Thursday, June 03, 2010

CP Rail: Powder River line still on hold

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Canadian Pacific told analysts at its annual investors day in Vancouver Wednesday that it remains undecided on building a line to the Powder River Coal Basin in Wyoming, an option it acquired in 2008 with acquisition of the Dakota, Minnesota & Eastern. DM&E had advanced the planned line through the Surface Transportation Board and past numerous environmental obstacles.

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Jane O'Hagan, CP’s vice president for marketing, said no decision is likely to be made before the United States clarifies positions that will affect the future of coal as a major source of energy—and that’s just one of several hurdles.

“Market volatility, coupled with the politics of coal-generated energy and CP’s requisite conditions for investment, such as mine access, long-term contracts, and assembly of the right-of-way, have not been met,” said O'Hagan.

CP officers seized the occasion to describe a number of actual and potential initiatives that would increase the railroad’s productivity and efficiency at relatively modest cost. One is continuing to shrink the system without significant loss of business. On CP’s current line-abandonment map are 1,400 miles of track in Canada and the northern United States targeted for action in the next 18 months.