources.

I feel that there wouldn't be any more opposition to coal trains through Rapid City than there is with coal trains through Gillette.  And if a new PRB extension through the Montana coalfields results in a through rail connection to Billings, that opens the door for that new Amtrak train everyone's been speculatin' about!

DME is loosing a one-front war, and you want to open a second front ?

DM&E temporarily lost the battle of sanity over idiocy.  Lightning ain't gonna strike twice.

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Posted by Murphy Siding on Sunday, April 22, 2007 9:09 AM
 futuremodal wrote:

Actually, I count about 14 ethanol plants either up and running or in planning/development...

http://www.sdcorn.org/ethanol/sdplants.cfm

Some of those are on various shortlines.  Whether those shortlines are captive to BNSF or some other Class I such as UP or CP is hard to say.  But I'll grant you that if we were keeping score, BNSF would win......(yaaawwwnnnn).....

You are correct-14.Laugh [(-D]  The bad part is, I was looking at the same map.Dunce [D)].  Aurora ia on the DM&E. Redfield might go either way, as both DM&E and BNSF go through there. Rosholt, I believe, is on a short line connected to CP.  Huron will definately be on DM&E!  Corrected score would be something like 12-2, or 11-2-1.  My point is, I don't see DM&E burning up the ethanol tonnage anywhere but in press releases.

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Posted by nanaimo73 on Sunday, April 22, 2007 12:39 AM
 futuremodal wrote:

 When I speak of Colony as being a more apt starting point for a PRB extension, I mean it is half as close to the Gillette area as that southern option.  And the Belle Fourche river flows northeast from the Gillette coalfields to Colony, so there's your water level grade.  But perhaps more important, the untouched Montana PRB fields are a hop skip and jump away from Colony, so there's the possibility of using Colony as a jumping point for two coal road extensions.

Somehow I don't believe Rapid City is going to allow unit trains through their city, just like Rochester.

DME is loosing a one-front war, and you want to open a second front ?

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Posted by Anonymous on Saturday, April 21, 2007 11:21 PM
 Murphy Siding wrote:
 futuremodal wrote:
Keep in mind, that $4 billion figure was just for an example.  I'm not sure what the total estimated cost for rehabbing the entire DM&E line from Colony to Winona was/is, but the $4 billion figure may be a bit high.

For what it's worth, here's a list of all the industries served by DM&E:

http://www.dmerail.com/PDF/DME%20INDUSTRY%20DIRECTORY.pdf

Also, it was CNW's "Cowboy Line" that was used as the access into the PRB.  What is the status of that line now?Mischief [:-,]

What is your source for the claim that most new ethanol plants in SD are being located on BNSF?  Certainly, BNSF being the main Class I line out of the state is going to get most of the rate split.

And for what it's worth, Colony is technically located in the PRB coal fields, just not the easy to get prefered coal.  There's gotta be a reason DM&E has gone to all the trouble of not only obtaining and keeping that line, but also getting an FRA loan to upgrade it.  It was surmised that Colony would be the starting point into the PRB to get at all that Montana coal just sittin' there.  Still could be if Montana's Guv threw DM&E a bone or two.........

   Well, here goes.  I've read that the PRB extention from Wall, S.D. was to cost somewhere around $2Billion.  Six minus two equals four.  That's where I'm getting that number from.  I could be all wrong.  Looking at a map, S.D. has 8 ethanol plants operating, and two in development.  The score would be 7:1, or 8:2 BNSF:DM&E, depending on how you score it.  I don't think Colony is in the Powder River coal area.  It's in the Belle Fourche River area of bentonite clay.   If the coal's there, it's so far down, that it will never see daylight.

Actually, I count about 14 ethanol plants either up and running or in planning/development...

http://www.sdcorn.org/ethanol/sdplants.cfm

Some of those are on various shortlines.  Whether those shortlines are captive to BNSF or some other Class I such as UP or CP is hard to say.  But I'll grant you that if we were keeping score, BNSF would win......(yaaawwwnnnn).....

When I speak of Colony as being a more apt starting point for a PRB extension, I mean it is half as close to the Gillette area as that southern option.  And the Belle Fourche river flows northeast from the Gillette coalfields to Colony, so there's your water level grade.  But perhaps more important, the untouched Montana PRB fields are a hop skip and jump away from Colony, so there's the possibility of using Colony as a jumping point for two coal road extensions.

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Posted by Murphy Siding on Saturday, April 21, 2007 5:52 PM
 futuremodal wrote:
Keep in mind, that $4 billion figure was just for an example.  I'm not sure what the total estimated cost for rehabbing the entire DM&E line from Colony to Winona was/is, but the $4 billion figure may be a bit high.

For what it's worth, here's a list of all the industries served by DM&E:

http://www.dmerail.com/PDF/DME%20INDUSTRY%20DIRECTORY.pdf

Also, it was CNW's "Cowboy Line" that was used as the access into the PRB.  What is the status of that line now?Mischief [:-,]

What is your source for the claim that most new ethanol plants in SD are being located on BNSF?  Certainly, BNSF being the main Class I line out of the state is going to get most of the rate split.

And for what it's worth, Colony is technically located in the PRB coal fields, just not the easy to get prefered coal.  There's gotta be a reason DM&E has gone to all the trouble of not only obtaining and keeping that line, but also getting an FRA loan to upgrade it.  It was surmised that Colony would be the starting point into the PRB to get at all that Montana coal just sittin' there.  Still could be if Montana's Guv threw DM&E a bone or two.........

   Well, here goes.  I've read that the PRB extention from Wall, S.D. was to cost somewhere around $2Billion.  Six minus two equals four.  That's where I'm getting that number from.  I could be all wrong.  Looking at a map, S.D. has 8 ethanol plants operating, and two in development.  The score would be 7:1, or 8:2 BNSF:DM&E, depending on how you score it.  I don't think Colony is in the Powder River coal area.  It's in the Belle Fourche River area of bentonite clay.   If the coal's there, it's so far down, that it will never see daylight.

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Posted by Anonymous on Saturday, April 21, 2007 1:52 PM
 Murphy Siding wrote:
 futuremodal wrote:

What Kevin Shaeffer said may have had more to do with lobbying for the loan than it does for DM&E's actual independence prospects sans a PRB entry. 

I posted the thoughts of a rail analyst twice on this thread regarding DM&E's prospects post-loan rejection.  Did you perchance actually read it?

  Why yes, I did thank you.Smile [:)]

     I still think you're looking at this with rose colored glasses, causing you to overlook a few things.

     CNW sold the track for somewhere near salvage value, I think.  It seems like before that, they were trying to abandon it.  The reasons were:traffic had declined, the trackage had deteriorated,they were losing money on the line.  Since DM&E took over, traffic has increased, but I doubt it matches the high water mark of CNW traffic on the line.  The condition of the tracks has improved, but it's still not what you'd call "good".  Being a private company, CedarAmerica doesn't say if it's a profitable line.

     Yes, there are ethanol plants being built on some DM&E lines.  How many ethanol plants would DM&E have to service, to make enough money to pay back $4 Billion ?  As a side note-in S.D., most ethanol plants seem to get built on BNSF lines.

Keep in mind, that $4 billion figure was just for an example.  I'm not sure what the total estimated cost for rehabbing the entire DM&E line from Colony to Winona was/is, but the $4 billion figure may be a bit high.

For what it's worth, here's a list of all the industries served by DM&E:

http://www.dmerail.com/PDF/DME%20INDUSTRY%20DIRECTORY.pdf

Also, it was CNW's "Cowboy Line" that was used as the access into the PRB.  What is the status of that line now?Mischief [:-,]

What is your source for the claim that most new ethanol plants in SD are being located on BNSF?  Certainly, BNSF being the main Class I line out of the state is going to get most of the rate split.

And for what it's worth, Colony is technically located in the PRB coal fields, just not the easy to get prefered coal.  There's gotta be a reason DM&E has gone to all the trouble of not only obtaining and keeping that line, but also getting an FRA loan to upgrade it.  It was surmised that Colony would be the starting point into the PRB to get at all that Montana coal just sittin' there.  Still could be if Montana's Guv threw DM&E a bone or two.........

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Posted by Murphy Siding on Saturday, April 21, 2007 12:56 PM
 futuremodal wrote:

What Kevin Shaeffer said may have had more to do with lobbying for the loan than it does for DM&E's actual independence prospects sans a PRB entry. 

I posted the thoughts of a rail analyst twice on this thread regarding DM&E's prospects post-loan rejection.  Did you perchance actually read it?

  Why yes, I did thank you.Smile [:)]

     I still think you're looking at this with rose colored glasses, causing you to overlook a few things.

     CNW sold the track for somewhere near salvage value, I think.  It seems like before that, they were trying to abandon it.  The reasons were:traffic had declined, the trackage had deteriorated,they were losing money on the line.  Since DM&E took over, traffic has increased, but I doubt it matches the high water mark of CNW traffic on the line.  The condition of the tracks has improved, but it's still not what you'd call "good".  Being a private company, CedarAmerica doesn't say if it's a profitable line.

     Yes, there are ethanol plants being built on some DM&E lines.  How many ethanol plants would DM&E have to service, to make enough money to pay back $4 Billion ?  As a side note-in S.D., most ethanol plants seem to get built on BNSF lines.

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Posted by Anonymous on Saturday, April 21, 2007 12:22 PM
 Murphy Siding wrote:
 futuremodal wrote:

Ed, Michael, and John,

Apparently there is a misperception of something I said that has been taken the wrong way. 

Shock [:O]I fear that since you didn't mention me by name, that I must be taking your words the right way!Tongue [:P]

     I do see one major flaw in your theory.  I see the DM&E differently, I think, because I'm closer to it all.  Kevin Shaeffer has said many times, that the DM&E has to get into the PRB to survive (independantly).  Without the PRB coal, there is literally nothing on the line, now or in the future, worthy of a $4 Billion dollar investment.  There's just not going to be enough traffic, no matter how high the margins are.

What Kevin Shaeffer said may have had more to do with lobbying for the loan than it does for DM&E's actual independence prospects sans a PRB entry. 

I posted the thoughts of a rail analyst twice on this thread regarding DM&E's prospects post-loan rejection.  Did you perchance actually read it?

Regarding having CA Holdings present a PRB entry railroad under the umbrella of a separate entity than that of DM&E or IC&E, isn't that exactly how BNSF is promoting the Tongue River project?  The problem with the rejected loan application (hindsight being 20/20Wink [;)]) is that it put all the eggs in one basket. 

Hmmmmm.......perhaps if CA Holdings had proposed a type of TTX-style railroad into the basin.............let's see......what's that called again?Mischief [:-,]

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Posted by CSSHEGEWISCH on Saturday, April 21, 2007 6:54 AM
Murphy Siding's post puts the whole issue in perspective and goes a long way into explaining why C&NW sold the line in the first place.
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Posted by Murphy Siding on Saturday, April 21, 2007 6:47 AM
 futuremodal wrote:

Ed, Michael, and John,

Apparently there is a misperception of something I said that has been taken the wrong way. 

Shock [:O]I fear that since you didn't mention me by name, that I must be taking your words the right way!Tongue [:P]

     I do see one major flaw in your theory.  I see the DM&E differently, I think, because I'm closer to it all.  Kevin Shaeffer has said many times, that the DM&E has to get into the PRB to survive (independantly).  Without the PRB coal, there is literally nothing on the line, now or in the future, worthy of a $4 Billion dollar investment.  There's just not going to be enough traffic, no matter how high the margins are.

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Posted by CNW 6000 on Friday, April 20, 2007 11:54 PM
Now that's the first response with enough OT substance and no long winded gibberish that puts things into perspective, at least for me.  Maybe the PRB project would have gone better had some version of what you suggest gone into play. 

Dan

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Posted by Anonymous on Friday, April 20, 2007 7:57 PM

Ed, Michael, and John,

Apparently there is a misperception of something I said that has been taken the wrong way.  It happens sometimes, as I assume people know what I am thinking when I type a statement.  Let me make this as clear a possible, and then ya'll can hash away at it to your hearts' content:

  • DM&E came up with this idea of building a line into the PRB, and as part of the project decided the entire core line needed to be upgraded, all to the tune of $6 billion.
  • As part of that $6 billion, DM&E applied for an FRA loan of around $2 billion give or take, with the other $4 billion coming from private investment.
  • Certain NIMBY's killed the loan by complaining about coal trains passing too close to the Mayo Clinic.

So, in hindsight, perhaps DM&E would have been better served, indeed may still have a chance at......

  • Separating the core line upgrade from the PRB extension, say $4 billion for the core line upgrade and $2 billion for the PRB extension,
  • Applying for the $2 billion loan as designated for the $4 billion core line upgrade,
  • Then allowing for complete private funding of the $2 billion PRB extension.

Now, can anyone surmise what the reaction of Mayo would have been had DM&E simply designated that $2 billion loan as part of the core line upgrade, with no mention of any PRB extension in the loan application?  Hey, if it's only going to be grain trains and ethanol passing by La Clinique, what complaints would they have had?  It just seems to me that the Mayo objections were competely predicated on those awfull coal trains passing by. 

I have a gut feeling that the FRA would have had no problem approving a $2 billion loan for a DM&E core line upgrade.  Cedar American could have even made the PRB project a separate railroad entity, something it seems DM&E tried to do in the late stages without success.

Questions?  Comments?

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Posted by beaulieu on Friday, April 20, 2007 3:38 PM
 MP173 wrote:

My original point was that there might be...best we check with Gabe, Michael, or another attorney...security violations when debt is used for another purpose than what it was securitized for.  I am not sure how the debt for the railroads are mortgaged today.  Perhaps it is uncollateralized debt.

 

ed

The debt would be on all the railroads assets, not otherwise specifically securitized, i.e. everything but leased equipment and such. I think it would be hard for DM&E to do much without the whole package going through, without reaching the PRB the other traffic won't support the repayment, only once the whole line is built is it worth even half of the loan.

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Posted by MichaelSol on Friday, April 20, 2007 3:33 PM
An interesting coincidence -- just got done with an appointment on mortgage fraud. A material misrepresentation on a loan application is a violation of federal law. A misuse of funds -- application to an unstated purpose -- is fraud. An impairment of collateral -- i.e. the money goes to improvements to which the lender has no perfected interest -- is a violation of federal law, fraud, and an instant breach of the loan agreement. On a big one like this -- see RICO charges filed.
  • Member since
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Posted by MP173 on Friday, April 20, 2007 3:08 PM

My original point was that there might be...best we check with Gabe, Michael, or another attorney...security violations when debt is used for another purpose than what it was securitized for.  I am not sure how the debt for the railroads are mortgaged today.  Perhaps it is uncollateralized debt.

 

ed

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    December 2001
  • From: NW Wisconsin
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Posted by beaulieu on Friday, April 20, 2007 1:04 PM
 futuremodal wrote:

Hmmmm, could be a semantic difference of opinion here.  Because if what Ed says is true, then both BNSF and UP would have some execs behind bars.

When I refer to "shifting funds", I take as an example BNSF's own wish list.  BNSF is willing to spend it's own money (seemingly) on expanding capacity on the LA-Chicago corridor, but wants the State of Washington to pay for improvements to the BNSF lines serving Puget Sound.  To me, that's simply a case of BNSF shifting funds from the PNW to the Southwest, because if BNSF was forced to pay for it's own PNW line improvements, wouldn't that possibly reduce the amount it is paying for the SW line?

I don't think BNSF sees as much demand in the PNW, in the 2-3 year time horizon, while in the PSW, they expect to fill capacity as soon as it is available.

Dave, you might find this study of interest,

Port Study 

The study was done for the ports of LA/LB, but there are implications for all the ports, because  part of the study is what causes shippers to choose particular ports and why they ship as they do.

Dr. Leachman is a former RR manager, turned Consultant/University Professor, he also authored the book "Northwest Passage" covering the BN in Washington State. 

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  • From: The 17th hole at TPC
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Posted by n012944 on Friday, April 20, 2007 10:20 AM

 miniwyo wrote:
I just thought I would throw anoter issue in the mix here.....   What about people to work? All the good employees are already taken, and between the mines and the oil patch, most of the workers are taken. The rest of the people who sont have jobs, are people who could not pass a drug test if thier lives depended. so What I am saying, there are so many jobs open and noone to staff them.......

 

If you pay a good wage, employees will come.

 

Bert

An "expensive model collector"

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  • From: The 17th hole at TPC
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Posted by n012944 on Friday, April 20, 2007 10:19 AM
 Murphy Siding wrote:
 n012944 wrote:
 futuremodal wrote:

Well, I don't see DM&E as a Cinderella.  They are already nearly a Class I, it's the proposed PRB line that would put them over the top. 

Do you have some inside information on the DM&E that you would like to share with us?  Since the class of a railroad is decided by annual operating revenue, and the DM&E does not give out info about its finances, how do you know that it is "nearly a class 1"?

Bert

Actually, I've seen it printed in various places, that DM&E, MRL, and WC are/were all big enough to be considered a Class 1, statistically speaking.  Apparantly, they are somehow able to *opt out*(?) of the designation, as it requires a whole lot of extra accounting.  From that aspect, I would gather DM&E can *become* a Class 1 whenever they see that designation as an advantage

Fair enough

An "expensive model collector"

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Posted by miniwyo on Thursday, April 19, 2007 11:17 PM
I just thought I would throw anoter issue in the mix here.....   What about people to work? All the good employees are already taken, and between the mines and the oil patch, most of the workers are taken. The rest of the people who sont have jobs, are people who could not pass a drug test if thier lives depended. so What I am saying, there are so many jobs open and noone to staff them.......

RJ

"Something hidden, Go and find it. Go and look behind the ranges, Something lost behind the ranges. Lost and waiting for you. Go." The Explorers - Rudyard Kipling

http://sweetwater-photography.com/

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Posted by jeaton on Thursday, April 19, 2007 10:25 PM
 futuremodal wrote:
 jeaton wrote:

Futuremodal keeps perpetuating the notion that lack of proper maintenance was the exact cause the failure of the BNSF and UP to meet their contract obligations for hauling coal out of the PRB.  He conveniently ignores the fact that the problems were triggered by the unprecidented rainfall in the basin area. 

But of course you then exonerate what I said.....

 

Of course they BNSF could have done more to clean the ballast and mitigate the effct of the rains,

Which of course is exactly what I surmised in stating that maintenance was lacking...

 

but in many respects that would have been something akin to someone living in Florida owning a snowblower so as not to be late to work after a three foot snow storm.

You need to work on your analogies.  It never snows three feet in Florida.  But coal dust is always a problem on PRB trains. 

By the way, the same rains will also fall on the DME.

Perhaps DM&E would do a better job of track maintenance, seeing as how they'd probably be under the microscope for quite some time if and when they did get into the PRB.

So $200 million buys the UP/BNSF another 75 million tons capacity, whereas to get just another 100 million tons capacity, the DME has to spend $6 billion.  Hmmmm.

A bit of a misrepresentation.  The $6 billion was for the entire DM&E line from PRB to Winona, which of course would haul more than just PRB coal.   

http://www.dmerail.com/PRB%20Project.html

And of course, you ignore the consolidation issue of simlply adding additional tracks to existing corridors and the spector of having all four tracks taken out with one single incident.

Finally, it is estimated that those missed shipments by UP and BNSF cost consumers $2.6 billion per year!  Put that into your capacity calculation!Mischief [:-,]

Nice thing about coming up with grandios plans when you are sitting on the sidlines is that you don't have to put your money where your mouth is.  Interesting that futuremodal seems to ideologically opposed to feeding on the government trough, except when in his mind it is a "good cause".  Of course, competition is the sacred cow of good causes.

Another misrepresentation.  I am absolutely opposed to allowing only a select few get to feed at that trough while others do not get that right.  BNSF and UP have received the equilvalent of over $1.5 bilion in federal aid for their PRB lines.  What's good for the goose is good for the gander.  Either allow DM&E (and any other potential PRB railroad enterprises who have put their money where their mouths are) an equal amount of federal support, or force UP and BNSF to tear out all that publicly-funded trackage and make them rebuild those lines with their own money.

And we haven't even covered having UP and BNSF give back all those land grants!Mischief [:-,]

I would like to see an expansion of the regional or corridor rail passenger services perhaps with some high speed service,

 greyhounds wrote:

So, put up your money, get in the game, and build "more lines".

Big Smile [:D]

A three foot snowfall in Miami would be unprecidented, but by your logic the resident should have a snowblower.

The land acquired in the land grants wasn't worth anything until the railroads built out and would still be of little or no value in the absence of the railroad.  Unless of course, the grain and coal would be shipped out by truck.

You still only accept the idea of government money for railroads when in your mind the project is "good".  Not that the DME could actually be a player in the PRB coal for less than the $6 billion they want to spend, but suppose the split has only $2 billion just for the PRB business.  DME will get 100 million TPY, but still will be spending ten times as much the BNSF/UP is spending to get 75 million TPY.  News flash.  It doesn't make any difference whether funds are from the government or private sources, the electric consumer will pay the frieght.

I also provided a link to a story on the BN's substantial investment in equipment to to do a more efficient job of keeping the tracks in good repair.  Since there now is a precedent for the heavy rains that triggered the problem 2 years ago, neither railroad can use force majeur provisions to avoid damages for non-delivery due to a similar weather event.  Of course the by-product to that increased maintenance is a probable reduction in track caused derailments which suggest a reduced need for the DME as an alternative route for stranded coal.  Not that the DME would have much of any excess capacity to handle detours.

About the $2.5 billion in added costs to the consumer, I don't know but if there are 50 million households that paid that added cost, my share came to $4.16 2/3 a month.  Sure wish that was all the increase I have seen in my bill during the past 5 years.  I wonder-is the reliance on natural gas plants for peak power and the resulting jump in natural gas prices had anything to do with that.  You can argue that the railroads should have done something to mitigate the effects of an unprecident weather condition,  It is just as easy to argue that the utilities should have been maintaining higher stocks in order to be prepared for possible interruptions of coal deliveries.  Then, who knows for sure.  Maintaining higher safety stocks may have actually been more expensive than going to stand by fuels.  In any circumstances (at least in this state) fuel costs are a direct pass through to the consumer.  Of course the utilitie

"We have met the enemy and he is us." Pogo Possum "We have met the anemone... and he is Russ." Bucky Katt "Prediction is very difficult, especially if it's about the future." Niels Bohr, Nobel laureate in physics

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Posted by Murphy Siding on Thursday, April 19, 2007 9:38 PM
 jeaton wrote:

 

So $200 million buys the UP/BNSF another 75 million tons capacity, whereas to get just another 100 million tons capacity, the DME has to spend $6 billion.  Hmmmm.

 futuremodal wrote:

A bit of a misrepresentation.  The $6 billion was for the entire DM&E line from PRB to Winona, which of course would haul more than just PRB coal.   

http://www.dmerail.com/PRB%20Project.html

I think I would tend to agree with jeaton's point of view on this.  *Technically* the $6Billion is for the line all the way to Winona.  *Realistically, the line has to get pretty far east to be able to take the coal somewhere.  That would have to eat up a lot of the $6B.

Thanks to Chris / CopCarSS for my avatar.

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    April 2003
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Posted by Anonymous on Thursday, April 19, 2007 8:29 PM
 jeaton wrote:

Futuremodal keeps perpetuating the notion that lack of proper maintenance was the exact cause the failure of the BNSF and UP to meet their contract obligations for hauling coal out of the PRB.  He conveniently ignores the fact that the problems were triggered by the unprecidented rainfall in the basin area. 

But of course you then exonerate what I said.....

 

Of course they BNSF could have done more to clean the ballast and mitigate the effct of the rains,

Which of course is exactly what I surmised in stating that maintenance was lacking...

 

but in many respects that would have been something akin to someone living in Florida owning a snowblower so as not to be late to work after a three foot snow storm.

You need to work on your analogies.  It never snows three feet in Florida.  But coal dust is always a problem on PRB trains. 

By the way, the same rains will also fall on the DME.

Perhaps DM&E would do a better job of track maintenance, seeing as how they'd probably be under the microscope for quite some time if and when they did get into the PRB.

So $200 million buys the UP/BNSF another 75 million tons capacity, whereas to get just another 100 million tons capacity, the DME has to spend $6 billion.  Hmmmm.

A bit of a misrepresentation.  The $6 billion was for the entire DM&E line from PRB to Winona, which of course would haul more than just PRB coal.   

http://www.dmerail.com/PRB%20Project.html

And of course, you ignore the consolidation issue of simlply adding additional tracks to existing corridors and the spector of having all four tracks taken out with one single incident.

Finally, it is estimated that those missed shipments by UP and BNSF cost consumers $2.6 billion per year!  Put that into your capacity calculation!Mischief [:-,]

Nice thing about coming up with grandios plans when you are sitting on the sidlines is that you don't have to put your money where your mouth is.  Interesting that futuremodal seems to ideologically opposed to feeding on the government trough, except when in his mind it is a "good cause".  Of course, competition is the sacred cow of good causes.

Another misrepresentation.  I am absolutely opposed to allowing only a select few get to feed at that trough while others do not get that right.  BNSF and UP have received the equilvalent of over $1.5 bilion in federal aid for their PRB lines.  What's good for the goose is good for the gander.  Either allow DM&E (and any other potential PRB railroad enterprises who have put their money where their mouths are) an equal amount of federal support, or force UP and BNSF to tear out all that publicly-funded trackage and make them rebuild those lines with their own money.

And we haven't even covered having UP and BNSF give back all those land grants!Mischief [:-,]

I would like to see an expansion of the regional or corridor rail passenger services perhaps with some high speed service,

 greyhounds wrote:

So, put up your money, get in the game, and build "more lines".

Big Smile [:D]

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