Good News for DM&E

[Anonymous]

The cash is in the bag for DM&E. It is other future projects that are potentially jeopardized by the proposed cut back.

Which makes this as good a time as any to reiterate my belief that such projects should be funded via a Multimodal Trust Fund (expanded from the Highway Trust Fund) paid for with fuel taxes (or an equivalent tax per energy unit) collected from all modes. That way all modes have access to user fees to replace non-general tax funds. Of course, it would also take a recognition from this and future Administrations that there is a big difference between the federal budget and user fee funds. Thus cutbacks in federal spending should not affect user fee funds.

And it is also counterintuitive to be promoting domestic energy development on one hand, and proposing cutbacks in funding for aiding the development of domestic energy sources, which is exactly part and parcel of the DM&E saga.

Memo to Mr. Minetta: We'll need much more than just the DM&E PRB expansion to meet future domestic energy development and production quotas this Administration has set.

[nanaimo73]

QUOTE: Originally posted by CSSHEGEWISCH

Note the entry in today's (2/17) News Wire. It looks like DM&E is going to have a most difficult time in raising the money to build this line.

Perhaps DME should talk to the Vice President.
This project would bring jobs to his State. It may also reduce the need for Mideast oil in the USA, which would reduce the need for American Forces in the region after they get out of Iraq.

[CSSHEGEWISCH]

Note the entry in today's (2/17) News Wire. It looks like DM&E is going to have a most difficult time in raising the money to build this line.

[bobwilcox]

QUOTE: Originally posted by cementmixr

QUOTE: Originally posted by bobwilcox

I was at the C&NW untill 1982...

Bob:
I believe you were mentioned in a Trains a few years ago... Ed Ellis refered to a Bob Wilcox at C&NW who worked with soda-ash pricing and traffic in 1980.

Enjoy your posts here. Thanks.

Yes, I know fast Eddy. His latest project is to bring passenger trains back to La Veta Pass. I'm thinking about encouraging several friends showing up for the first run.

[Anonymous]

QUOTE: Originally posted by bobwilcox

I was at the C&NW untill 1982...

Bob:
I believe you were mentioned in a Trains a few years ago... Ed Ellis refered to a Bob Wilcox at C&NW who worked with soda-ash pricing and traffic in 1980.

Enjoy your posts here. Thanks.

[Murphy Siding]

QUOTE: Originally posted by futuremodal

90 days for the FRA approval of the 2.5 billion dollar bailout, and then ye of little faith shall be discombobulated.......

Bailout is an odd term to use.(?)

[MP173]

I think, but I am not sure, that BNSF runs PRC to Paducah for loading at the Ohio River. Please correct me if I am wrong. Also, UP seems to run some coal out of St. Louis down the former IC line, but i dont know where it goes.

If we are looking at large increases in coal consumption in the next few years, I dont have confidence our current rail infrastructure can handle it. The crap hit the fan this winter with increased natural gas prices as electric generators switched to NG due to coal shortages.

Dave, have you crunched any numbers based on fixed and variable costs as to what the DME situation looks like? What is the current cost per mile for a 115 car unit train? It just seems to me that the debt load will be considerable and a reduction in rates wont be the answer. There will have to be adequate ROI for this to work.

ed

[Anonymous]

90 days for the FRA approval of the 2.5 billion dollar bailout, and then ye of little faith shall be discombobulated.......

[CaptainChuck]

If anyone were to become interested in DM&E I think it would be CN.

[Murphy Siding]

QUOTE: Originally posted by bobwilcox

Who will buy the DM&E if they get into the Powder River Basin? They do not have the market reach to stay independant or do they serve several coal fired utilities?

You've just hit the reason that makes me doubt that DM&E will ever get into the PRB.

[bobwilcox]

I was at the C&NW untill 1982 when we planned for access to the Powder River and where we would move the coal. We looked at a rail transloads at Clinton, IA and East St. Louis, IL. Neither one ever panned out. I beleve the only significant rail/water facility moving Western Coal to N. American customers is at Duluth, MN. I would like to hear about any other facilites.

The problem at Clintion is that the Mississippi River above Alton, IL is a marginal operation since it is closed in the winter. Winona has the same problem. The extra costs for transloading and financing terminal facilities just could not be justified. Of course connecting railroads were very aware of this issue at sent their revenue needs in light of the threat posed by rail/water transfers.

[Murphy Siding]

QUOTE: Originally posted by nanaimo73

QUOTE: Originally posted by Murphy Siding

samfp1943: I am a total computer dummy. How do you access the entire article on the newswire? I can see headlines, but not the whole story. Can someone help me out? Thanks

Just click on the
TRAINS News Wire for February 15, 2006
Your arrow will turn into a hand when you are on a link.

Boy, that was easy.[:I][D)] Thanks. I guess I had been trying to find some something big and bold, that said Hey!-pu***his button dummy!

[nanaimo73]

QUOTE: Originally posted by Murphy Siding

samfp1943: I am a total computer dummy. How do you access the entire article on the newswire? I can see headlines, but not the whole story. Can someone help me out? Thanks

Just click on the
TRAINS News Wire for February 15, 2006
Your arrow will turn into a hand when you are on a link.

[Murphy Siding]

samfp1943: I am a total computer dummy. How do you access the entire article on the newswire? I can see headlines, but not the whole story. Can someone help me out? Thanks

[blhanel]

QUOTE: Originally posted by bobwilcox

Who will buy the DM&E if they get into the Powder River Basin? They do not have the market reach to stay independant or do they serve several coal fired utilities?

They'll have the capability to serve alot of them if they build the trans-load facility at Winona to load barges.

[bobwilcox]

Who will buy the DM&E if they get into the Powder River Basin? They do not have the market reach to stay independant or do they serve several coal fired utilities?

[blhanel]

Just checked the DM&E's web site, and here's their news release-

http://www.dmerail.com/News/DME%20Press%20Release%2002-15-06.pdf

[samfp1943]

QUOTE: Originally posted by Murphy Siding

Today's local newspaper headline is that DM&E wins approval of STB. Now, all they have to do is find some money, for a loan that Uncle Sam will guarantee.

Murphy; This was in the NEWSWIRE for the 15th, there has been so much interest that I thought this might be worth posting for those of you in that area.

[Cut and pasted from that TRAINS Newswire as follows]

Sam
TRAINS News Wire for February 15, 2006

Wednesday’s railroad news:
- STB grants final approval to DM&E coal line construction project
- Fund established to support photographer sued by UP
- Jacksonville's Amtrak station marks black history month
- Rhode Island plans expanded commuter rail service
- EMD names new vp of International Sales and Service

STB grants final approval to DM&E coal line construction project

WASHINGTON — The Surface Transportation Board Wednesday announced that it has issued a decision granting final approval to the Dakota, Minnesota & Eastern Railroad to construct a new 280-mile railroad into Wyoming’s Powder River Basin, subject to extensive environmental mitigation conditions. This decision completes the STB’s review of DM&E’s proposed construction project.

DM&E, headquartered in Sioux Falls, S.D., proposes to tap the coal-rich Powder River Basin of Wyoming, now served by BNSF Railway and Union Pacific, by building the new railroad from its existing east-west line near Wall, S.D., generally west into the mining area of eastern Wyoming.

DM&E is an 1,103-mile regional that in 1986 took over Chicago & North Western’s east-west secondary, mainly agricultural route between Winona, Minn., on the Mississippi River, and Rapid City, S.D., plus a handful of branches, and today is one of the largest Class II roads in the U.S. In 1996, DM&E acquired more C&NW track, from Colony, Wyo., through Rapid City to Crawford, Neb., on the BNSF coal line. DM&E also reaches Mason City, Iowa, on a line south from Owatonna, Minn.

Sister railroad Iowa, Chicago & Eastern, which connects with DM&E at Mason City, began operations in 2002 by taking over 1,400 miles of former Milwaukee Road track from Washington Corp.’s I&M Rail Link, formerly owned by Milwaukee successor Soo Line and then Soo parent Canadian Pacific.

Using IC&E, DM&E could move coal from Wyoming all the way to Chicago by rail, or presumably to a new coal-transfer point on the Mississippi River, and/or interchanges in the Midwest with other railroads. IC&E’s system is generally “Y”-shaped, linking Chicago, Kansas City, and St. Paul, with an east-west “corn line” from the river west through Mason City, feeding Into farming areas of northwestern Iowa and southwestern Minnesota.

After the STB approved the construction of DM&E’s coal line in 2002, various parties sought judicial review. The court upheld the STB with respect to all transportation issues and most of the environmental issues that were raised, but the court directed the STB give further consideration to four environmental issues: (1) the question of whether mitigation for increased horn noise is warranted; 2) the relationship between vibration and horn noise; (3) the impact of any potential increased coal usage and related air emissions from this project; and (4) assurances that the procedures to govern the historic review were in place.

The STB’s Section of Environmental Analysis (SEA) then conducted an independent analysis of the four issues remanded by the court and prepared a Supplemental Environmental Impact Statement (SEIS) setting forth its conclusions and mitigation recommendations. In its decision, the Board reviewed SEA’s supplemental environmental analysis and concurred with and adopted the SEIS. As directed by the court, the STB reweighed the merits of DM&E’s underlying proposal to reflect the results of the SEIS and concluded that, despite certain potential adverse environmental impacts, not all of which can be fully mitigated, the proposed project has demonstrated transportation benefits and would further the public interest.

Accordingly, the Board gave final approval to DM&E’s application, subject to 147 environmental mitigation conditions. The full decision can be found on the Board’s Web site, www.stb.dot.gov, under E-lilbrary, then under Decisions & Notices, beneath the date “2/15/06.”

[Anonymous]

This is GREAT news for the DM&E. I was hopeing that they where going to make it this far. This is extreamly good news for the DM&E Railroad. Congrats to DM&E. Allan.

[Murphy Siding]

Today's local newspaper headline is that DM&E wins approval of STB. Now, all they have to do is find some money, for a loan that Uncle Sam will guarantee.

[Anonymous]

I have my doubts that the DME will be able to succeded at all in the PRB. I have some reservations about the way they spend the money and if they go overbudget plus there is no online traffic that they need.

[Anonymous]

For what it's worth (cut and pasted from TRAINS newswire 01/09/06):

"Railroads struggling to keep up with coal demand

GILLETTE, Wyo. - Railroads are trying to keep up with the increasing demand for coal shipped out of Wyoming, an industry official said in an Associated Press story that appeared in the Billings (Mont.) Gazette.

As of Dec. 24, Wyoming produced an estimated 399.2 million tons of coal in 2005, including about 385.5 million in the Powder River Basin of northeast Wyoming alone, according to the U.S. Department of Energy’s Energy Information Administration (EIA). The EIA estimates that the United States will demand an additional 100 million tons of coal annually from the Powder River Basin by 2010.

Coal production increased slightly in the Powder River Basin in 2005 even though railroads were unable to fully restore capacity on a triple-track main line that was damaged in the spring. Union Pacific and BNSF were able to ship about 85 percent of scheduled coal trains on Wyoming's main coal export route in 2005.

The disruption of coal exports out of the Powder River Basin may contribute to higher heating costs this winter.

The railroads will have to make significant progress on restoring and boosting shipping capacity on the joint line in order to meet what is expected to be unprecedented demand for Powder River Basin coal in 2006, Thomas Canter, executive director of the National Coal Transportation Association, said.

"We'll be very fortunate if we can ship 345 to 350 million tons for 2006," Canter said.

One project to boost coal shipments is the proposal by the Dakota, Minnesota & Eastern Railroad to ship Wyoming coal east through South Dakota and Minnesota.

If constructed, the DM&E project would be the largest railroad construction project in the United States in 100 years. DM&E plans to build 280 miles of new line into Wyoming's Powder River Basin coal region from Wall, S.D., and to rebuild its 600-mile main line from southern Minnesota to Wall. DM&E also plans to upgrade 150 miles of its line from Wall, S.D., northwest through Rapid City to Colony, Wyo."

Two things jump out. 1) It's been 10 months now and still the triple track Orin line is running at less than capacity. Anyone still doubt the benefits of dispersed redundancy? 2) If estimated demand for PRB coal is expected to increase by 25% in 2010, doesn't this bode well for DM&E's expected market share and demand-induced pricing power (assuming they can get the project done before then)?

[kenneo]

QUOTE: Originally posted by futuremodal

How was this done? Did either DM&E and/or DMV&W have keys to the BNSF switches? Or am I missing something regarding the track layouts in Aberdeen? Does someone have a map of Aberdeen via Mapquest they could provide?

This is more intriguing than I first thought!

There will be 5 tracks involved. A joint runaround for moving the power from one end to the other of the yard for the short lines, one ICD (Interchange Delivered) and one ICR (Interchange Received) track for each short line - restricted by agreement to interchange to or from the BN only.

So, lets say that A is DME ICR, B is DME ICD, C in the runaround, D is DMVW ICR and E is DMVW ICD. The DME slips into town with a cut for the BN and a cut for the DMVW. (Agreement says that all of this is supposed to go the the BN. The deal is to prevent the two short lines from cutting the BN out of line haul business by forcing them to use BN for a line haul between them.)

The DME crew cuts off from the BN cars they are leaving in Track B and set the DMVW cut into Track D, cut off and run back on Track C, couple up to Track A, make the air and terminal inspection, and flee.

Nobody on the BN will be the wiser until someone comes along that KNOWS what cars are supposed to be on what track or the shortlines actually get caught making a "NO-NO" interchange. Unfortunately, neither of these conditions will exist for long without being discovered.

[kenneo]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by bobwilcox

QUOTE: Originally posted by Murphy Siding
IF DM&E gets into the PRB to take coal traffic away from both BNSF and UP, what motivation would either of them have to work very hard to partner up with DM&E for grain shipments?

Since Mike Walsh, 20 years ago, the UP's business groups are run as seperate units. The grain group will be happy to work with the DM&E as long as they can make money for the grain group.

.

I wonder, is BNSF's corporate makeup anything like UP's? My guess is no given the bend-over-backwards-to-hold-the-bottleneck mentality of BNSF.

It also seems to me that the other Class I's do not engage in such bottleneck obsession as exhibited by BNSF, or at least to the same degree. At least I never read any news items about UP/KCS/NS/CSX/CP/CN bottleneck complaints, it all seems to be BNSF.

Are there any examples of UP bottleneck hording? CN? CP?

Yes. The UP at Eugene, OR. The W&P and the CORP use the same tracks in the same yard to interchange between the UP and themselves, but there is evection clause in the lease agreements from the SP days that prohibits direct interchange between the two short lines.

I don't know if it still is in effect, but early on there was a provision in the CORP agreement that denied direct operation for the for mer Coos Bay Branch and the Siskiyou - both CORP properties and leased under the same agreement.

When the SP and the BN were trying to shed their Tualatin Valley and Lower Columbia branches, super-restrictive interchange restrictions were in the contracts -- and no one would lease or purchase the lines. So the State of Oregon stepped in and purchased the "A" Line, the United line and the OE north of Salem (Labish) and promptly leased them to the Willamette and Pacific (operating as the Portland and Western) with "home road" operating access to all of the various former class 1 properties North of Newberg and Salem. Part of the result is that there is now direct service between the Roseburg area and Rainer for logs between Roseburg Lumber and Longview Fiber, International Paper and Weyerhaeuser and between the various Weyerhaeuser hardwood plants scattered on the CORP, W&P, P&W and POTB.

The State of Oregon has been death on these restrictive agreements - preventing them where they can and getting them rescinded where possible if they didn't get them stopped.

[Anonymous]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal

Oh ye of little faith!

I'll buy you a steak dinner, the day DM&E hauls its first coal train out of PRB on its new extention. You'll be able to take Amtrack from your city to my city, so that will be easy. <<<<<I'll give equal odds on either event happening![;)]

I'll just drive, as long as it's not in winter. Besides, the odds of Amtrak not existing by then are right on par with those other events.

[Murphy Siding]

QUOTE: Originally posted by futuremodal

Oh ye of little faith!

I'll buy you a steak dinner, the day DM&E hauls its first coal train out of PRB on its new extention. You'll be able to take Amtrack from your city to my city, so that will be easy. <<<<<I'll give equal odds on either event happening![;)]

[Anonymous]

Oh ye of little faith!

[Murphy Siding]

The newspaper (Sioux Falls, S.D. Argus Leader) yesterday said that DM&E got the go-ahead for their $2.5 billion dollar government loan, but has to wait another 30 days for another hurdle of some sort. Interesting, though, is DM&E President's statement that they wouldn't proceed on the PRB extention untill they got some cotracts from utilities to haul coal. My own thought is: they have now reached a point, where the utility companies can use them to beat down the prices from BNSF and UP. Why buy the cow, when you can force down the price of milk? Now is when the whole thing is apt to fizzle out.[xx(]

[bobwilcox]

The NS, CSXT and UP have the same view as the BNSF. Instances of closed access have come up with all of these carriers. However, the railroads involved often settle the issues. If you would like specifics suggest you do a search of old Traffic Worlds or Wall Street Journals over the last 25 years.

[Anonymous]

QUOTE: Originally posted by bobwilcox

QUOTE: Originally posted by Murphy Siding
IF DM&E gets into the PRB to take coal traffic away from both BNSF and UP, what motivation would either of them have to work very hard to partner up with DM&E for grain shipments?

Since Mike Walsh, 20 years ago, the UP's business groups are run as seperate units. The grain group will be happy to work with the DM&E as long as they can make money for the grain group.

I wonder, is BNSF's corporate makeup anything like UP's? My guess is no given the bend-over-backwards-to-hold-the-bottleneck mentality of BNSF.

It also seems to me that the other Class I's do not engage in such bottleneck obsession as exhibited by BNSF, or at least to the same degree. At least I never read any news items about UP/KCS/NS/CSX/CP/CN bottleneck complaints, it all seems to be BNSF.

Are there any examples of UP bottleneck hording? CN? CP?

[bobwilcox]

QUOTE: Originally posted by Murphy Siding
IF DM&E gets into the PRB to take coal traffic away from both BNSF and UP, what motivation would either of them have to work very hard to partner up with DM&E for grain shipments?

Since Mike Walsh, 20 years ago, the UP's business groups are run as seperate units. The grain group will be happy to work with the DM&E as long as they can make money for the grain group.

[edbenton]

With the DM&E hauling powder rivr coal there are alot of power plants in WI that are served by the CN and get the coal from the UP. Those are possible loads for the DM&E and there are a few other roads that could also gain with the ICE for the east coast plants to. Remember the DM&E started off as a regional spun off of old line even the CN&W did not want and yet they are making it work!!!

[route_rock]

Thats my road for you FM, hell they are suing an engineer for damages in that FT Mad wreck.. Maybe that would explain why DM&E's road in Iowa ( the ICE) took the switch lock off one of the industries here and put their own on it. Everywhere else on their line where the BNSF works is a contraption with both their lock and our lock,except for here. Oh well more buisness for them thats good for them, they just stick us in the hole for forever and a day.

[Anonymous]

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by futuremodal

I'm curious. If DM&E and DMV&W are both using the same BNSF sidings, and tried to pull a fly by night exchange again, what could BNSF do to stop this outside of a terse letter? Could BNSF then prohibit either DM&E or DMV&W from even entering BNSF property, forcing both D's to leave interchange consists on their own respective tracks for BNSF crews to pick up?

BTW - Thanks to nanaimo73 for providing an ariel shot of Aberdeen. That clears up alot!

FM, I have been informed by a DM&E employee that the two blocks of cars interchanged from DM&E to DMV&W that precipitated this action were not for export out of North America but rather Corn for some feedlots in Alberta. BNSF still didn't like being cut out of the rate. If the DM&E were to try and interchange cars to the DMV&W without authority to do so, the BNSF could bring them to Federal Court.

It is kind of interesting regarding some of the nuances of multiple-connection sidings. Apparently DM&E can park it's cars on this siding(s) owned by BNSF, DMV&W can park it's cars on the very same siding(s), they could probably even park both DM&E and DMV&W cars on the same siding(s) at the same time, BNSF may not even want to bother with them some of the time, yet woe to them if they actually exchanged cars between themselves. This is the kind of thing that makes re-regulation almost a certainty, because it begets such an absurdity of legalese, kind of like the property owner who swears out a trespassing warrant if someone takes two steps across the corner of his property.

It is my view that baiting BNSF to take the small guys to federal court for exchanging normal business may be just the thing to exemplify the inefficiencies of paper barriers and bottleneck rate gouging. Somewhere along the line common sense needs to be enforced by the STB for the good of the transportation community.

Does BNSF gain anything by preventing DM&E and DMN&W from doing business with each other? Does BNSF gain anything by preventing MRL and UP from exchanging traffic without BNSF acting as a 100 yard go-between in Spokane.

It is absurdity, pure absurdity in my view.

[beaulieu]

QUOTE: Originally posted by futuremodal

I'm curious. If DM&E and DMV&W are both using the same BNSF sidings, and tried to pull a fly by night exchange again, what could BNSF do to stop this outside of a terse letter? Could BNSF then prohibit either DM&E or DMV&W from even entering BNSF property, forcing both D's to leave interchange consists on their own respective tracks for BNSF crews to pick up?

BTW - Thanks to nanaimo73 for providing an ariel shot of Aberdeen. That clears up alot!

FM, I have been informed by a DM&E employee that the two blocks of cars interchanged from DM&E to DMV&W that precipitated this action were not for export out of North America but rather Corn for some feedlots in Alberta. BNSF still didn't like being cut out of the rate. If the DM&E were to try and interchange cars to the DMV&W without authority to do so, the BNSF could bring them to Federal Court.

[Anonymous]

I'm curious. If DM&E and DMV&W are both using the same BNSF sidings, and tried to pull a fly by night exchange again, what could BNSF do to stop this outside of a terse letter? Could BNSF then prohibit either DM&E or DMV&W from even entering BNSF property, forcing both D's to leave interchange consists on their own respective tracks for BNSF crews to pick up?

BTW - Thanks to nanaimo73 for providing an ariel shot of Aberdeen. That clears up alot!

[beaulieu]

QUOTE: Originally posted by futuremodal

So there will be no physical connection between the Orin line and the proposed DM&E PRB extension? That would eliminate the possibility of temporary usage of the DM&E by BNSF and UP should another Orin line flustercluck occur.

It doens't suprise me all that much regarding UP wanting to shift traffic over The Crow and on down the Washy rather than mess with the Blue Mountain crossing. That in and of itself would probably nix a DM&E-UP interchange in Wyoming even if there is a physical connection to the Orin line built. UP's problems between Nampa and Hinkle may be worse than advertised.

And I find it interesting that DM&E and DMV&W actually interchanged a few trains in Aberdeen before BNSF nixed it. How was this done? Did either DM&E and/or DMV&W have keys to the BNSF switches? Or am I missing something regarding the track layouts in Aberdeen? Does someone have a map of Aberdeen via Mapquest they could provide?

This is more intriguing than I first thought!

The tiny ex-GN yard in Aberdeen was alongside the ex-Milwaukee yard in Aberdeen, and during the time between the BN acquiring the ex-Milw. Rd mainline and then selling the ex-GN branch, BN reconfigured them into one yard. So what happened is the DM&E brought their train into the yard and spotted the cars for BNSF on one track and those for DMV&W on the track set aside for the DMV&W on their track. Both shortlines shared the BNSF ex-Milw yard in Aberdeen for interchange with the BNSF. Note that the are no BNSF switch cres assigned to the yard and only a local crew that does yard switching as needed. Believe me a scanner is vital to spot trains on the East - West mainline, patience helps too. Three trains each way is typical with a fourth train when grain is moving heavier. So it can be hours between any BNSF employees being present in the yard. Did I mention that there is only one supervisor assigned to Aberdeen? So the DM&E comes and drops the cars for DMV&W and some time later the DMV&W picks them up.

[Murphy Siding]

QUOTE: Originally posted by futuremodal

Perhaps it may be a moot point for DM&E regarding the paper barrier at Aberdeen. Once the PRB extension is built, won't DM&E have a decent westward connection with UP via the Orin line that could also be used to handle grain trains? Or does the UP-BNSF Orin line agreement prohibit all but coal trains?

IF DM&E gets into the PRB to take coal traffic away from both BNSF and UP, what motivation would either of them have to work very hard to partner up with DM&E for grain shipments?

[Murphy Siding]

QUOTE: Originally posted by futuremodal
[br

And I find it interesting that DM&E and DMV&W actually interchanged a few trains in Aberdeen before BNSF nixed it. How was this done? Did either DM&E and/or DMV&W have keys to the BNSF switches? Or am I missing something regarding the track layouts in Aberdeen? Does someone have a map of Aberdeen via Mapquest they could provide?

I *think* I recall reading, that someone locally, in Aberdeen, allowed the first run-through, before someone higher up actually approved it. I think it only happened once.

[Anonymous]

So there will be no physical connection between the Orin line and the proposed DM&E PRB extension? That would eliminate the possibility of temporary usage of the DM&E by BNSF and UP should another Orin line flustercluck occur.

It doens't suprise me all that much regarding UP wanting to shift traffic over The Crow and on down the Washy rather than mess with the Blue Mountain crossing. That in and of itself would probably nix a DM&E-UP interchange in Wyoming even if there is a physical connection to the Orin line built. UP's problems between Nampa and Hinkle may be worse than advertised.

And I find it interesting that DM&E and DMV&W actually interchanged a few trains in Aberdeen before BNSF nixed it. How was this done? Did either DM&E and/or DMV&W have keys to the BNSF switches? Or am I missing something regarding the track layouts in Aberdeen? Does someone have a map of Aberdeen via Mapquest they could provide?

This is more intriguing than I first thought!

[beaulieu]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by beaulieu

Yes the DM&E can interchange with the CP and UP, but it is several hundred miles further east. Raising the costs to route it that way.

So the Aberdeen connection is key? BNSF has contractual "bottleneck" rights dating from their takeover of operations of the State owned ex-Milwaukee tracks including the few miles in Aberdeen between DM&E to the south and DMV&W (and thus onto CP) to the north, if I understand correctly. This CP connection is viable competition mileage-wise with BNSF to the PNW, so naturally BNSF would contest this possible connection from a purely business standpoint e.g. they get to keep all of DM&E's PNW-bound grain on BNSF rails west of Aberdeen. Makes sense for BNSF to go that way, but why would the State acquiesce to this paper barrier if it means higher rates to PNW for its grain growers?

Also, is the distance between DM&E and DMV&W so far or obstructed that the State couldn't just build a connection parallel to the Core lines for a few million?

A couple of things so you understand the situation better. First BNSF's shuttle train rate is competitive with CP's, as is their trainload non-shuttle rate. Where the elevators prefer CP comes with the fact that CP's 52 car rate is noticeably cheaper than BNSF's rate and CP did, at least last year, offer a 26-car rate. Each was proportionally higher but was viewed as reasonably so. BNSF would not allow two nearby elevators to split a 52 car shipment. while CP would, and so on. Most South Dakota elevators cannot load Shuttle trains.

Now to give you an idea of the geography of the Aberdeen area. Aberdeen was served by three railroads, The GN's branch arriving from the NE, the Milwaukee's mainline running E-W through town with a secondary line running N-S on the west side of Aberdeen, and the C&NW coming in from the South but coming in on the east side of town. Prior to the Milwaukee bankruptcy the only changes were the GN becoming BN, and the C&NW becoming DM&E. In 1980 when the Trustee closed the Pacific extension the State of South Dakota bought all of the former Milwaukee, if the State bought the portion of the secondary line north of the mainline it was quickly abandoned. The BN bought the E-W mainline in the mid '80s from the State and it is not part of the current transaction. The BN operated the State owned trackage as a leaseholder. In the '90s the DM&E abandoned their trackage in favor of Trackage Rights over the BN since they had no customers in Aberdeen of their own and the only reason to come to Aberdeen was to interchange with BN. The reason they come to Aberdeen rather than just interchange at Wolsey is to preserve their share of the freight rate division , and Wolsey has no facilities. So DM&E now comes into town over the "Core" on the west side of Aberdeen. Then around the year 2000 BN decides to abandon the former GN branch into Aberdeen and the State decides to buy the line rather than allow it to be abandoned as there are several small elevators that could ship by rail with lower rates. The DMV&W was the State's chosen operator of the former GN line since they operated the Soo Line branch that connects this GN line to the CP (Soo) mainline. The **** hit the fan when the DM&E tried to interchange several 52 car blocks of grain to the DMV&W. The first two trains moved OK, it probably took that long for Ft. Worth to hear about it, but nothing further has been interchanged between DM&E and DMV&W since.

[beaulieu]

QUOTE: Originally posted by futuremodal

Perhaps it may be a moot point for DM&E regarding the paper barrier at Aberdeen. Once the PRB extension is built, won't DM&E have a decent westward connection with UP via the Orin line that could also be used to handle grain trains? Or does the UP-BNSF Orin line agreement prohibit all but coal trains?

It will be more difficult than that for DM&E, first they won't be able to use the Orin Line for their trains so their PRB extension will look like a hand with the arm coming to a point just east of the coal fields and then spreading out like fingers to each of the mine loadouts which are along a line over many miles, and since many of the mines are on the east side of the Orin Line with the loadouts located on the west side of the area being mined, the DM&E will have separate branches for each mine and they will have to loop around the mine area. The second problem is that they would have to build an interchange yard somewhere in the PRB. near Bill, WY probably. And of course BNSF may be able to nix the operation of non-coal traffic over the Orin Line by UP. Next we have the fact that UP has been exploring the idea of routing some export grain from Southern Minnesota and Northern Iowa via the CP to avoid capacity problems on the Overland Route and the Oregon Short Line. The UP and CP ran an inspection train over the route in early November of this year.

[Anonymous]

Perhaps it may be a moot point for DM&E regarding the paper barrier at Aberdeen. Once the PRB extension is built, won't DM&E have a decent westward connection with UP via the Orin line that could also be used to handle grain trains? Or does the UP-BNSF Orin line agreement prohibit all but coal trains?

[Murphy Siding]

Truth be known, you can probably see DM&E rails from DMV&W rails, from opposite ends of BNSF's yard. Because the city of Aberdeen is built around the yard, a parallel connection would be difficult. I'm not sure why the state is being so pliable about all this.

[Anonymous]

QUOTE: Originally posted by beaulieu

Yes the DM&E can interchange with the CP and UP, but it is several hundred miles further east. Raising the costs to route it that way.

So the Aberdeen connection is key? BNSF has contractual "bottleneck" rights dating from their takeover of operations of the State owned ex-Milwaukee tracks including the few miles in Aberdeen between DM&E to the south and DMV&W (and thus onto CP) to the north, if I understand correctly. This CP connection is viable competition mileage-wise with BNSF to the PNW, so naturally BNSF would contest this possible connection from a purely business standpoint e.g. they get to keep all of DM&E's PNW-bound grain on BNSF rails west of Aberdeen. Makes sense for BNSF to go that way, but why would the State acquiesce to this paper barrier if it means higher rates to PNW for its grain growers?

Also, is the distance between DM&E and DMV&W so far or obstructed that the State couldn't just build a connection parallel to the Core lines for a few million?

[beaulieu]

Yes the DM&E can interchange with the CP and UP, but it is several hundred miles further east. Raising the costs to route it that way.

[Murphy Siding]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by beaulieu
....the agreement prohibits the movement of export grain via Aberdeen to the PNW,

That sounds kind of fishy. Doesn't federal statute prohibit restrictions to interstate commerce? DM&E currently sends it's PNW-bound grain trains via BNSF, is this now going to end?

QUOTE:
and only Dakota Shortline, Dakota Southern, and D&I get access to other railroads at Sioux City.

What are the "other" railroads at Sioux City? UP? KCS? CN?

QUOTE:
DM&E, Dakota Southern, and Dakota Shortline can access the DMV&W, and hence CP, at Aberdeen.

But not for export grain? Wasn't the stand taken by the State intended to avoid the whole "Montana problem" regarding captive grain shipping rates to the Pacific Rim?

QUOTE:
DM&E cannot interchange Coal?, Intermodal?, or export grain via CP-UP.

If this is true, and the feds uphold this deal, the State f****d up big time. Welcome to Montana's economic hell, South Dakota!

The other railroads at Sioux City are CN and UP. While some of the grain does move east, the best prices are to the Pacific Rim countries. The three shortlines will come out on this deal, but they don't represent much of a loss to BNSF, The DM&E gets very little. Possibly some grain for Duluth, and small amounts of inbound material, like paper etc. will move via Aberdeen gateway. Basically the BNSF will get all the export grain to the west coast, while giving up a very small amount moving to domestic flour mills, and loses participation in the aggregate movements off of the D&I.

I'm still curious as to how PNW grain exports can be limited to BNSF interchange only. I know that currently DM&E sends it's Pacific Rim grain trains via BNSF anyway, so from a practical standpoint it should be a fairly moot point, but wouldn't federal interstate commerce law supercede a restrictive caveat if DM&E or one of the other shortlines wanted to interchange PNW grain trains with CP via Aberdeen?

Doesn't DM&E or DS also have a prior UP or CP interchange not dependent on this agreement, e.g. somewhere other than Aberdeen or Sioux City?

The DS ends(?) in Mitchell, 100+ miles from any connection with CN or UP at Sioux City, Iowa. The interchange with CP(?) that DM&E has through Aberdeen is by way of , I *think* the Missouri River Valley(?) Railroad. The problem, is that the two roads don't actually touch rails. There is a few miles of BNSF tracks, in the Aberdeen yard that must be used to connect. BNSF was in a lawsuit over just that issue. DM&E could haul grain through it's "core" system, east into Minnesota, until it can interchange with UP,CN, or CP, I suppose.

[Anonymous]

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by beaulieu
....the agreement prohibits the movement of export grain via Aberdeen to the PNW,

That sounds kind of fishy. Doesn't federal statute prohibit restrictions to interstate commerce? DM&E currently sends it's PNW-bound grain trains via BNSF, is this now going to end?

QUOTE:
and only Dakota Shortline, Dakota Southern, and D&I get access to other railroads at Sioux City.

What are the "other" railroads at Sioux City? UP? KCS? CN?

QUOTE:
DM&E, Dakota Southern, and Dakota Shortline can access the DMV&W, and hence CP, at Aberdeen.

But not for export grain? Wasn't the stand taken by the State intended to avoid the whole "Montana problem" regarding captive grain shipping rates to the Pacific Rim?

QUOTE:
DM&E cannot interchange Coal?, Intermodal?, or export grain via CP-UP.

If this is true, and the feds uphold this deal, the State f****d up big time. Welcome to Montana's economic hell, South Dakota!

The other railroads at Sioux City are CN and UP. While some of the grain does move east, the best prices are to the Pacific Rim countries. The three shortlines will come out on this deal, but they don't represent much of a loss to BNSF, The DM&E gets very little. Possibly some grain for Duluth, and small amounts of inbound material, like paper etc. will move via Aberdeen gateway. Basically the BNSF will get all the export grain to the west coast, while giving up a very small amount moving to domestic flour mills, and loses participation in the aggregate movements off of the D&I.

I'm still curious as to how PNW grain exports can be limited to BNSF interchange only. I know that currently DM&E sends it's Pacific Rim grain trains via BNSF anyway, so from a practical standpoint it should be a fairly moot point, but wouldn't federal interstate commerce law supercede a restrictive caveat if DM&E or one of the other shortlines wanted to interchange PNW grain trains with CP via Aberdeen?

Doesn't DM&E or DS also have a prior UP or CP interchange not dependent on this agreement, e.g. somewhere other than Aberdeen or Sioux City?

[Anonymous]

Businessman says talks moving ahead in state rail line sale
(The Associated Press circulated the following article on November 23.)

YANKTON, S.D. -- Progress is being made in negotiations to work out the details of a proposed sale of the state-owned railroad line, the head of the Dakota Southern Railway said Tuesday.

In April, Gov. Mike Rounds said a general agreement had been reached under which the Burlington Northern Santa Fe would buy the state-owned rail line for about $41 million.
But state and BNSF officials said the sale hinged on whether details of the plan could be worked out.

Alex Huff, president of Dakota Southern, said a deal must be getting closer because he signed his part of the agreement on Monday. Under the plan, Huff said his company gains trackage rights to Sioux City, Iowa.

Huff said Rounds deserves credit for "sticking to his guns" in a long and drawn out process.

State Transportation Secretary Judy Payne told The Associated Press on Monday that negotiations with BNSF were continuing.

Payne previously has said the settlement will not become final unless BNSF works out operating agreements with a number of short-line railroads that want to use the track. The settlement also requires the state to make improvements to some parts of the line if the sale becomes final, she said.


Wednesday, November 23, 2005
From BLET Site

[beaulieu]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by beaulieu
....the agreement prohibits the movement of export grain via Aberdeen to the PNW,

That sounds kind of fishy. Doesn't federal statute prohibit restrictions to interstate commerce? DM&E currently sends it's PNW-bound grain trains via BNSF, is this now going to end?

QUOTE:
and only Dakota Shortline, Dakota Southern, and D&I get access to other railroads at Sioux City.

What are the "other" railroads at Sioux City? UP? KCS? CN?

QUOTE:
DM&E, Dakota Southern, and Dakota Shortline can access the DMV&W, and hence CP, at Aberdeen.

But not for export grain? Wasn't the stand taken by the State intended to avoid the whole "Montana problem" regarding captive grain shipping rates to the Pacific Rim?

QUOTE:
DM&E cannot interchange Coal?, Intermodal?, or export grain via CP-UP.

If this is true, and the feds uphold this deal, the State f****d up big time. Welcome to Montana's economic hell, South Dakota!

The other railroads at Sioux City are CN and UP. While some of the grain does move east, the best prices are to the Pacific Rim countries. The three shortlines will come out on this deal, but they don't represent much of a loss to BNSF, The DM&E gets very little. Possibly some grain for Duluth, and small amounts of inbound material, like paper etc. will move via Aberdeen gateway. Basically the BNSF will get all the export grain to the west coast, while giving up a very small amount moving to domestic flour mills, and loses participation in the aggregate movements off of the D&I.

[Anonymous]

QUOTE: Originally posted by beaulieu
....the agreement prohibits the movement of export grain via Aberdeen to the PNW,

That sounds kind of fishy. Doesn't federal statute prohibit restrictions to interstate commerce? DM&E currently sends it's PNW-bound grain trains via BNSF, is this now going to end?

QUOTE:
and only Dakota Shortline, Dakota Southern, and D&I get access to other railroads at Sioux City.

What are the "other" railroads at Sioux City? UP? KCS? CN?

QUOTE:
DM&E, Dakota Southern, and Dakota Shortline can access the DMV&W, and hence CP, at Aberdeen.

But not for export grain? Wasn't the stand taken by the State intended to avoid the whole "Montana problem" regarding captive grain shipping rates to the Pacific Rim?

QUOTE:
DM&E cannot interchange Coal?, Intermodal?, or export grain via CP-UP.

If this is true, and the feds uphold this deal, the State of South Dakota messed up big time. Welcome to Montana's world, South Dakota!

[Murphy Siding]

QUOTE: Originally posted by CSSHEGEWISCH

QUOTE: Originally posted by futuremodal
So plagerize a few choice tidbits then. You must plagerize, you must! The information is vital!

So it appears that FM has no scruples, intellectual or otherwise, when it comes to his attempts to make his case. As it turns out, the information was hardly sufficient to be vital; to what, I don't know.

I saw this for what it was: a request for more info, not the missing link in a cospiracy theory[:)]

[beaulieu]

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by Murphy Siding


Another little, filler article about it today in the paper. It says that the state is holding out on selling the trackage to BNSF until the deatails can be worked out concerning shortlines using BNSF trackage. This time, the Dakota Southern is mentioned. I didn't know they were still around.

Inspite, of BNSF's single-minded fixation on Shuttle Grain trains, the Dakota Southern has managed to hang on by the skin of their teeth by acting as a switching contractor for one company in Mitchell, SD. The Dakota Southern signed its agreement with BNSF yesterday, this should allow them to reactivate their line to Chamberlain, SD. This agreement will allow South Dakota to avoid the trap that Montana is in.

Wrong I was, the agreement prohibits the movement of export grain via Aberdeen to the PNW, and only Dakota Shortline, Dakota Southern, and D&I get access to other railroads at Sioux City. BNSF pays what South Dakota paid to purchase, repair and upgrade the line, no interest and no repayment of Federal money.
My reading is that South Dakota didn't get much, but the three Shortlines will benefit some. DM&E, Dakota Southern, and Dakota Shortline can access the DMV&W, and hence CP, at Aberdeen. The State will build a new siding at Aberdeen to facilitate the interchange. DM&E cannot interchange Coal?, Intermodal?, or export grain via CP-UP.

[beaulieu]

QUOTE: Originally posted by Murphy Siding


Another little, filler article about it today in the paper. It says that the state is holding out on selling the trackage to BNSF until the deatails can be worked out concerning shortlines using BNSF trackage. This time, the Dakota Southern is mentioned. I didn't know they were still around.

Inspite, of BNSF's single-minded fixation on Shuttle Grain trains, the Dakota Southern has managed to hang on by the skin of their teeth by acting as a switching contractor for one company in Mitchell, SD. The Dakota Southern signed its agreement with BNSF yesterday, this should allow them to reactivate their line to Chamberlain, SD. This agreement will allow South Dakota to avoid the trap that Montana is in.

[beaulieu]

No need the deal is done, all agreements have been signed see BNSF Press Release here;
http://www.bnsf.com/media/news/articles/2005/11/2005-11-23a.html

[petervonb]

Instead of shooting at each other, see if you can find the news article. I spent 10 minutes monkeying with the Sioux Falls Argus Leader website trying to find the story(s) to no avail. Maybe one of you will have better luck - or maybe it's in some other periodical.

Ciao

[Anonymous]

QUOTE: Originally posted by CSSHEGEWISCH

QUOTE: Originally posted by futuremodal
So plagerize a few choice tidbits then. You must plagerize, you must! The information is vital!

So it appears that FM has no scruples, intellectual or otherwise, when it comes to his attempts to make his case. As it turns out, the information was hardly sufficient to be vital; to what, I don't know.

So it's back to being a cheap shot artist, huh CSSHEGEWISCH? Obviously, it is you who lacks scruples. What "case" do you think I am making?

All I wanted was some specifics on the South Dakota / BNSF trackage deal. Is one party or the other going to cut and run from this deal? Will BNSF find a loophole that puts a paper barrier or two in front of DM&E or DS?

[CSSHEGEWISCH]

QUOTE: Originally posted by futuremodal
So plagerize a few choice tidbits then. You must plagerize, you must! The information is vital!

So it appears that FM has no scruples, intellectual or otherwise, when it comes to his attempts to make his case. As it turns out, the information was hardly sufficient to be vital; to what, I don't know.

[Murphy Siding]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Murphy Siding

Today's paper has a story that BNSF has hit a *delay* of sorts in it's plan to buy trackage owned by the stat of South Dakota. My guess is that there are some issues with letting other railroads (DM&E, and another up by Aberdeen) use portions of what will be BNSF trackage.

Can you post the article, or at least post a few exerpts? Or a link?

Alas, I am a computer dummy[D)]. The article appears in the Sioux Falls Argus Leader.

So plagerize a few choice tidbits then. You must plagerize, you must! The information is vital!

Another little, filler article about it today in the paper. It says that the state is holding out on selling the trackage to BNSF until the deatails can be worked out concerning shortlines using BNSF trackage. This time, the Dakota Southern is mentioned. I didn't know they were still around.

[Murphy Siding]

I'll look for it.

[Anonymous]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Murphy Siding

Today's paper has a story that BNSF has hit a *delay* of sorts in it's plan to buy trackage owned by the stat of South Dakota. My guess is that there are some issues with letting other railroads (DM&E, and another up by Aberdeen) use portions of what will be BNSF trackage.

Can you post the article, or at least post a few exerpts? Or a link?

Alas, I am a computer dummy[D)]. The article appears in the Sioux Falls Argus Leader.

So plagerize a few choice tidbits then. You must plagerize, you must! The information is vital!

[Murphy Siding]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Murphy Siding

Today's paper has a story that BNSF has hit a *delay* of sorts in it's plan to buy trackage owned by the stat of South Dakota. My guess is that there are some issues with letting other railroads (DM&E, and another up by Aberdeen) use portions of what will be BNSF trackage.

Can you post the article, or at least post a few exerpts? Or a link?

Alas, I am a computer dummy[D)]. The article appears in the Sioux Falls Argus Leader.

[Anonymous]

QUOTE: Originally posted by Murphy Siding

Today's paper has a story that BNSF has hit a *delay* of sorts in it's plan to buy trackage owned by the stat of South Dakota. My guess is that there are some issues with letting other railroads (DM&E, and another up by Aberdeen) use portions of what will be BNSF trackage.

Can you post the article, or at least post a few exerpts? Or a link?

[Murphy Siding]

Today's paper has a story that BNSF has hit a *delay* of sorts in it's plan to buy trackage owned by the stat of South Dakota. My guess is that there are some issues with letting other railroads (DM&E, and another up by Aberdeen) use portions of what will be BNSF trackage.

[PNWRMNM]

Future,

Only when those noncaptive RVC ratios get into the 150% range will I agree that the carriers have pricing power on that traffic, and that DME has a chance.

I do not expect to see that happy day.

Mac

[Anonymous]

QUOTE: Originally posted by PNWRMNM

Future,

On what basis do you disagree with my contention, which is based on CURE data, that noncaptive coal from PRB is already moving at RVC ratios very little over 100%? Their data shows all noncaptive traffic at an average of 103%. Coal rates per ton are 40-50% of rates for other commodities, again CURE data. I see no data to support your conclusion.

For DME what RVC other western carriers are getting for ALL coal is irrelevant. All the coal DME proposes to haul will be noncaptive, by definition. They will loose their shirt hauling noncaptive coal.

Mac

Well, without convincing either BNSF or UP to open their books for us, we can only surmise what kind of revenue they are getting from PRB coal hauls. We do know that value-added products command a higher rate than non-value added products. Of all the CURE data, only coal can be assumed to be a non-value added product. It would be interesting if they could separate their unit grain train data from the all inclusive category of "Farm Products" to see if the unit coal rates are that much different. Also, coal is for the most part exclusively unit train stuff, while farm products, chemicals, lumber and wood, and pulp paper may be mostly carload commodities, and anything that has to be switched will command a higher rate to cover those costs.

What we can both agree on is that DM&E's coal traffic will be in unit train form, meaning costs will be lower than for carload traffic, so they can correspondingly have lower per ton rates for coal than for that other traffic. And since demand for PRB coal is outstripping the ability of the railroads to deliver, it is my hunch that the railroads will not waste this opportunity to maximize pricing power over those PRB loads.

Anything can happen in the near future that will prove either you or myself right regarding the prospect of DM&E making a viable commercial go of this project. I'll still go with DM&E on this one if for no other reason than coal's long term demand prospects remain high.

[Anonymous]

QUOTE: Originally posted by Murphy Siding

Why doesn't DM&E build a line into the grain country of Montana? I hear talk of a railroad up there making so much money, that they're actively trying to turn some of the business away?[:-,]

For DM&E to make such a venture even close to being realistic from a business perspective, they would have to not only tap into the heart of the Montana wheat country, but they would have to extend that line all the way to a Pacific port. What you are suggesting is basically another transcon, aka rebuilding the Milwaukee PCE. I don't think the feds are going to loan or grant them any money for that, and no one can build a railroad these days without significant federal aid.

[Murphy Siding]

QUOTE: Originally posted by PNWRMNM

For DME what RVC other western carriers are getting for ALL coal is irrelevant. All the coal DME proposes to haul will be noncaptive, by definition. They will loose their shirt hauling noncaptive coal.

Mac

I agree 100%

[PNWRMNM]

Future,

On what basis do you disagree with my contention, which is based on CURE data, that noncaptive coal from PRB is already moving at RVC ratios very little over 100%? Their data shows all noncaptive traffic at an average of 103%. Coal rates per ton are 40-50% of rates for other commodities, again CURE data. I see no data to support your conclusion.

For DME what RVC other western carriers are getting for ALL coal is irrelevant. All the coal DME proposes to haul will be noncaptive, by definition. They will loose their shirt hauling noncaptive coal.

Mac

[Anonymous]

Mac,

I disagree with your contention that BNSF and UP are engaged in a rate war for the transport of PRB coal, or that there are any number of coal hauling contracts that result in RVC's in the 100% range. Most coal fired plants out West are captive to one or the other. Even if a connecting line in the South and East (such as KCS, NS, or CSX) has the ability to play one connection against the other, the coal fired plants on those railroads are also likely to be captive, so the overall rate from PRB to those plants will be a captive rate, and either UP or BNSF will share in a percentage of those captive rates. Given the pricing power railroads have right now for coal transport I would expect those "shared" corridors are bringing in revenues well in line with the STB RVC standard.

I just don't see either UP or BNSF having an average RVC for all PRB coal hauling at below 180%. If true, then the entry by DM&E will not have that great of an impact on average PRB coal rates. You may be right that DM&E will have less on line captive customers relative to BNSF and UP to balance out the total coal hauling RVC ratios.

There are also the the cross benefits of this project on DM&E's other business, such as grain hauling.

And I still think that there is more to this project than just DM&E's desire to enter the PRB. It's just a hunch.

[Murphy Siding]

Why doesn't DM&E build a line into the grain country of Montana? I hear talk of a railroad up there making so much money, that they're actively trying to turn some of the business away?[:-,]

[PNWRMNM]

Future,

In your most recent reply you cite CURE rate data and conclude from that that BNSF and UP have a higer percentage of "captive" coal than the Eastern Roads. Please explain how to calculate any conclusion as to percentage of captive coal on any of the carriers from this rate data. I do not see how this data supports that conclusion.

You say that you doubt DME entry into the market would cause a rate war. That I agree with. The rate war is already raging. When BNSF and UP are carrying competitive traffic at and average of 103% of variable cost that is plain evidence of a rate war. DME enty into the market would turn the current two party rate war into a three party rate war.

I have made no claim as to BNSF or UP RVC ratios on ALL coal out of PRB for two reasons. First the CURE data is not sufficently detailed to enable the calculation. Second, and more important, is that ratio on ALL coal is irrelevant since any coal the DME hauls will, by definition, be competitive.

Your take on "lack of private investment enthusiasm" for DME's project is both reasonable and interesting. I would agree that the Democrats could spell trouble for coal projects. If DME gets RRIF funds before the election, and the Democrats reduce PRB coal growth, freeze volumes, or drive them down, then the DME coal project is dead regardless of how cheap the money is. It would be foolhardy to put $2.5 billion into track that will not have traffic. In that case they would be wise to give the money back and quit before they squander it on the road to bankruptcy.

Mac

[Anonymous]

QUOTE: Originally posted by PNWRMNM

Future,

You are missing the point. According to CURE, competitive traffic of all kinds moves at a RVC ratio of 103% in the West(UP-BNSF Average).

But why do you think this 103% average is based on coal more so than import intermodal? According to the CURE study, the captive coal rates for BNSF/UP ($18.52 average) are 15% higher than the corresponding captive coal rates for NS/CSX ($15.82 average), while the non-captive coal rates for all four railroads are only a 7% difference. This would indicate that BNSF and UP have a greater percentage of captive coal customers than the eastern railroads. Meanwhile, the percentage of revenue derived from captive customers is about 37% for NS/CSX and 24% for BNSF/UP, so a far greater percentage of total captive traffic is in coal for BNSF/UP than it is for NS/CSX. Therefore, it is statistically less likely that either BNSF or UP would have an RVC ratio for coal under the 180% standard. The recent news that demand for PRB coal is outweighing BNSF's and UP's ability to deliver would infer that both BNSF and UP can exercise more pricing power for PRB coal moves.

I just doubt that DM&E's entry into PRB will cause a rate war.

QUOTE:

DME coal will be all competitive. One would expect it to move at about the regional RVC ratio in the absence of data to the contrary.

If their route is better in terms of mileage, ruling grades, and/or rise and fall, then their RVC would be higher at a given rate than the competition's. If their route is inferior their variable cost will be higher and they will hit the 100% RVC wall before their competitors. I do not know which is true. Odds are these factors will be reasonably close on some moves. I would assume them a push.

DM&E would have the most direct route east out of the PRB with their east-west alignment contrasted with the Orin line's north-south alignment. I am assuming therefore that DM&E's mileage to the eastern customers will be shorter than either BNSF's or UP's routes. As for gradient, I'll have to check the website to see if they are offering a profile map of the extension. Again, my assumption is that relative grade comparisons will be a wash.

QUOTE:

DME's problem is that their investment base will be in current dollars, while much of the competitors is in older dollars, some of which has been depreciated. I suspect DME's ratio of investment to revenues will be higher than their competitors. Industry average is $3 investment to generate $1 of annual revenue.

If DME ratio will be higher, that will be a big burdem. I suspect it is more likely to be higher than lower. Even if DME is willing to settle for 6% ROI they need a RVC ratio of at least 118% (100% plus 3*.06). I do not think they can get that RVC, BNSF and UP will not let them. They don't let each other get 118%, so why would they let the DME?

If you can source that, that'd be great. At this point I am not willing to take your word that either BNSF or UP have RVC ratio's under 180% for all (captive and non-captive) coal hauling out of the basin. I will however accept your contention that DM&E will need an average RVC of over 118% to make the project viable to it's investors (including Uncle Sam), and I have no doubt they will be able to do this unless PRB coal demand collapses somehow.

QUOTE:

The other point is that the private capital markets would not invest in this project even at 6%. They will demand more than that even of a sure investment. DME is far from sure so the market will require a risk premium. The prospect of RRIF money minimizes this problem and could get cost of capital down to 6%, but it will be a very risky business and the FRA does evaluate the borrower's business plan. I would not put my money into it.

Again, I believe the lack of private investment enthusiasm over DM&E's PRB extension is soley due to the uncertainty of PRB coal demand being able to outweigh potential changes to the political landscape come 2006/2008 and beyond. If the Democrats take over both the Presidency and/or Congress it could spell trouble for coal based projects. We saw that in the 1990's with Clinton's EPA et al and the negative effects it had on coal relative to natural gas power plant development. That's why DM&E needed some hard federal backing to make sure financing is independent of private investment skittishness. If DM&E gets all the 2.5 billion secured before the 2006 elections they'll be just fine.

[PNWRMNM]

Future,

You are missing the point. According to CURE, competitive traffic of all kinds moves at a RVC ratio of 103% in the West(UP-BNSF Average).

DME coal will be all competitive. One would expect it to move at about the regional RVC ratio in the absence of data to the contrary.

If their route is better in terms of mileage, ruling grades, and/or rise and fall, then their RVC would be higher at a given rate than the competition's. If their route is inferior their variable cost will be higher and they will hit the 100% RVC wall before their competitors. I do not know which is true. Odds are these factors will be reasonably close on some moves. I would assume them a push.

DME's problem is that their investment base will be in current dollars, while much of the competitors is in older dollars, some of which has been depreciated. I suspect DME's ratio of investment to revenues will be higher than their competitors. Industry average is $3 investment to generate $1 of annual revenue.

If DME ratio will be higher, that will be a big burdem. I suspect it is more likely to be higher than lower. Even if DME is willing to settle for 6% ROI they need a RVC ratio of at least 118% (100% plus 3*.06). I do not think they can get that RVC, BNSF and UP will not let them. They don't let each other get 118%, so why would they let the DME?

The other point is that the private capital markets would not invest in this project even at 6%. They will demand more than that even of a sure investment. DME is far from sure so the market will require a risk premium. The prospect of RRIF money minimizes this problem and could get cost of capital down to 6%, but it will be a very risky business and the FRA does evaluate the borrower's business plan. I would not put my money into it.

How will DME make any money on PRB coal?

Mac

[Anonymous]

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by futuremodal


Show me any railroad profits sheets where coal is being hauled at 102% of variable cost. You're confusing coal hauling with import intermodal. Import intermodal is where railroads can't come close to meeting revenue adequacy (which doesn't explain why most capacity investments are going to improve the import intermodal corridors).

Most power plants are captive, even if the source of the coal is not. Therefore, DM&E will be able to charge a rate that is more than adequate to cover it's portion of the investment.

One other thing Dave, don't assume that Import Intermodal is as revenue inadequate as you presume, relative to its costs it is much better than Domestic Intermodal. The speeds harmonize better with other traffic, unlike the UPS bullets where costs of failure and disruption to other traffic more than offset the potentially higher revenues, after all the containers just spent two plus weeks on a ship that may have been delayed by storms. as long as the train isn't days late the shipper isn't going to get too nervous. You must have noticed that BNSF took a pass on the UPS business when UPS wanted fast trains from LA to Chicago.

beaulieu, the difference between Import Intermodal and Domestic Intermodal is that all import intermodal has competitive rail access at all major seaside container ports. Furthermore, overseas importers have a multitude of options regarding which combination of container lines and container ports to utilize. And finally most major US consumption markets are either located seaside, or located within a shorthaul of the major waterways (which all seem to be paralelled by at least three Class I's). Until the CN's Prince George container port comes on line, there are no captive container ports in North America.

The point is, since all import intermodal has competition driving down rates, those import intermodal rates have to be at the low end of the RVC spectrum.

Contrast that with domestic intermodal. There are many domestic intermodal terminals that are geographically captive to one Class I. The only other options available would require an expensive long truck haul to an alternate intermodal terminal, so the rate alternative would also be high. The monopoly Class I can charge rates from these terminals that are much higher than those rates from import intermodal terminals. And as you point out, since much domestic intermodal is time sensitive aka UPS, the rates for those shipments are on the high end of the RVC spectrum. Yeah, those time sensitive trains will use more fuel, but their crews are less likely to go dead, so the variable costs attributed to those trains cannot be that much higher. I guess if you count the delays to other trains going in the hole for the hotshots as a variable cost of the hothsot, you could make an arguement for a higher VC for the hotshots. But the rates the railroads can charge for hotshots are as high as any such rates can be, because the only alternatives are long haul trucks or airlines, so the rates can be just below those higher cost alternatives.

I know BNSF has turned down more UPS business. They terminated the Swift RoadRailers. They are making business decisions that are not making sense. There is no way they can charge rate that exceeds the RVC standard of 180% on import intermodal no matter how much they try to minimize VC on those doublestacks, because there is just too much competition from other railroads and other shipping options to allow any profit mazimization. They are ordering more and more double stack wells. Those new equipment purchases cost money. They are spending an awful lot of money on increasing capacity on the LA to Chicago corridor. That is costing a pretty penny. If we attribute those expenditures as a portion of the doublestack VC, there is no way they are much above recouping 100% of RVC. And I suspect they may actually be below the 100% RVC on those double stack trains if we include the costs of capacity improvements and equipment purchases. We know they're not buying more spine cars for domestic TOFC, there seems to be plenty of those still sitting around stored on various sidings.

Right Dave, CP just stopped handling TOFC traffic completely, if it isn't in a can they won't handle it. BNSF hasn't gotten there yet but they might. Don't forget that just because its a container doesn't necessarily mean its import business.
CP moves lots of domestic business in containers. And if you need to move freight to the West Coast, Maersk, COSCO, Hanjin, Evergreen would love to ship it in one of their boxes even if it isn't leaving the country, saves them paying to move empty boxes. I realize Dave that all six of the Class Is are nuts and you know best.

Hmmm, call me paranoid, but I think I detect a slight, just a slight, note of sarcasm here. That's alright, I'm used to it.

Nonetheless, you do bring up a good point regarding the ongoing problem of repositioning ISO containers once the import goods are offloaded. There was another thread some time back where it was shown that many of these ISO boxes are just sitting around stacked in various places on the East Coast or the Midwest, it just doesn't pay for the railroad to haul them back empty, and most westward domestic moves are going in the roomier domestic boxes and trailers if they are going intermodal at all.

There is an opportunity for using empties to haul export grain back to a Pacific Coast port, but again the problem is getting the empties from where they wind up to where they could be used. I know, where I live Pacific Rim exporters have a big problem just trying to get some empty high cubes for their products. These guys end up hauling their stuff in domestic trailers or boxcars to the Pacific ports where the ISO's are available, and transloading into the ISO's there with expensive longshoreman labor.

Again, the point being that the overseas manufacturers probably aren't having the problems that domestic exporters are having.

[beaulieu]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by futuremodal


Show me any railroad profits sheets where coal is being hauled at 102% of variable cost. You're confusing coal hauling with import intermodal. Import intermodal is where railroads can't come close to meeting revenue adequacy (which doesn't explain why most capacity investments are going to improve the import intermodal corridors).

Most power plants are captive, even if the source of the coal is not. Therefore, DM&E will be able to charge a rate that is more than adequate to cover it's portion of the investment.

One other thing Dave, don't assume that Import Intermodal is as revenue inadequate as you presume, relative to its costs it is much better than Domestic Intermodal. The speeds harmonize better with other traffic, unlike the UPS bullets where costs of failure and disruption to other traffic more than offset the potentially higher revenues, after all the containers just spent two plus weeks on a ship that may have been delayed by storms. as long as the train isn't days late the shipper isn't going to get too nervous. You must have noticed that BNSF took a pass on the UPS business when UPS wanted fast trains from LA to Chicago.

beaulieu, the difference between Import Intermodal and Domestic Intermodal is that all import intermodal has competitive rail access at all major seaside container ports. Furthermore, overseas importers have a multitude of options regarding which combination of container lines and container ports to utilize. And finally most major US consumption markets are either located seaside, or located within a shorthaul of the major waterways (which all seem to be paralelled by at least three Class I's). Until the CN's Prince George container port comes on line, there are no captive container ports in North America.

The point is, since all import intermodal has competition driving down rates, those import intermodal rates have to be at the low end of the RVC spectrum.

Contrast that with domestic intermodal. There are many domestic intermodal terminals that are geographically captive to one Class I. The only other options available would require an expensive long truck haul to an alternate intermodal terminal, so the rate alternative would also be high. The monopoly Class I can charge rates from these terminals that are much higher than those rates from import intermodal terminals. And as you point out, since much domestic intermodal is time sensitive aka UPS, the rates for those shipments are on the high end of the RVC spectrum. Yeah, those time sensitive trains will use more fuel, but their crews are less likely to go dead, so the variable costs attributed to those trains cannot be that much higher. I guess if you count the delays to other trains going in the hole for the hotshots as a variable cost of the hothsot, you could make an arguement for a higher VC for the hotshots. But the rates the railroads can charge for hotshots are as high as any such rates can be, because the only alternatives are long haul trucks or airlines, so the rates can be just below those higher cost alternatives.

I know BNSF has turned down more UPS business. They terminated the Swift RoadRailers. They are making business decisions that are not making sense. There is no way they can charge rate that exceeds the RVC standard of 180% on import intermodal no matter how much they try to minimize VC on those doublestacks, because there is just too much competition from other railroads and other shipping options to allow any profit mazimization. They are ordering more and more double stack wells. Those new equipment purchases cost money. They are spending an awful lot of money on increasing capacity on the LA to Chicago corridor. That is costing a pretty penny. If we attribute those expenditures as a portion of the doublestack VC, there is no way they are much above recouping 100% of RVC. And I suspect they may actually be below the 100% RVC on those double stack trains if we include the costs of capacity improvements and equipment purchases. We know they're not buying more spine cars for domestic TOFC, there seems to be plenty of those still sitting around stored on various sidings.

Right Dave, CP just stopped handling TOFC traffic completely, if it isn't in a can they won't handle it. BNSF hasn't gotten there yet but they might. Don't forget that just because its a container doesn't necessarily mean its import business.
CP moves lots of domestic business in containers. And if you need to move freight to the West Coast, Maersk, COSCO, Hanjin, Evergreen would love to ship it in one of their boxes even if it isn't leaving the country, saves them paying to move empty boxes. I realize Dave that all six of the Class Is are nuts and you know best.

[Murphy Siding]

QUOTE: Originally posted by futuremodal
. I don't forsee any cutthroat rates coming down the pike with DM&E's entry to the PRB.

I don't see it coming either. The *possibility* of cutthroat rates may be enough to scare off private investors.

[Anonymous]

QUOTE: Originally posted by nanaimo73

QUOTE: Originally posted by a Forummember

Until the CN's Prince George container port comes on line, there are no captive container ports in North America.

Except Halifax.

Yep, my oversight. Thanks for the correction.

The problem for Halifax and Prince George is that they are kinda out of the way, they will never be the prefered first, second, or third ports of call for their respective coasts and geographic service regions. If I remember correctly, Halifax has had a hard time retaining any importance as a major container port due to an on going spat with CN. And the story on the new Prince George container port is that they are soley being seen as an overflow port for Vancouver. Are any container lines even willing to make more than a token port of call once in a while at Prince George?

[nanaimo73]

QUOTE: Originally posted by a Forummember

Until the CN's Prince George container port comes on line, there are no captive container ports in North America.

Except Halifax.

[Anonymous]

QUOTE: Originally posted by nanaimo73

QUOTE: Originally posted by PNWRMNM

How is DME to make any money hauling coal out of the PRB?

...with a route twice as long to Kansas City (and KCS)?

What's KC got to do with it? Wouldn't most interchange with the eastern railroads occur north of KC?

Also, perhaps DM&E has lower overall VC with it's SOP than BNSF and UP, which would allow them a lower RVC than the STB's 180% standard.

All we do know is that demand for PRB coal is exceeding the ability of BNSF and UP to deliver it. A third PRB railroad may only provide an equalibrium to the supply demand shortfall. I don't forsee any cutthroat rates coming down the pike with DM&E's entry to the PRB.

[Anonymous]

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by futuremodal


Show me any railroad profits sheets where coal is being hauled at 102% of variable cost. You're confusing coal hauling with import intermodal. Import intermodal is where railroads can't come close to meeting revenue adequacy (which doesn't explain why most capacity investments are going to improve the import intermodal corridors).

Most power plants are captive, even if the source of the coal is not. Therefore, DM&E will be able to charge a rate that is more than adequate to cover it's portion of the investment.

One other thing Dave, don't assume that Import Intermodal is as revenue inadequate as you presume, relative to its costs it is much better than Domestic Intermodal. The speeds harmonize better with other traffic, unlike the UPS bullets where costs of failure and disruption to other traffic more than offset the potentially higher revenues, after all the containers just spent two plus weeks on a ship that may have been delayed by storms. as long as the train isn't days late the shipper isn't going to get too nervous. You must have noticed that BNSF took a pass on the UPS business when UPS wanted fast trains from LA to Chicago.

beaulieu, the difference between Import Intermodal and Domestic Intermodal is that all import intermodal has competitive rail access at all major seaside container ports. Furthermore, overseas importers have a multitude of options regarding which combination of container lines and container ports to utilize. And finally most major US consumption markets are either located seaside, or located within a shorthaul of the major waterways (which all seem to be paralelled by at least three Class I's). Until the CN's Prince George container port comes on line, there are no captive container ports in North America.

The point is, since all import intermodal has competition driving down rates, those import intermodal rates have to be at the low end of the RVC spectrum.

Contrast that with domestic intermodal. There are many domestic intermodal terminals that are geographically captive to one Class I. The only other options available would require an expensive long truck haul to an alternate intermodal terminal, so the rate alternative would also be high. The monopoly Class I can charge rates from these terminals that are much higher than those rates from import intermodal terminals. And as you point out, since much domestic intermodal is time sensitive aka UPS, the rates for those shipments are on the high end of the RVC spectrum. Yeah, those time sensitive trains will use more fuel, but their crews are less likely to go dead, so the variable costs attributed to those trains cannot be that much higher. I guess if you count the delays to other trains going in the hole for the hotshots as a variable cost of the hothsot, you could make an arguement for a higher VC for the hotshots. But the rates the railroads can charge for hotshots are as high as any such rates can be, because the only alternatives are long haul trucks or airlines, so the rates can be just below those higher cost alternatives.

I know BNSF has turned down more UPS business. They terminated the Swift RoadRailers. They are making business decisions that are not making sense. There is no way they can charge rate that exceeds the RVC standard of 180% on import intermodal no matter how much they try to minimize VC on those doublestacks, because there is just too much competition from other railroads and other shipping options to allow any profit mazimization. They are ordering more and more double stack wells. Those new equipment purchases cost money. They are spending an awful lot of money on increasing capacity on the LA to Chicago corridor. That is costing a pretty penny. If we attribute those expenditures as a portion of the doublestack VC, there is no way they are much above recouping 100% of RVC. And I suspect they may actually be below the 100% RVC on those double stack trains if we include the costs of capacity improvements and equipment purchases. We know they're not buying more spine cars for domestic TOFC, there seems to be plenty of those still sitting around stored on various sidings.

[Murphy Siding]

QUOTE: Originally posted by nanaimo73

QUOTE: Originally posted by PNWRMNM

How is DME to make any money hauling coal out of the PRB?

...with a route twice as long to Kansas City (and KCS)?

Darn that logic thing again![;)]

[nanaimo73]

QUOTE: Originally posted by PNWRMNM

How is DME to make any money hauling coal out of the PRB?

...with a route twice as long to Kansas City (and KCS)?

[PNWRMNM]

Future,

You are correct in part. The CURE data does not give RVC data for coal per se.

I am correct in using the 102% RVC as repersentative of competitive traffic, BNSF was 100.6 and UP 106.5 which would average 103%.

Coal is the railroads largest single tonnage by far, accounting for 21% of revenues at per ton rates of 1/2 to 1/3 (round numbers) of the other commodites specifically listed.

In the absense of other data, and for the purpose of this discussion, I see no reason to assume the RVC on coal is different than all traffic.

My question stands. How is DME to make any money hauling coal out of the PRB?

Mac

[beaulieu]

QUOTE: Originally posted by futuremodal


Show me any railroad profits sheets where coal is being hauled at 102% of variable cost. You're confusing coal hauling with import intermodal. Import intermodal is where railroads can't come close to meeting revenue adequacy (which doesn't explain why most capacity investments are going to improve the import intermodal corridors).

Most power plants are captive, even if the source of the coal is not. Therefore, DM&E will be able to charge a rate that is more than adequate to cover it's portion of the investment.

One other thing Dave, don't assume that Import Intermodal is as revenue inadequate as you presume, relative to its costs it is much better than Domestic Intermodal. The speeds harmonize better with other traffic, unlike the UPS bullets where costs of failure and disruption to other traffic more than offset the potentially higher revenues, after all the containers just spent two plus weeks on a ship that may have been delayed by storms. as long as the train isn't days late the shipper isn't going to get too nervous. You must have noticed that BNSF took a pass on the UPS business when UPS wanted fast trains from LA to Chicago.

[Anonymous]

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by PNWRMNM

Future,

I presume you would agree that DME coal will all be rail competitive. How is DME going to show any profit hauling competitive coal at 102% of variable cost, even with RRIF funding?

Mac

Show me any railroad profits sheets where coal is being hauled at 102% of variable cost. You're confusing coal hauling with import intermodal. Import intermodal is where railroads can't come close to meeting revenue adequacy (which doesn't explain why most capacity investments are going to improve the import intermodal corridors).

Most power plants are captive, even if the source of the coal is not. Therefore, DM&E will be able to charge a rate that is more than adequate to cover it's portion of the investment.

The trouble for DM&E is that there are no captive powerplants of any size on its lines, and only one on the IC&E.

DM&E may not have a number of captive plants (yet), but if the theories regarding DM&E being a planned conduit for the other Class I's sans UP and BNSF, then they may still be the recipient of a portion of a captive rate of one of it's connections.

My understanding is that coal RVC numbers are higher than RVC numbers for other commodities, regardless of the ratio of captive to non-captive coal customers. Hauling coal in unit trains makes money for the railroad even if it's customers have a competitive hedge with another railroad's connection. The variable costs associated with unit trains are much lower than other commodity hauls, so the RVC ration should always be relatively high.

Plus, we are in a period of rising demand for coal. It is an interesting take on the old supply-demand theories, in that the supply of coal is as high as the demand for coal (which in theory would keep prices constant), yet the railroad bottlenecks have serverly restricted the ability to have that ample supply of coal delivered to the customers. Neither BNSF nor UP can add capacity fast enough, nor do they seem to want to add coal hauling capacity all that badly, so DM&E's PRB project looks like it is being timed perfectly.

[Anonymous]

QUOTE: Originally posted by PNWRMNM

Future,

Go look at the CURE website where they show the carrier's discrimination against captive coal. You have given us the reference before. Look at the ratio for competitive coal. The 102% is a representative number.

Mac

NO! You are confusing the RVC (revenues to variable costs) percentages with the percentage differential between captive and non-captive coal rates. The CURE website shows the per ton rates of captive coal shipments can be over 100% of the per ton rates of non-captive coal shipments. For BNSF the average percentage difference is 136% between captive and non-captive coal shipments. For UP it is 101%.

The CURE website gives no numbers on the RVC ratios for captive vs non-captive coal. It only gives the average RVC between all captive and non-captive customers, using the STB's 180% standard as the dividing line. For BNSF, the RVC for captive customers is 238.1%, for non-captive customers the RVC is 100.6%. For UP, the RVC for captives is 239.8%, for non-captives 106.5%. The figures are from a 2001 RSAM study.

[PNWRMNM]

Future,

Go look at the CURE website where they show the carrier's discrimination against captive coal. You have given us the reference before. Look at the ratio for competitive coal. The 102% is a representative number.

Mac

[Murphy Siding]

QUOTE: Originally posted by PNWRMNM

Murphy,

The marketing guys may not be disciplined enough to get above 102% but they are disciplined enough not to go under 100% of their own cost. That is why mileage and ruling grade count, they mightily influence your costs, and the other guys.

Mac

I wasn't thinking of DM&E's marketing, I was thinking of BNSF's marketing.[}:)]

[beaulieu]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by PNWRMNM

Future,

I presume you would agree that DME coal will all be rail competitive. How is DME going to show any profit hauling competitive coal at 102% of variable cost, even with RRIF funding?

Mac

Show me any railroad profits sheets where coal is being hauled at 102% of variable cost. You're confusing coal hauling with import intermodal. Import intermodal is where railroads can't come close to meeting revenue adequacy (which doesn't explain why most capacity investments are going to improve the import intermodal corridors).

Most power plants are captive, even if the source of the coal is not. Therefore, DM&E will be able to charge a rate that is more than adequate to cover it's portion of the investment.

The trouble for DM&E is that there are no captive powerplants of any size on its lines, and only one on the IC&E.

[Anonymous]

QUOTE: Originally posted by PNWRMNM

Future,

I presume you would agree that DME coal will all be rail competitive. How is DME going to show any profit hauling competitive coal at 102% of variable cost, even with RRIF funding?

Mac

Show me any railroad profits sheets where coal is being hauled at 102% of variable cost. You're confusing coal hauling with import intermodal. Import intermodal is where railroads can't come close to meeting revenue adequacy (which doesn't explain why most capacity investments are going to improve the import intermodal corridors).

Most power plants are captive, even if the source of the coal is not. Therefore, DM&E will be able to charge a rate that is more than adequate to cover it's portion of the investment.

[PNWRMNM]

Murphy,

The marketing guys may not be disciplined enough to get above 102% but they are disciplined enough not to go under 100% of their own cost. That is why mileage and ruling grade count, they mightily influence your costs, and the other guys.

Mac

[Murphy Siding]

QUOTE: Originally posted by PNWRMNM

Future,

I presume you would agree that DME coal will all be rail competitive. How is DME going to show any profit hauling competitive coal at 102% of variable cost, even with RRIF funding?

Mac

You see that as a problem too?[;)] Wait until someone plays the cut-throat. and 102% drops to 90% or 75%?[:-,]

[PNWRMNM]

Future,

I presume you would agree that DME coal will all be rail competitive. How is DME going to show any profit hauling competitive coal at 102% of variable cost, even with RRIF funding?

Mac

[Anonymous]

QUOTE: Originally posted by spbed

Is the BNSF getting public money to build that 3rd main track from East Barstow towards Daggett they are now building[?][

QUOTE: Originally posted by futuremodal

Off topic: I know the writer of the article, Peter Harriman. He was one of my old running chums back in Moscow ID.

On topic: Of course DME will need public funds. All rail projects today use public funds. And given the liabilities private debt holders would face if the current pro-coal Congress and Admininstration were replaced by an anti-coal party, it's not suprising private cash was scarce for this project.

C'mon Spbed, surely you can tell the difference between adding capacity to an existing line vs building an entirely new line from scratch, right?

But just for the sake of dissection, from the other forums you know that BNSF is using it's excess profits from gouging Montana and North Dakota grain growers (e.g. our fellow Americans) and using those profits to add capacity to it's Chinese import corridors. Those grain growers, in response to the lack of net revenue from the sale of those crops (with one third to one half of their crop income going to pay BNSF's transport rates), will be more likely to access agricultural subsidies. BNSF is also gouging it's captive coal customers and chemical shippers, so those customers must access the newly available Energy Bill funds to pay for new projects.

So it can be argued that some ag subsidies and energy bill subsidies are really indirect subsidies for railroads, since most railroads out west make the bulk of thier income off either farmers or utilities. Or to put it another way, eliminate all ag subsidies and energy subsidies, and what do you think happens to the railroads? Quite simply, they go broke, because the *revenues* from intermodal don't even cover the STB's revenue adaquacy standard.

Add to that the neo-subsidy which comes in the form of anti-trust exemption (an exemption not enjoyed by any other industry in the US except for the railroads), and of course the continuing impact of the original land grants, and we got quite an array of various forms of public support for railroads.

So is BNSF getting public money for their Chinese import corridor expansion projects? Absolutely, but not in the classic sense of the direct subsidy or loan. DM&E is just taking it's place at the trough along with the current Class I's. I say more power to them.

[spbed]

Is the BNSF getting public money to build that 3rd main track from East Barstow towards Daggett they are now building[?][

QUOTE: Originally posted by futuremodal

Off topic: I know the writer of the article, Peter Harriman. He was one of my old running chums back in Moscow ID.

On topic: Of course DME will need public funds. All rail projects today use public funds. And given the liabilities private debt holders would face if the current pro-coal Congress and Admininstration were replaced by an anti-coal party, it's not suprising private cash was scarce for this project.

[CSSHEGEWISCH]

If we need to wait for Federal financing to build this line, then this project will take forever to be built. The CREATE program for Chicago only got a fraction of what was needed and that's just for upgrading so it's debatable whether funding for another line to the Powder River Basin will see a dime.

FM seems to be meeting himself coming in the other direction: He decries Federal environmental regulations in other postings yet he expects the Fed to come through for projects that the private sector won't fund.

[bobwilcox]

QUOTE: Originally posted by Murphy Siding

Among other things, the writer says that the state would get money from every ton of coal hauled through the state. Anybody have an idea what that would be about? I don't think any state levies a *transit tax?* on goods moving by rails that happen to be inside their borders, do they?

Minnesota had a ton-mile tax on rail customers twenty years ago. I don't know if still have the tax.

[Anonymous]

QUOTE: Originally posted by CSSHEGEWISCH

I'll believe that the line into the Powder River Basin is going to be built when I see the contracts being put out for bid. Since there hasn't been any great ru***o lend money to DM&E at a reasonable rate, I don't think that the line will ever be built, unless FM has some financiers lined up that nobody else knows about.

Well, the more things change the more they stay the same.

No one rushed to finance the original transcons either. Given the overwhelming increase in risk associated with new capital intesive projects since those days a century and more ago, it's not suprising we need the feds to step in for financing.

[Murphy Siding]

Today's Argus Leader features a local resident's glowing enthusiastic belief that the DM&E's PRB line will be the cat's meow for SD. Among other things, the writer says that the state would get money from every ton of coal hauled through the state. Anybody have an idea what that would be about? I don't think any state levies a *transit tax?* on goods moving by rails that happen to be inside their borders, do they?

[fuzzybroken]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal


3. A rehab of 150 track miles on the DM&E’s western end between Wall, S.D., and Colony, WY*


Of those four separate projects, the one I find most intriging is actually the rehab of the Colony line, since this line represents the best shot of accessing Montana's PRB resources, as well as "reaching out" to a possible connection with the MRL. Remember, The Washington Group (which owns MRL) was the entity that sold the IC&E to Cedar River Holdings, and as such they may still have an interest in those lines as a way to free up MRL from being captive to BNSF's whims.

[(-D][(-D][(-D] I'm sorry man, but that's a longshot even bigger than the PRB extention.

True as that may be, it's still neat to consider the possibilities. No one thought DME wuld ever pull off the PRB extension but... oh wait, it hasn't been built yet... [:I]

[CSSHEGEWISCH]

I'll believe that the line into the Powder River Basin is going to be built when I see the contracts being put out for bid. Since there hasn't been any great ru***o lend money to DM&E at a reasonable rate, I don't think that the line will ever be built, unless FM has some financiers lined up that nobody else knows about.

[Murphy Siding]

Or DME trying to find any money possible, to keep the railroad from disappearing into the prairie.

[nanaimo73]

I thought this was more like a step backward, with DME realising it must look for government financing as a last resort.

[mheilmann]

I've been watching for this since the announcement in '97. Anyone know about infrastructure plans? For example: CTC signaling or GPS as Alaska RR is experimenting with? Asphalt sub-roadbed as per BNSF in Texas/Oklahoma?

[Anonymous]

QUOTE: Originally posted by nanaimo73

QUOTE: Originally posted by futuremodal

3. A rehab of 150 track miles on the DM&E’s western end between Wall, S.D., and Colony, WY
Of those four separate projects, the one I find most intriging is actually the rehab of the Colony line, since this line represents the best shot of accessing Montana's PRB resources, as well as "reaching out" to a possible connection with the MRL.

FM-
It is about 200 miles from Colony to Huntley, and against the lay of the land. There seems to be a large, well organized opposition already in place fighting the stalled Tongue River Railroad.
Would there be a lot of traffic that MRL and DME could interchange ?

I know there were railroad surveys westward from Colony. The lay of the land suggests either a northern routing via Miles City or a southern routing via Gillette.

Opposition to ANY project is simply the cost of doing business these days. Nothing new.

There is an opportunity for railroads to take advantage of the energy bill to justify new trackage that ostensibly serves to feed new energy projects. There are several coal fired projects prelimanarily planned or in existence in Montana, some accessable to MRL. For MRL to get this business, they are completely dependent on BNSF. As it is now, BNSF would likely serve any such plant located on MRL, with MRL getting a track use fee. With utilities becoming ever more cognizant of the risks associated with being a captive shipper, some of these proposals may not opt for an MRL location if MRL is itself captive to BNSF. If MRL had it's own link into PRB, or an alternate PRB link besides BNSF, they could then offer the prospect of competitive rate offerings to prospective on line clients.

Yeah, it's a long shot.

[Murphy Siding]

QUOTE: Originally posted by futuremodal


3. A rehab of 150 track miles on the DM&E’s western end between Wall, S.D., and Colony, WY*


Of those four separate projects, the one I find most intriging is actually the rehab of the Colony line, since this line represents the best shot of accessing Montana's PRB resources, as well as "reaching out" to a possible connection with the MRL. Remember, The Washington Group (which owns MRL) was the entity that sold the IC&E to Cedar River Holdings, and as such they may still have an interest in those lines as a way to free up MRL from being captive to BNSF's whims.

[(-D][(-D][(-D] I'm sorry man, but that's a longshot even bigger than the PRB extention.

[nanaimo73]

QUOTE: Originally posted by futuremodal

3. A rehab of 150 track miles on the DM&E’s western end between Wall, S.D., and Colony, WY
Of those four separate projects, the one I find most intriging is actually the rehab of the Colony line, since this line represents the best shot of accessing Montana's PRB resources, as well as "reaching out" to a possible connection with the MRL.

FM-
It is about 200 miles from Colony to Huntley, and against the lay of the land. There seems to be a large, well organized opposition already in place fighting the stalled Tongue River Railroad.
Would there be a lot of traffic that MRL and DME could interchange ?

[Anonymous]

It should be noted that the 2.5 billion is for more than just the PRB extension:

http://www.progressiverailroading.com/freightnews/article.asp?id=7796

The $2.5 billion is earmarked for -
1. The 262.3-mile extension into the PRB and an upgrade of 600 miles of other potential coal-hauling lines
2. An upgrade of 250 track miles on the IC&E
3. A rehab of 150 track miles on the DM&E’s western end between Wall, S.D., and Colony, WY*
4. An upgrade of 30 track miles on IC&E’s Marquette IA line

Of those four separate projects, the one I find most intriging is actually the rehab of the Colony line, since this line represents the best shot of accessing Montana's PRB resources, as well as "reaching out" to a possible connection with the MRL. Remember, The Washington Group (which owns MRL) was the entity that sold the IC&E to Cedar River Holdings, and as such they may still have an interest in those lines as a way to free up MRL from being captive to BNSF's whims.

[beaulieu]

QUOTE: Originally posted by Murphy Siding

I thought there was one in Sherburn, MN still?

Natural Gas burner, the only rail traffic to the plant is the rare transformer.

[Murphy Siding]

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by Murphy Siding

Wouldn't you think there would be a power plant somewhere closer to Heron Lake, that they could team up with? What kind of transload facility is at Marshaltown?

Thanks

It is a purpose built facility owned by Alliant Energy one of the big Electric Companies. They have a couple of small powerplants in the area, none of which are large enough for unit train service. Plus Iowa State University gets coal for its heating plant there, and one of the cement plants at Mason City gets its coal there.
BTW the only coal fired powerplants that might be closer are at Sergeant Bluff, IA or Minneapolis, MN.

I thought there was one in Sherburn, MN still?

[beaulieu]

QUOTE: Originally posted by Murphy Siding

Wouldn't you think there would be a power plant somewhere closer to Heron Lake, that they could team up with? What kind of transload facility is at Marshaltown?

Thanks

It is a purpose built facility owned by Alliant Energy one of the big Electric Companies. They have a couple of small powerplants in the area, none of which are large enough for unit train service. Plus Iowa State University gets coal for its heating plant there, and one of the cement plants at Mason City gets its coal there.
BTW the only coal fired powerplants that might be closer are at Sergeant Bluff, IA or Minneapolis, MN.

[MP173]

With a ROI which Exxon commands, Lee Raymond will be extremely slow to invest. That is one heck of a company. He is a top notch CEO. I hope he is grooming his successor well.

ed

[Murphy Siding]

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by gabe

The lack of private investment says it all. Railroads are already undercutting one another for better rates in the Powder River Basin, this will just make things worse. I think this is going to go down in history as a collasal blunder with lobyists and power companies to blame.

Gabe

Skeptic me wonders if it will ever get done? As a side note: On a recent thread about bio-diesel in ND, I asked why none of the ethanol plants were coal-fired. This seemed like a perfect compliment for rail operations to me. The newspaper mentions just that thought, without elaboration. Do you think someone is reading this message board, and **stealing** my thoughts?[:-,][}:)]

Murphy, the new Ethanol plant going in at Heron Lake, MN is going to be coal powered. One of the problems with using coal is that none of the facilities are big enough to receive unit train loads of coal which is the only way to get a good price. Also you need a large area to dump the coal onto. Heron Lake will purchase its coal jointly with other customer via the transload facility near Marshaltown, IA it will be trucked in from there.

Wouldn't you think there would be a power plant somewhere closer to Heron Lake, that they could team up with? What kind of transload facility is at Marshaltown?

Thanks

[nanaimo73]

QUOTE: Originally posted by eastside

When wind power and tar sands start to become discussed seriously as competitive sources of energy and viable investments (remember the last time?), it's time for investors in energy stocks to start heading for the hills.

Projects under way or announced in Alberta's Tar Sands currently total $100 billion dollars. That's the biggest project on the planet. Canada is second in the world in proven oil reserves.

[eastside]

QUOTE: Originally posted by gabe

The lack of private investment says it all. Railroads are already undercutting one another for better rates in the Powder River Basin, this will just make things worse. I think this is going to go down in history as a collasal blunder with lobyists and power companies to blame.

Indeed, the fact that the banks and energy companies aren't lining up to fund the project says volumes. The energy industry is highly sensitive to the economic cycle. I think the current cycle is nearly past its peak and the energy industry is about to enter the bust phase of the economic cycle. When wind power and tar sands start to become discussed seriously as competitive sources of energy and viable investments (remember the last time?), it's time for investors in energy stocks to start heading for the hills.

Lee Raymond, Exxon Mobil's CEO, was interviewed on the PBS show Charlie Rose tonight. He mentioned that they've been slow to invest because Exxon has had a difficult time finding attractive projects. I think he means that they're shrewd enough to realize the good times are about to come to an end.

[Anonymous]

QUOTE: Originally posted by Swafford

You just may be right but don’t forget the UP and BNSF. They may want to keep their monopoly on the Powder River Basin!

Best regards,
Swafford

MAYBE, JUST MABE and from deep left field. There might just be another couple or three railroads from the East that might be sneaky enough to do something completly un-orthodox, off the wall and totally original. This would of course be much to the questioning and wonderment of the two giants of the West. Now that would be a truly intersesting development. Not likely to happen, but interesting.

[Murphy Siding]

QUOTE: Originally posted by futuremodal

If indeed BNSF and UP are competitors for PRB coal haulage, then they are a duopoly. If there is collusion between BNSF and UP to manipulate rates higher, the effect is monopolistic.

I agree.

Have you worked out that story problem about the loan repayment yet?[:)]

[Anonymous]

If indeed BNSF and UP are competitors for PRB coal haulage, then they are a duopoly. If there is collusion between BNSF and UP to manipulate rates higher, the effect is monopolistic.

[Murphy Siding]

QUOTE: Originally posted by Swafford

You just may be right but don’t forget the UP and BNSF. They may want to keep their monopoly on the Powder River Basin!

Best regards,
Swafford

If the definition of monopoly means one (mono) having it all to itself, how could two ( BNSF & UP ) have a monopoly in the PRB?

[Anonymous]

Lots of info on the DM&E website
http://www.dmerail.com/PRB%20Project.html

Scroll down that page for maps
http://www.dmerail.com/PRB/C1MapSD.htm

[Murphy Siding]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by gabe

The lack of private investment says it all. Railroads are already undercutting one another for better rates in the Powder River Basin, this will just make things worse. I think this is going to go down in history as a collasal blunder with lobyists and power companies to blame.

Gabe

Rates out of the PRB are going up, because demand is exceeding the railroads' ability to deliver. The reason for the lack of private investment is due to the political nature of coal. This project has to have long term ROI's just by it's nature, 20 or 30 years. Who knows, in ten years we might be back to politicians seeing coal as an anachronism. Perhaps coal gasification technologies will become much more commerially viable than is predicted, and since gasification precludes the need for low sulfer coals, demand for PRB coal might diminish, making the DME project superfluous.

And the idea of new rail construction "making things worse" is straight from the AAR subtext. It does make things worse if you are a monopolist, it makes things better if the railroad industry wants to actually increase business coverage.

Dave: If DM&E captured 1/2 of the PRB coal business from BNSF & UP, how long would it take to pay off the $2.5 Billion loan from Uncle Sam, if they were given the best terms imaginable?

[Anonymous]

QUOTE: Originally posted by gabe

The lack of private investment says it all. Railroads are already undercutting one another for better rates in the Powder River Basin, this will just make things worse. I think this is going to go down in history as a collasal blunder with lobyists and power companies to blame.

Gabe

Rates out of the PRB are going up, because demand is exceeding the railroads' ability to deliver. The reason for the lack of private investment is due to the political nature of coal. This project has to have long term ROI's just by it's nature, 20 or 30 years. Who knows, in ten years we might be back to politicians seeing coal as an anachronism. Perhaps coal gasification technologies will become much more commerially viable than is predicted, and since gasification precludes the need for low sulfer coals, demand for PRB coal might diminish, making the DME project superfluous.

And the idea of new rail construction "making things worse" is straight from the AAR subtext. It does make things worse if you are a monopolist, it makes things better if the railroad industry wants to actually increase business coverage.

[coborn35]

That is true.

[Anonymous]

You just may be right but don’t forget the UP and BNSF. They may want to keep their monopoly on the Powder River Basin!

Best regards,
Swafford

[coborn35]

True, it would be nice to see that small railroad with some big power. in the same breath, as soon as they do all this, they will probably be bought by CN or CP or something so they can get coal access.

[Anonymous]

Since Diesel Locomotives are an asset. I doubt they will have any trouble with financing. EMD needs to sell a lot of
SD70Ace’s and SD70M-2’s.


Best regards,
Swafford

[coborn35]

With all the money they will be spending to buy the lne, where will they find the money to buy new locomitves??

[Anonymous]

Project Overview Map

http://www.dmerail.com/PRB/Projectoverview%20Map.htm

[beaulieu]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by gabe

The lack of private investment says it all. Railroads are already undercutting one another for better rates in the Powder River Basin, this will just make things worse. I think this is going to go down in history as a collasal blunder with lobyists and power companies to blame.

Gabe

Skeptic me wonders if it will ever get done? As a side note: On a recent thread about bio-diesel in ND, I asked why none of the ethanol plants were coal-fired. This seemed like a perfect compliment for rail operations to me. The newspaper mentions just that thought, without elaboration. Do you think someone is reading this message board, and **stealing** my thoughts?[:-,][}:)]

Murphy, the new Ethanol plant going in at Heron Lake, MN is going to be coal powered. One of the problems with using coal is that none of the facilities are big enough to receive unit train loads of coal which is the only way to get a good price. Also you need a large area to dump the coal onto. Heron Lake will purchase its coal jointly with other customer via the transload facility near Marshaltown, IA it will be trucked in from there.

[Murphy Siding]

QUOTE: Originally posted by gabe

The lack of private investment says it all. Railroads are already undercutting one another for better rates in the Powder River Basin, this will just make things worse. I think this is going to go down in history as a collasal blunder with lobyists and power companies to blame.

Gabe

Skeptic me wonders if it will ever get done? As a side note: On a recent thread about bio-diesel in ND, I asked why none of the ethanol plants were coal-fired. This seemed like a perfect compliment for rail operations to me. The newspaper mentions just that thought, without elaboration. Do you think someone is reading this message board, and **stealing** my thoughts?[:-,][}:)]

[Murphy Siding]

QUOTE: Originally posted by blhanel

QUOTE: Originally posted by smalling_60626

as proposed the line would have swung south from Kadoka/Wall area (I think I remember) to hook up with the PRB triple. Which turned out not to be the best idea, maybe, because of the devastation??

No kidding! How would they avoid the badlands?

I think the plan is to swing southwest out of Wall, as it does now, to the Cheyene river and follow it southwest. This would skirt the west edge of the Badlands. The Milwaukee Road line went southwest from Kadoka through the Badlands

[gabe]

The lack of private investment says it all. Railroads are already undercutting one another for better rates in the Powder River Basin, this will just make things worse. I think this is going to go down in history as a collasal blunder with lobyists and power companies to blame.

Gabe

[blhanel]

QUOTE: Originally posted by smalling_60626

as proposed the line would have swung south from Kadoka/Wall area (I think I remember) to hook up with the PRB triple. Which turned out not to be the best idea, maybe, because of the devastation??

No kidding! How would they avoid the badlands?

[PNWRMNM]

FM

Another departure from reality "all railroad projects today use public funds". If that is so why is BNSF speendin over $1billion a year for maintenance plus over $900 million per year for capitalized fixed plant projects, just to pick an easy to check example?

Mac

[Anonymous]

Isn't government funny? Several years ago we had two federal cabinet-level agencies at war with one another. Dept. of Commerce was for the rail line; Dept. of Interior against because as proposed the line would have swung south from Kadoka/Wall area (I think I remember) to hook up with the PRB triple. Which turned out not to be the best idea, maybe, because of the devastation?? On the one hand the "dueling departments" represents some of the worst of government; on the other, they were merely protecting their constituencies.

Just for one day I'd like to be a railroad magnate and have my own private car(s)! I saw a photo of Kevin Schieffer's cars and they looked beautiful. Does anyone know who originally made them and whether they're still for rent today???

[mudchicken]

DM&E is looking for financing at a more favorable rate. The cost of money on a project that big is a big part of the issue. (that and the Utilities that were promising to bankroll the project for so long are now showing their true colors [}:)] )

[banghead][banghead][banghead]

[Murphy Siding]

QUOTE: Originally posted by futuremodal

Off topic: I know the writer of the article, Peter Harriman. He was one of my old running chums back in Moscow ID.

On topic: Of course DME will need public funds. All rail projects today use public funds. And given the liabilities private debt holders would face if the current pro-coal Congress and Admininstration were replaced by an anti-coal party, it's not suprising private cash was scarce for this project.

If DM&E couldn't find private funding, what does this say about the economic viability of such an undertaking?

[Murphy Siding]

QUOTE: Originally posted by smalling_60626

Does this mean the DM&E won't have to connect with the UP/BNSF line into PRB -- the one that had the washouts? Is the proposed route the original route by Rapid City and Belle Fourche?

I believe the plan is to run an entirely new line south of the Black Hills ( Belle Fourche is in the northern edge of the hills) to connect with the BNSF/UP line.

[Anonymous]

Off topic: I know the writer of the article, Peter Harriman. He was one of my old running chums back in Moscow ID.

On topic: Of course DME will need public funds. All rail projects today use public funds. And given the liabilities private debt holders would face if the current pro-coal Congress and Admininstration were replaced by an anti-coal party, it's not suprising private cash was scarce for this project.

[Anonymous]

Does this mean the DM&E won't have to connect with the UP/BNSF line into PRB -- the one that had the washouts? Is the proposed route the original route by Rapid City and Belle Fourche?

[oskar]

that is great I love it when there is a topic in the paper or news




kevin

[coborn35]

They are going to need some more horses to run coal trains.

[jeaton]

Here is the link.

http://www.argusleader.com/apps/pbcs.dll/article?AID=/20051106/NEWS/511060307/1001

[nanaimo73]

http://www.argusleader.com/apps/pbcs.dll/article?AID=/20051106/NEWS/511060307/1001

QUOTE: Originally posted by joegreen

So if they do get the coal line then will they send that coal to Chicago? I'm wondering because I do a lot of railfanning on the IC&E and I'd like to know if they will go to Chicago that way.

DME's original plan was to take the coal to the grain barge terminal on the Mississippi at Winona which would be modified to also handle coal.

QUOTE: I bet DM&E will have to buy a lot of coal hoppers if they get the line.

The utility companies will provide those.

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

[joegreen]

So if they do get the coal line then will they send that coal to Chiago?I'm wondering because I do alot of railfanning on the IC&E and I'd like to know if they will go to Chicago that way.

I bet DM&E will have to buy alot of coal hoppers if the get the line.