Thursday, March 05, 2009

South Dakota OKs DM&E land acquisition effort

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Canadian Pacific subsidiary Dakota, Minnesota and Eastern Railroad can proceed with a $6 billion plan to extend rail right-of-way 262 miles west of Wall, S.D., to Wyoming’s Powder River Basin coal fields, the South Dakota Transportation Commission ruled Wednesday.

The commission ruled that DM&E had negotiated in good faith with existing landowners prior to seeking eminent domain. The commission did turn down DM&E’s application eminent domain authority east of Wall, along existing rail right-of-way, stating DM&E has not yet negotiated with any landowners on that stretch.

Canadian Pacific has previously stated it is still considering the merits of such an expansion. DM&E began its efforts prior to CP’s takeover, which the Surface Transportation Board approved on Sept. 30, 2008. STB, citing its own environmental concerns, stated CP and its U.S. subsidiary, Soo Line Holding Co., could not carry “any coal originating on the new Powder River Basin line until the agency has prepared an Environmental Impact Statement addressing the environmental impacts of those movements and issued a final decision allowing such operations to begin.”

The South Dakota Transportation Commission's decision was unanimous, and followed a recommendation of approval submitted by former South Dakota Supreme Court Chief Justice Robert A. Miller, who served as hearing officer in the case.South Dakota law says a railroad can use eminent domain only if the governor or the Transportation Commission finds the project is a public necessity—and if it is determined that the railroad has negotiated in good faith with landowners first.