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11/19/2001



Rail News: Rail Industry Trends

STB issues final EIS on DM&E project, final decision might come in 45 to 60 days


As promised, Surface Transportation Board Nov. 19 released its final Environmental Impact Statement (EIS) on Dakota, Minnesota & Eastern Railroad Corp.'s (DM&E) proposed $1.5 billion Powder River Basin expansion project.
The final EIS brings DM&E one step closer to regulatory approval of its plan to construct 280 track miles in western South Dakota and eastern Wyoming, and upgrade 600 track miles in South Dakota and Minnesota to access Powder River Basin coal mines.
"We haven't had time to review the document as much as we'd like, but so far we haven't come across anything that presents a cost-prohibitive show stopper," said DM&E President and Chief Executive Officer Kevin Schieffer Nov. 19 at a press conference. "It proves the public benefits outweigh environmental costs."
The final EIS estimates that the project's environmental mitigation costs likely would exceed $140 million and offers environmentally-preferable alternatives for DM&E's track construction proposals.
Edison Electric Institute's (EEI) Alliance of Energy Suppliers — an association of U.S. investor-owned electric utilities — welcomed the final EIS.
Currently, only Union Pacific Railroad and Burlington Northern Santa Fe extend into the PRB. EEI officials believe the addition of a third line would spur competition among coal shippers, helping reduce transportation costs by 20 to 30 percent and providing greater access to coal that's 40 percent cheaper than other western sources and 75 percent cheaper than eastern coal.
"By increasing access to low-cost coal and slashing associated shipping charges, power generators could reduce the cost of producing electricity and pass savings on to consumers," said Chuck Linderman, director of energy supply policy for EEI's Alliance of Energy Suppliers, in a prepared statement.
STB next will render a decision to approve, approve with conditions or disapprove the proposed project based on an entire environmental record, including the draft and final EIS, all comments received and Section of Environmental Analysis' recommendations.
Schieffer believes that decision might be made by year-end or in early 2002; STB must wait 30 days after Environmental Protection Agency enters the final EIS in the federal register to issue a decision.
Even after the board makes its final decision, DM&E still will need U.S. Army Corps of Engineers approval for any threats to wetlands, as well as various federal, state and local governments' approval to obtain easements.
"Technically, [STB's decision] isn't the final regulatory decision, but as a practical matter, it'll set the tone," said Schieffer.
Pending the board's final approval, DM&E's three-year project — which would create 5,000 construction jobs and 2,000 permanent positions — still would hinge on settling legal issues, completing design and engineering plans, letting contracts and obtaining funds.
If all approvals are obtained and issues resolved, Schieffer believes construction might start in late 2002, "but 2003 would be the first full construction year."
Jeff Stagl


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