DM&E update: Oct. 10 deadline looms
Proponents and opponents of the proposed DM&E expansion continue their battle as the Oct. 10 deadline looms for giving commentary to the Federal Railroad Administration (FRA). According to the Rochester Post-Bulletin, proponents of the project were on Capitol Hill trying to bring pressure on Minnesota's congressional delegation, including Sen. Coleman and Reps. Gutknecht and Oberstar.
Most of the DM&E's trackage is in Gutknecht's 1st Congressional District, and Oberstar is the ranking Democrat on the powerful House Transportation and Infrastructure Committee. The expansion issue is proving to be a bitter pill for Gutknecht as his hometown of Rochester — spurred by the Mayo Clinic, its largest economic contributor — vehemently opposes more rail traffic, while the western agricultural part of the state seems to favor the upgrade.
Contributing to the toxic political mix is a proposed $2,300,000,000 ($2.3 billion) federal government loan to the financially secretive and some say shaky railroad, the largest in U.S. history and greater than the Chrysler bailout of 1979-80.
This issue has been covered elsewhere on these pages, at Vox Verax, Bluestem Prairie and Minnesota Central, and copiously in the mainstream media. Though the battle is seemingly regional, confined to South Dakota and Minnesota, its implications are national as U.S. taxpayers are being asked to underwrite the loan.
The DM&E wants the expansion so that it can haul coal from Wyoming's Powder River Basin to power plants east of the Mississippi River. This raises questions as to whether citizens and taxpayers of some communities should be required to pay for and cope with the negative consequences of a project deemed beneficial to citizens and taxpayers of other regions and states.
Add to this mix questions about the atmospheric effects of coal burning in terms of mercury and carbon dioxide emissions, the latter being the chief culprit of global warming, and the issue becomes even more complicated.
Those who wish to weigh in to the FRA on the proposed $2.3 billion federal loan to the DM&E can comment by writing or calling:
The latest DM&E expansion news can be found on Google and Yahoo.
Most of the DM&E's trackage is in Gutknecht's 1st Congressional District, and Oberstar is the ranking Democrat on the powerful House Transportation and Infrastructure Committee. The expansion issue is proving to be a bitter pill for Gutknecht as his hometown of Rochester — spurred by the Mayo Clinic, its largest economic contributor — vehemently opposes more rail traffic, while the western agricultural part of the state seems to favor the upgrade.
Contributing to the toxic political mix is a proposed $2,300,000,000 ($2.3 billion) federal government loan to the financially secretive and some say shaky railroad, the largest in U.S. history and greater than the Chrysler bailout of 1979-80.
This issue has been covered elsewhere on these pages, at Vox Verax, Bluestem Prairie and Minnesota Central, and copiously in the mainstream media. Though the battle is seemingly regional, confined to South Dakota and Minnesota, its implications are national as U.S. taxpayers are being asked to underwrite the loan.
The DM&E wants the expansion so that it can haul coal from Wyoming's Powder River Basin to power plants east of the Mississippi River. This raises questions as to whether citizens and taxpayers of some communities should be required to pay for and cope with the negative consequences of a project deemed beneficial to citizens and taxpayers of other regions and states.
Add to this mix questions about the atmospheric effects of coal burning in terms of mercury and carbon dioxide emissions, the latter being the chief culprit of global warming, and the issue becomes even more complicated.
Those who wish to weigh in to the FRA on the proposed $2.3 billion federal loan to the DM&E can comment by writing or calling:
David Valenstein
Environmental Program Manager
1120 Vermont Ave NW, Mail Stop 20
Washington, D.C. 20590
Phone: (202) 493-6368
The latest DM&E expansion news can be found on Google and Yahoo.
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1 Comments:
This is a letter that Rochester PB refused to publish this week-"we get too many anti-dme letters" I spent alot of time on this issue in "99, plus a little recent research, and this is what I found:
September 6, 2006
The DME Railroad’s lobbying front GOTRAC and the Farm Bureau, in their speeches and interviews, used the USDA “letter of support” for DME as their central point to link the DME coal project to an increase in agriculture prices. Indeed, on page four of the 1998 letter it does state “..some estimates suggest increases as high as .20cents per bushel for both corn and wheat.”
In April 1999, I called the author of the USDA “letter of support”, William Brennan, in Washington DC. I asked him about the estimate. He said he didn’t know much because DME gave him the estimate with no documentation. Two weeks later I called again. This time Mr. Brennan claimed ranchers in South Dakota gave him the estimate, again with no documentation.
The question of how agriculture prices will be affected by the DME upgrade is a good one. But this isn’t the way to go about it. In comparison, it’s like the City of Rochester claiming they have a study showing that DME coal trains endanger city safety. You call the city to find out more, expecting a study based on FRA accident statistics. Instead you find the study is based on how a neighborhood group feels about having 37 coal trains running through it. It’s hard to take this seriously.
There were other problems with the USDA “letter of support”. It claimed the .20cents increase was due to “the ability to ship to three major markets (river, processors, and Pacific Northwest).” DME is denying increased barge shipments. The DME proposed expansion only goes to eastern Wyoming, not the Pacific Northwest. As far as the processors go, in a Star and Tribune article, March 2003, J. Powell wrote, “on average about 125 trucks go in and out of most (ethanol) plants daily.” Ethanol refineries are located in farm country so the corn can be easily trucked in. As farms become larger, more have semi-trucks.
The market for the processors is more interesting. Today Minnesota uses one half to two thirds of the ethanol it produces. Trucks are typically the choice for hauls less than 200-300 miles. The USDA’s 2002 Ethanol Cost of Production Survey said the average truck with ethanol went 93 miles, while the train with ethanol went 1163 miles. The preferred long distance market for ethanol is California and for the ethanol byproduct , the Southwest. While DME plans an expansion into Wyoming, the Minnesota lines of the BNSF and UP Railroads go to the Pacific Northwest and Southwest.
Increasing agriculture prices is desirable, but it needs to be weighed against the costs involved. The STB typically mandates railroads to pay only .20cents on the dollar for the cost of upgrades; this covers closing the crossings, the safest option. When Wichita had an increase of 5 trains per day due to a rail merger, the state of Kansas paid 50 million, or 50% of the cost, and the federal government paid 24 million, for the required grade separations. The city of Reno paid for a majority of its’ 282 million railroad trench through various local tax increases: sales, hotel, property, and business. In February “99, DME engineers told MN DNR that they were planning for 75 million tons of coal , or 27 trains, to come through southeast MN to Winona. If the number has changed , DME should contractually agree to the lower number so cities can plan ahead.
Is it in the best financial interest of the state of Minnesota to spend what may end up being hundreds of millions of dollars on mitigation when the benefits to the state are questionable? Will DME even ship agriculture products? DME showed no increase in non coal traffic in its’ initial federal application when they charted type and number of trains per day as coal shipments increases. Neither do railroads need to haul coal to upgrade; besides the RRIF loans, dozens of railroads have recently upgraded their line with the federal Section 45G tax credit program. The state also has many options when it comes to spending money to expand agriculture marketing . Mower County, MN, lost the Absolute Energy Ethanol plant that is under construction in Mitchell County, Iowa, because Minnesota didn’t have “Enterprise Zone Tax Credits” according to a Mower County Supervisor in the Mitchell County Press-News. With all the ethanol plants soon coming on line, expanded grants for gas stations to install E85 pumps and for Minnesota tax rebates for purchasers of E85 FFV vehicles would also be worth looking into. Minnesotans should take a hard look at whether coal trains are the most efficient way, the biggest bang for the dollar, to improve agriculture prices.
Karla Johnson
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