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[quote user="gabe"] (1)  Your second point is, by far, the most persuasive.  However, I think there are just too many unknowns to rely upon that.  Might midwestern coal offset some of this demand?  I know there is talk about two or three new mines going in in Souther Illinois and Indiana.  Might the EPA start taking steriods and insist upon natural gas for new plants? [/quote] Natural gas?  They tried that in the 1990's, aka natural gas powered generation.  Almost killed the industrial natural gas customer base here in the US.  Natural gas prices have tripled since that ill-fated decision.  Last time I looked, we import almost as much of our natural gas from foreign sources as our petroleum, albeit Canada.  It's bad enough we let our transportation sector become hostage to foreign political manipulation, we cannot let that happen to our electric generation sector. We got coal.  We got nuclear.  Let the EPA do to itself what it has tried to do to our industrial economy for a change. [quote] (2)  A land grant is more of a public benefit, because it causes an unsettled area of land to be injected with commerce.  My whole problem with DME funding is the lack of an obvious quid quo pro that is/has been present with other government rail funding of the private sector--like land grants.  Also, as I am sure you know, land grants came with strings attached. [/quote] I agree.  Still, a grant has more financing benefits than loans, and portends a more secure future.  Most financially strapped college grads know what I'm talking about. [quote] (3)  I think even shippers agree that too much competition is not good for the rail industry, as it can kill it like it almost did in the 70s.  If the DME line goes in, where do you think UP and BNSF has the most incentive to put future investment, in an over-saturated coal market that they already have determined to be less worthy of investment than intermodal or intermodal?  My bet is DME will further push UP and BNSF into betting on China rather than acid rain. [/quote] Wait a minute!  Why do you allege that "too much competition" was the rail industry problem of the 1970's?  Railroads have never had "too much competition", rather they've been hamstrung by the inherent inefficiencies of the integrated model.  All railroads pretty much have owned their own little fiefdoms aka what economists call the "natural monopoly" wherein the owner of the track is the sole operator of the trains.  It is the inherent abuses of the integrated model that led to the over regulation of the industry, as governments do tend to try and counter the lack of true free market actions.  Railroads lost business because there was virtually no online competition - businesses tend to locate and grow where inputs are competitively priced.  The advent of public highway construction was in part the result of dissatisfaction with the integrated railroad model.  And these highways were not competition per se for railroads, rather businesses changed their practices to conform to the freer auspices of highway freight transportation despite the greater theorectical efficiencies of rail technology. The real history of US railroads aside, what we have now is a horrible lack of intramodal competition among railroads.  Adding another PRB competitor isn't going to change that lack all that much, but it's a start. [quote] (4)  What makes you think that the DME route isn't alligned on 19th century engineering?  My understanding that only roughly 200 miles of the proposed expansion will be new alignment. [/quote] That's 200 miles more than what UP and BNSF can offer. [quote] (5)  There is a heck of a difference between a retroactive bail out than a pro-active expentiture of public funds to help a specific entity rather than the public at large. [/quote] In a way, the loan gaurantee is similar to retroactivity, since it only kicks in if the private loans default.  The initial action requires no federal expenditure. [quote] (6)  I agree with you about the Ag industry.  But, due to the role of the farmer in American lore, that has always been an exception to general practices in America.  I am not saying I agree with it, but I don't know that it will ever be changed. [/quote] As I pointed out above, we've made a huge mistake in allowing our transportation sector to become dependent on foreign sources of oil.  We absolutely cannot allow our food production to also become so dependent.
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