End of the Line or Back to the Drawing Board for DM&E Coal Trains?

There is a broader solution. With proper leadership we will find it.

by Leigh Pomeroy

Now that the Federal Railroad Administration has told the Dakota, Minnesota & Eastern railroad that it is not going to give it the hoped-for $2.3 billion loan to expand into the Powder River Basin, is that the end of a decade-long dream for the DM&E's CEO Kevin Schieffer?

The answer is: No one knows. Schieffer at least in public has said he's not throwing in the towel. The Surface Transportation Board and the FRA have approved the project, just not the massive loan. The Mayo Clinic and other opponents along the route haven't scheduled any victory parties. And freshman Congressman Tim Walz, whose upset victory last fall came partially because of his opposition to the loan, is holding out an olive branch saying, yes, we want the railroad to upgrade and succeed, but no, we're not crazy about the coal.

Ten years ago when Kevin Schieffer set off on his quest to turn the Class II DM&E into a Class I railroad, he thought he had a surefire solution: Extend his fledgling regional operation into the coal-rich PRB and begin shipping America's last remaining supplies of relatively cheap fossil fuel to coal hungry power plants in America's heartland. Though there were already two railroad lines servicing the area, his new route would be shorter and more direct to points east. It sounded like a can't-fail plan.

Yet he didn't anticipate the opposition that would arise along the way from a vast and diverse myriad of interests. Despite this opposition he kept pushing forward, but partially because of the opposition the project grew more expensive. Would-be investors started to get nervous. So Schieffer turned to his old friend John Thune, a newly elected senator from South Dakota, for help. Thune obliged by adding a last-minute provision into the massive 2005 Transportation Bill that would all but assure the DM&E of a low-interest, taxpayer guaranteed federal loan that would cover about 35% of the cost. It seemed like a slam dunk.

Citizens, the media and all but a handful of legislators didn't find out about this provision until after the behemoth bill was passed. Soon the media were trumpeting the DM&E PRB expansion project as a done deal: You can't fight both the railroad and Congress.

But they forgot to ask a few folks along the way. While the environmental opposition had faded away after a series of Surface Transportation Board decisions favoring the railroad that were upheld in court, there was still strong opposition from ranchers in Wyoming, citizens in Brookings, S.D., and above all, the Mayo Clinic and the City of Rochester, Minn. The latter two, which had been fighting the expansion quietly for years, suddenly swung into full combat mode, pulling out all the stops — and investing hundreds of thousands of dollars — in an effort to bring the project to a screeching halt. Suddenly the battle became: Who had the most powerful friends in Washington?

Yet the conflict was more than that, and in fact it is a textbook study on how citizen perseverance can overcome self-serving business and political interests.

Often a battle to achieve a political end, whether it be constructing a recreational trail or stopping a massive railroad project, begins with a few impassioned citizens. Sometimes they're considered "crazies", because they often seem obsessed and the odds of their succeeding appear so remote. Yet these causes take on a life of their own, and if they are legitimate attract other followers. Often, those who initiate such advocacies fade into the background as new people take over, bringing different skills and a stronger power base. The cause becomes like a relay race, where one person or group hands off the baton to another, and then to another, and so on.

The strength of an advocacy is not so much due to the numbers behind it or its absolute power, but to its persistence. On a larger scale, no revolution ever succeeded because it started with a backing of the majority of the people. It started with a small but impassioned group that grew and persevered and eventually outlasted what was once a more powerful entrenched group.

Back to the DM&E:

The arguments of the agricultural interests that have been loudest for upgrading the DM&E are certainly legitimate. This country needs a strong railroad infrastructure. Yet the coal argument made ten years ago is no longer viable today, especially in light of the planet's newfound concerns over global warming. Even Wall Street is recognizing that coal is not a singular answer to the nation's energy needs, and the aging power plants in the country's midsection will be receiving more and more scrutiny as we begin to factor in rapidly rising environmental costs in cost-benefit analyses.

What would be the best solution to the needs of the various interests involved in this dispute? It is not, at this point, in pitting one side against another. What should be done is that the legislative leaders who have taken an active role in this controversy — Rep. Walz and Sens. Coleman and Klobuchar in Minnesota, and Rep. Herseth and Sens. Thune and Johnson in South Dakota — set up a means whereby all stakeholders can sit down with each other in a series of open and candid meetings to iron out a compromise.

There are solutions and certainly common interests. Now that the war over the DM&E's PRB plans has been fought to a stalemate, it is time for a peace conference to determine what's best for the railroad transportation needs of all the citizens in the Northern Plains and the Midwest.