Canadian Pacific Railroad
Since the Canadian Pacific announced, last fall, that they had reached an agreement with the Dakota, Minnesota, and Eastern railroad to buy them out for $1.48 billion, there has been a great deal of speculation about its impact across Wyoming, South Dakota and Minnesota.
The Eastside Pioneers Neighborhood Association (ESPNA) is bisected by the Dakota, Minnesota and Eastern (DME) railroad corridor. We have been closely monitoring developments regarding the DME railroad over the years and continue to do so today, especially in light of the Canadian Pacific railroad’s (CPR) proposed acquisition of the DME. We are especially concerned, given the recent behavior of the DME, about the seeming air of inevitability and subsequent atmosphere of concession and mitigation regarding the CPR-DME railroad and the Powder River Basin project.
The ESPNA remains steadfast in our opposition to the introduction of high speed, coal-hauling, hazardous chemical laden unit trains through the heart of our city and neighborhood. We are of the same mindset as many other urban locales across this nation that it is unconscionable to even think of transporting tanker cars full of hazardous chemicals through densely populated cities. From an environmental standpoint we believe, as a growing number of people do, that ramping up a third rail carrier out of the Powder River Basin (PRB) undermines environmental efforts towards stewardship of the environment by condoning the escalation of the dirty fossil fuel industry.
We are alarmed by the course of events surrounding the proposed merger between the CPR and the DME railroads. The Surface Transportation Board’s (STB) denial of the $2.5 billion loan didn’t seem to curb the DME’s infatuation with the risky Powder River Basin project.
It is obvious by recent news accounts from South Dakota and Wyoming that the real prize in the CPR-DME merger, is not the inherently unstable ethanol industry as some have intimated but is instead the Powder River Basin project. Property owners are now fighting a particularly aggressive DME railroad that is seeking to seize their land from them, using a tweaked version of eminent domain legislation that will speed the land condemnation process for railroads in South Dakota
The CPR has consistently stated that they have not made a decision yet regarding the Powder River Basin Project. They have even stated that several significant milestones must be achieved before the project can be justified economically. A few of the requirements that CPR-DME must meet to proceed on the PRB project are acquire all of the necessary rights-of-way, negotiate agreements to access PRB mines on acceptable terms, and shippers must demonstrate a need for PRB coal traffic by entering into transportation contracts to use the CPR-DME route if it is built. Fred Green, CEO of CPR said “If the proposed transaction is approved, CPR will work diligently with DME to satisfy these preconditions to construction of the PRB line.” The CPR said in an October 2007 Wall Street Journal article that“ it will undertake a comprehensive study in the next few years to determine whether to go ahead with the project.”
Confused? The CPR-DME seems to be trying to get the land before the acquisition is approved and the decision is made on the Powder River Basin project. So why the games? It is possible that the CPR does not want to alarm investors that they are swallowing a huge debt and undertaking a great deal of risk by going ahead with the PRB project. Also it is possible that the CPR and the DME are trying to remain under the STB’s radar screen to escape time-consuming and costly regulatory approval on certain aspects of the project. It is also possible that both railroads are trying to lull the opposition to the Powder River Basin project into thinking that they are into the investigational process only rather than proceeding full steam ahead.
It is especially worrisome to also note that even the CPR, a Class I railroad, with a markedly better safety and operational record than the DME, has had a catastrophic accident. Recall the CP anhydrous tanker accident in Minot, ND, six years ago, resulting in one death and several hundred injuries. With this in mind it is rather chilling to read statements made by the CPR regarding the poor condition of the DME railroad. The CPR appears helpless to rectify the situation. The CPR acknowledges that they do not have enough capital on hand to immediately and adequately address the needed improvements. It also seems that there will likely be gaps, for some time in the future, in needed safety implementation and improvements on the CPR-DME railroad corridor.
Current speculation is that the merger will be approved by the STB. The ESPNA does not think that a CPR-DME merger for the sake of resurrecting the Powder River Basin project is in the best public interest. The ESPNA also has serious doubts about the willingness of both railroads to participate in and the STB’s willingness to impose, any meaningful mitigation whatsoever. Finally, the ESPNA has serious concerns about the harsh realities of mitigation on our neighborhood.
For the most current, accurate information available about this very important issue please refer to Track the Truth at this website: www.dmetraintruth.com
