Good News for DM&E

[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.

[Murphy Siding]

BIG articles in today's and yesterday's Sioux Falls, SD Argus Leader. Unfortunately, I have no clue how to post a link. The main gist of the articles is that DM&E will apply for $2.5 Billion loan from Uncle Sam for the line into the Powder River Basin, and line upgrades to run big, fast coal trains through SD and MN. It appears that DM&E has been unsuccessful in obtaining financing in the open market.