Election or no election, DM&E issue still on the front burner

NOTE: This article is posted in full as the Rochester Post-Bulletin, unlike the major media, insists on hiding most of its material behind a firewall.

Next ruling on DM&E might wait until 2007

By Jeffrey Pieters
The Post-Bulletin

ST. LOUIS -- A judge hearing arguments in Rochester's and Mayo Clinic's court case to overturn federal approval of the Dakota, Minnesota & Eastern Railroad project promised a decision "with all due speed."

"It's interesting, and the issues are immense," said Kermit Bye, one of three U.S. Appeals Court judges listening to opposing sides argue during an hour-long court session on Monday. "We'll do the best we can."

In all likelihood, a decision won't come until next year, said Rochester City Attorney Terry Adkins, who observed but did not participate in the hearing.

"Personally, I think it's going to be early '07," he said.

The legal challenge, filed by parties including Rochester, Mayo Clinic, Olmsted County and the Sierra Club, is the second appeal of a federal agency's decision to approve the DM&E project.

The project, which calls for extending the DM&E's line 260 miles west to Wyoming coal mines and upgrading the balance of the 600-mile line through South Dakota and Minnesota, first won approval from the federal Surface Transportation Board in January 2002.

Opponents challenged that decision, and in October 2003 won an appeals court decision -- involving two of the same judges considering the current appeal -- remanding parts of the analysis to the STB for further review.

The STB returned with a second approval of the project in February, and opponents appealed again. Oral arguments on Monday, in the grand 27th-floor courtroom in the Thomas F. Eagleton Courthouse in St. Louis, followed months of written arguments submitted to the court.

What about IC&E?

Railroad opponents argued that the STB, on its second review, should have included in that study an analysis of whether harm to Rochester and Mayo Clinic from increased rail traffic could be prevented by ordering coal traffic to be routed on the DM&E's sister line, the Iowa, Chicago & Eastern Railroad.

The DM&E bought the IC&E line, formerly IMRL Rail Link, in 2002, after the STB first approved the project. The line intersects the DM&E main line at Owatonna and runs south into Iowa before turning east toward Chicago.

But that sort of regulation -- provided it can be done legally -- cancels out the very benefit that the DM&E project is supposed to deliver: a shorter, more efficient and cheaper route for Wyoming coal to reach Midwestern markets.

"The public benefits if DM&E can operate on the most efficient routings," said Evelyn Kitay, an attorney representing the STB.

Coal and pollution

The appeals court's 2003 ruling also required STB to take a second look at environmental effects from the DM&E upgrade -- not only from the rail project itself, but from increased coal use in power plants nationwide.

The federal agency didn't sufficiently examine that question in a computer model it submitted in response, said Jim Dougherty, an attorney representing the Sierra Club.

"It looks like they shopped for the best model they could find," Dougherty said. "They haven't addressed the environmental impacts of coal-burning. ... What does this mean for asthmatic children in Chicago or New York?"

Kitay responded that the STB used accepted methods for its study. It supplied data to the Energy Information Agency, part of the Department of Energy, to gauge the resulting effect on air quality.

Anyway, Kitay said, the nation's power plants demand the coal. "Virtually all of the increase will result whether or not DM&E is in the market."

DM&E President and CEO Kevin Schieffer attended the hearing, but did not speak. Like Adkins, he did not hazard a guess what the outcome would be.

"I never try to figure out where the judge is leaning based on questions," Schieffer said. "The judges' jobs are to ask hard questions."

Besides Bye, who is from Fargo, N.D., the other judges on the panel were William Jay Riley, of Omaha, and Morris Arnold of Little Rock, Ark. Riley and Arnold heard the previous appeal. All of the judges frequently cut in on attorneys' presentations to ask pointed questions.

Adkins, who has a past professional relationship with Bye, expressed cautious optimism, and credited the judges with doing the background work necessary to inform themselves on the eight-year-long struggle.

"I don't know whether they'll agree with our position or not, but they obviously understand the points we were trying to make," Adkins said. "Generally, I was pleased with the way it went."

The story is here.