Posted: Dec 04, 2012 11:36 AM PST Updated: Dec 04, 2012 11:36 AM PST
AMBER HUNT, Associated Press
SIOUX FALLS, S.D. (AP) Weakening demand for coal has prompted Canadian Pacific Railway Co. to mothball plans to extend its Dakota, Minnesota & Eastern Railroad network into the Powder River Basin to ship Wyoming coal to power plants in other states, the company announced Monday.
The "indefinite deferral" is an apparent death knell for long-standing plans for a third railway to compete in the coal-rich basin, which CP officials had once called an exciting prospect for an "efficient and competitive additional link to Midwestern and eastern utilities."
"CP took a careful look into the long-term prospects of the (Powder River Basin) for our railroad and, when considering the outlook of domestic thermal coal, we made what we feel is the prudent business decision" by axing the plans, CP spokesman Ed Greenberg told The Associated Press.
CP bought the South Dakota-based DM&E and its subsidiaries in 2007 for $1.5 billion. Included in the sale were DM&E's equipment, 2,500 miles of track and the option to expand into the basin.
DM&E had plans to add 260 miles of track around the southern end of the Black Hills to the Wyoming coal fields. The goal was to haul low-sulfur coal east to power plants, a multibillion-dollar project. The line would have competed with Union Pacific and BNSF Railway, which in 2006 had carried about 450 million tons of coal from the basin.
But coal prospects have changed over the years, Greenberg said. Railroads have been dealing with weaker coal demand because of low natural gas prices and last year's mild winter. There also is speculation that any new regulations to limit greenhouse gases would make coal even less attractive to utilities.
Wyoming is the nation's leading coal-producing state, though the state is projecting essentially flat revenues in coming years. Wyoming's in-house state fiscal analysts in October projected that coal production in the state is on pace to decline 8.7 percent, or about 40 million tons, in 2012.
The DM&E project had been controversial from its inception. The Sierra Club and other groups have pushed to try to block federal coal leases in the Powder River Basin on the grounds that burning coal mined there would contribute to global warming.
Associated Press reporter Ben Neary in Cheyenne, Wyo., contributed to this report.
Copyright 2012 The Associated Press
Uke said
9:50 PM, 12/04/12
...and now whadda they gonna do? Why sell off excess track of course! After spending (wasting) nearly $2-billion of shareholder equity...they wake up!
CP gauging interest in railroad track in 4 states
Posted: Tuesday, December 4, 2012 1:29 pm
Associated Press |
SIOUX FALLS, S.D. (AP) Canadian Pacific Railway is looking into the possibility of selling 660 miles of track in South Dakota and three surrounding states, the railroad said Tuesday.
The announcement came a day after CP said it was mothballing plans to extend its Dakota, Minnesota & Eastern Railroad network into the Powder River Basin to ship Wyoming coal to power plants in other states because of weakening demand for coal.
The railroad did not directly link the two decisions. Spokesman Ed Greenberg told The Associated Press both decisions are part of CP's "focus on being a more competitive and efficient railroad."
He declined to speculate on whether the 660 miles of track would be less profitable without the Powder River Basin business.
CP in 2007 bought 2,500 miles of track and equipment from South Dakota-based DM&E and its subsidiaries for $1.5 billion. CP said in a Tuesday statement that it is "inviting expressions of interest" for track from Tracy, Minn., into South Dakota, and into Nebraska and Wyoming. The track is described as the "DM&E west end."
"This portion of the CP network would be an attractive and highly viable opportunity for a low-cost operator," CP President and CEO E. Hunter Harrison said in the statement. "There is a strong long-term franchise here for an operator willing to maintain high-quality service and explore growth opportunities with existing and future customers."
CP has made no decision on selling the track but wants to see what interest is there, Greenberg told the AP. The railroad did not announce a timeline for making a decision on the future of the track.
I beg ta differ...since YOU put this out there for the whole world ta see! That really hurted! Bastard!
-- Edited by Uke on Tuesday 4th of December 2012 02:55:48 PM
Railroad mothballing Powder River Basin extension
Posted: Dec 04, 2012 11:36 AM PST Updated: Dec 04, 2012 11:36 AM PSTAMBER HUNT, Associated Press
SIOUX FALLS, S.D. (AP) Weakening demand for coal has prompted Canadian Pacific Railway Co. to mothball plans to extend its Dakota, Minnesota & Eastern Railroad network into the Powder River Basin to ship Wyoming coal to power plants in other states, the company announced Monday.
The "indefinite deferral" is an apparent death knell for long-standing plans for a third railway to compete in the coal-rich basin, which CP officials had once called an exciting prospect for an "efficient and competitive additional link to Midwestern and eastern utilities."
"CP took a careful look into the long-term prospects of the (Powder River Basin) for our railroad and, when considering the outlook of domestic thermal coal, we made what we feel is the prudent business decision" by axing the plans, CP spokesman Ed Greenberg told The Associated Press.
CP bought the South Dakota-based DM&E and its subsidiaries in 2007 for $1.5 billion. Included in the sale were DM&E's equipment, 2,500 miles of track and the option to expand into the basin.
DM&E had plans to add 260 miles of track around the southern end of the Black Hills to the Wyoming coal fields. The goal was to haul low-sulfur coal east to power plants, a multibillion-dollar project. The line would have competed with Union Pacific and BNSF Railway, which in 2006 had carried about 450 million tons of coal from the basin.
But coal prospects have changed over the years, Greenberg said. Railroads have been dealing with weaker coal demand because of low natural gas prices and last year's mild winter. There also is speculation that any new regulations to limit greenhouse gases would make coal even less attractive to utilities.
Wyoming is the nation's leading coal-producing state, though the state is projecting essentially flat revenues in coming years. Wyoming's in-house state fiscal analysts in October projected that coal production in the state is on pace to decline 8.7 percent, or about 40 million tons, in 2012.
The DM&E project had been controversial from its inception. The Sierra Club and other groups have pushed to try to block federal coal leases in the Powder River Basin on the grounds that burning coal mined there would contribute to global warming.
Associated Press reporter Ben Neary in Cheyenne, Wyo., contributed to this report.
Copyright 2012 The Associated Press
...and now whadda they gonna do? Why sell off excess track of course! After spending (wasting) nearly $2-billion of shareholder equity...they wake up!
CP gauging interest in railroad track in 4 states
Posted: Tuesday, December 4, 2012 1:29 pm
Associated Press |
SIOUX FALLS, S.D. (AP) Canadian Pacific Railway is looking into the possibility of selling 660 miles of track in South Dakota and three surrounding states, the railroad said Tuesday.
The announcement came a day after CP said it was mothballing plans to extend its Dakota, Minnesota & Eastern Railroad network into the Powder River Basin to ship Wyoming coal to power plants in other states because of weakening demand for coal.
The railroad did not directly link the two decisions. Spokesman Ed Greenberg told The Associated Press both decisions are part of CP's "focus on being a more competitive and efficient railroad."
He declined to speculate on whether the 660 miles of track would be less profitable without the Powder River Basin business.
CP in 2007 bought 2,500 miles of track and equipment from South Dakota-based DM&E and its subsidiaries for $1.5 billion. CP said in a Tuesday statement that it is "inviting expressions of interest" for track from Tracy, Minn., into South Dakota, and into Nebraska and Wyoming. The track is described as the "DM&E west end."
"This portion of the CP network would be an attractive and highly viable opportunity for a low-cost operator," CP President and CEO E. Hunter Harrison said in the statement. "There is a strong long-term franchise here for an operator willing to maintain high-quality service and explore growth opportunities with existing and future customers."
CP has made no decision on selling the track but wants to see what interest is there, Greenberg told the AP. The railroad did not announce a timeline for making a decision on the future of the track.
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