Rapid City to Huron manifest train awaits clearance to depart
Philip, South Dakota on January 18, 2011. Rick Mills photo
Canadian Pacific talks of Powder River Basin Access
January 27, 2011
(from TRAINS Magazine web site)
CALGARY, Alta. — A Canadian Pacific official said President Obama’s nod to “clean coal” technology could lead to the railroad tapping the Wyoming Powder River Basin coalfields, Toronto’s Globe & Mail has reported. CP’s Dakota, Minnesota & Eastern subsidiary holds the regulatory authority necessary to construct a new line into the basin.
“The coal market is what’s really been driving the overall business case,” said Kathryn McQuade, CP’s chief financial officer. “That’s still a work in progress.”
CP purchased DM&E for $1.48 billion in 2008, and extending the line from western South Dakota into the coalfields would likely cost an additional $6 billion. The future of coal is uncertain at best, due to potential future environmental regulations. And while Powder River coal is low in sulfur, giving it an environmental advantage over eastern coal, demand for it hasn’t grown as quickly in recent years as it has in the past.
McQuade said CP would likely only build into the basin if it found a partner willing to invest in the project. Those could include utilities, construction companies, financial institutions, or another railroad. Though it holds the permits, CP would need to acquire land and rights-of-way into the major coal mines in the basin. Currently, Union Pacific and BNSF Railway serve the mines off a jointly owned route built in the 1970s.