Hey yall! Kind of new to this forum thing here, but I was wondering if anyone has thoughts or comments regarding the expansion plans of the DME into the powder river coal fields of Wyoming. Will it be successful?
Please do a search and you will find more tha enough info.
It will be successful and I welcome them as a class 1.
I have searched extensively on the topic, but I am wondering if you guys think their proposed business model is plausible?
Well, getting $2.5 billion from the feds is a pretty good business plan! And since neither UP nor BNSF can keep up with the demand for PRB coal, DM&E is getting in at just the right time.
I remember about 4 years ago, my family and I went on a vacation out to Huron, SD, and stopped in for a tour of the shops. We got quite a welcoming out there. The took me and my brother on a engine, and took us out to the main line, and then back to the roundhouse, on the turntable. The hole way, the man (who was aparently one of the head guys of the DM&E) was telling us all about the planned extention, and what thay were going to do in order to accomodate all of the traffic. He said they would have to upgrade all of their trackage, make all of the yards bigger, expand the yard at Huron by 5 tracks, buy the bigger office building that was across the street, for the yard, donate the roundhouse to the city of Huron, build a new shop facility down the line, and so on, and so on. It was really interiestig that I heard nothing else about this until I got the Trains News Wire, and read the article. Good for them that they are going out to the Powder River.
Phil
I feel they will be succesful with all the woes BN/UP are having out in the PRB.
As far as getting 2.5 billion from the feds - doesn’t that appear troubling? If there was a demand for the low sulfur coal -and there is- then why isn’t there financial backing from private investors? I can’t think of a greater opportunity for investment in rail. You have a railroad that will be entering into competition with 2 goliath western railroads. You have a product (coal) that is in high demand, demand that will only increase with stricter enviromental requirements on power plants. At the outset of the program, from what I can gather, DME’s president seemed confident that he could muster the funds from the private sector. Apparently that fell through, and the company has now gotten funding from the government (via a certain senator’s legislation). To me it’s a red flag when the private sector doesn’t see it as a worth while investment.
That being said, I sincerely hope they succeed. They have more hurdles to cross, and I am sure that special interest groups will continue to file lawsuits until the cows come home. There is a lot to be said about the success of the DME. They took a line that the CNW planned to abandon and turned it around into a viable operation. Not only that, its’ a great railroad to watch. I attended college in New Ulm, MN, which is right on the line that would be upgraded as part of the Power River project. It was great to see a railroad in operation with older equipment (those SD70’s and AC4400’s don’t sound ANYTHING like 4 SD40-2’s in notch eight with a heavy grain train). The track is marginal at best, and there was one time when I was on my way back to Wisconsin for break when we came upon a fairly sizeable derailment outside of Wauseca, MN. I was even able to get some pictures of SD 40-2’s that the DME owns that were former Milwaukee Road units. Sure they were rebuilt and I am sure there is NO trace of orange and black under that blue and yellow, but that shortened fuel tank sure sticks out like a sore thumb! And based on wgnrr’s reply, it would be nice to
The above is an outstanding answer!
Perhaps the long lead time for a return on invest is the reason why.
Yeah, after thinking about it, I suppose that’s the reason. People still think that there are better markets out there (housing bubble) that have a better return on investment capital (internet bubble) that couldn’t possibly blow up in there face but continue to produce 20 - 30 % returns (enron). After all, why wouldn’ t anyone invest in an “old economy” business when there is all that “new economy” potential out there that is gaurenteed to just rake in the profits (worldcom)?
Tell you all the truth all it is gonna do is jam up the Orin line even more and that makes for longer trips and I already barely make it to Guernsey Wyoming taking the trains from the mines and heading south. The old heads tell me it used to take less than 5 hours and it was a good trip but since Union Pacific has their yard in Bill but are STILL not smart enough to use it to change crews they stop out on the mains and change out plus hold traffic up. I tell you UP is not the smartest and they sit and brag about being the top railroad…well, they better teach their boys to do their jobs cause us BNSF guys are tired of changeing their knuckles out for them when they break in two. Here is a tip for the biggest railroad…get a brain in that big head of yours. As far as the DME…I have had guys tell me it might end up killing them like it killed the CNW. My thoughts…whatever they want to do is their deal but don’t make the Orin line worse and they better get better motors cause it takes Macs and new GE locomotives to pull up Logan hill…sometimes 3 on the front and 1 on the back is just enough. All I’m saying is “Get ready to step up and play with the big dogs”
I take it that not many people are fans of the UP?
you are very correct!!! unless the orin line adds one or even two new mainlines
it will not matter how many railroads are hauling low sulfur coal.
http://www.nationalcorridors.org/df/df01122004.shtml#DM
read this here link thats where the money is being alocated…looks like alot is to go to current debt and refinancing
I’m not so sure that that isn’t a loan in addition to the $2.5 billion loan being sought.
That loan from 2 years ago has nothing to do with the PRB loan.
One related fact is the continuing increase in the use of coal for electricity generation. The majority of new power plants are now coal fired as opposed to a few years ago when the majority of new plants were natural gas fired.
dd
This was the reason that I originally posed this thread. I have spent my time in several power plants and they were all talking about upgrading their coal technology from the older high sulfur content to the lower sulfur content and higher pulverization. Both of these power plants would be potential customers of the DME (though CP Rail). Their reason for the changeover is more out of environmental concerns. (DNR, EPA, etc.) This would be business that would be taken from barges. Natural gas, the cleanest burning fuel, is the most expensive. It also has a lower BTU value. Coal is still the most effecient source of heat per mass. Natural gas is also an extremely volatile market.
Dont hold your breath on teh DME/ICE is railfan friendly. Some areas may be but Muscatine Iowa had a lock removed and a switch thrown. Blamed it on ebay and railfans! Not disgruntled employees.Tell you the truth they never found who did it. I dont think. But it started the implementation of the double lock on our joint switches.
Well, for one thing the DM&E PRB extension is coming in from the east, and will split into north and south legs when it gets within a few miles of the Orin line. Those north and south legs will parallel the Orin line, but fortunately will be far enough away from the Orin line so as to not be affected by the (prediction) continuing foul ups on that line.
Yes, BNSF will probably add more triple (and maybe even quadruple) track to the Orin line, but that is a risky solution to the