Former Milwaukee Road - Rapid City, SD branch West of Mitchell, SD - Trains Magazine

Fred M Cain

Remember, a few years ago, The CPR planned to revive one of those lines to send their reach into the coal fields in Wyoming. I think maybe it was a shortline that started this (D&M maybe) then the CPR took over.  There was a big fuss over it.  The people of Rochester, MN raised hell over the possibility of coal trains rumbling through town.  There was litigation filed to try and kill the plan.

They fought so hard to stop it that the CPR finally just gave up.  And now with "climate change" anxiety growing among us, the future of Powder River coal looks bleak.

Almost entirely not true.

There is pretty much no actual evidence that CP bought the DM&E to access the Powder River Basin.  At the announcement in 2007, CP stated that any exploration of whether to build into the Powder River Basin "was at least a year off."  By 2012, CP took a $180 million write-off on the all the associated costs (including those from the DM&E) associated with this "proposal."

Of course, the argument could be made that the Great Recession of 2008 harpooned any thoughts of expansion, but the general consensus is that CP acquired the DM&E and subsidiary Iowa, Chicago, and Eastern for the latter's routes, including line from River Jct. (La Crosse) and Chicago to Kansas City.  Kansas City was not only the number 2 railroad location in the country, it also offered a direct connection to KCS.  And the recent announcement of CP's desire to purchase KCS tends to verify such a long-term strategy.  

The City of Rochester, Minnesota and the Mayo Clinic did fight the proposed expansion in the Powder River Basin, but Fred is dead wrong stating "they fought so hard to stop it that the CPR finally just gave up."  The most-heated conflicts were between Mayo and the DM&E, but when the sale of the railroad to the CP was in the works, the Mayo Clinic changed its tune:

Hard to know the real reason for the change of position.  Perhaps it was simply because CP would be a much more formidable opponent than a regional railroad.  Or, could it be that whoever finally got through to Mayo that this project was never going to happen in the first place?

And therein lies Mayo's big mistake: Believing that the DM&E had a snowball's chance of getting this project off the ground.  It never was to be, as BNSF and UP were well aware from the beginning, hence their largely silent stance on the issue over the years.

The plan was simply a fantasy by some at the DM&E, which trickled down to online communities and railfans eager for such thing.  But everyone else knew that there was no economic reason for doing so.  Even if D&ME could miraculously wrest a coal contract or two from BNSF or UP, it would hardly be enough to pay back a loan in the billions of dollars.  Undercutting BNSF and UP would be a near impossibility in itself, but the main problem with the DM&E was that it had just one way in and one way out, making routing 90+% of coal shipments more circuitous than using UP or BNSF.  That BNSF and UP had better routes for coal trains going to KCS at Kansas City than DM&E/IC&E would be one thing, but when one considers all the other places that BNSF and UP move coal which would be completely inaccessible to a DM&E routing (again, which is most of them), the DM&E plan could only be a fantasy.  (At the time - around 2007 - BNSF's largest coal customers were in Georgia, Alabama, Texas, and British Columbia; try working a DM&E route into any of those destinations without a huge degree of circuity!)

As Murphy points out, the DM&E never got any financing for the project.  After no one in the private sector would fall for it, DM&E petitioned the FRA that rejected the request because, basically, they didn't believe the DM&E could repay the loan:

And keep in mind that this was still before the Great Recession in 2008 and beyond and of course the current trends with coal demand.  Indeed, a mind-boggling "what-if" there!!!!