(The following article by Bill Harlan was posted on the Rapid City Journal website on January 4.)
RAPID CITY, S.D. — The expansion of the Dakota, Minnesota & Eastern Railroad is as important to western South Dakota as converting the Homestake gold mine into a science laboratory and protecting Ellsworth Air Force Base from closing, a local legislator said.
State Sen. Bill Napoli, a Republican who represents parts of Rapid City and Rapid Valley, said that the $6 billion railroad expansion would create 5,000 jobs during construction and 1,200 permanent jobs.
“The mine is a wonderful thing, but these are my kind of people,” Napoli said. “These are blue-collar jobs.”
The expansion would allow DM&E to carry coal from the Powder River Basin in Wyoming across South Dakota to power plants in eastern states.
Napoli said he will ask fellow legislators to create a “blue-ribbon” task force to find ways that the state can help the railroad. It would be similar to the Ellsworth Task Force that helped save the air base from closing.
The DM&E project, however, is more controversial than Ellsworth or Homestake, partly because the railroad, a private company, is asking for a $2.3 billion federal loan to help finance building 280 miles of track and upgrading 600 more miles.
“I support the railroad, but the devil’s in the details,” Sen. Jerry Apa, R-Lead, said. Apa said Napoli had asked for his support, but Apa said he would have to know more about the federal loan and other aspects of the expansion.
The DM&E project also has ardent opponents, such as Nancy and Donley Darnell of Newcastle, Wyo.
“It’s a boondoggle,” she said.
Darnell said competition from the Union Pacific and Burlington Northern railroads likely would make DM&E unprofitable. “They’re in great danger of going broke,” she said.
The Darnells are organizers of the Mid States Coalition, which they said has 500 members in Wyoming and South Dakota – all of them opposed to the project.
Paul Jensen of Rapid City is just as vehemently opposed to the DM&E expansion, which would cut across a ranch that his family has owned for more than 100 years.
“They’re going to tear the hell out of the Cheyenne River basin,” Jensen said.
Jensen also challenged Napoli’s assertion that 5,000 jobs would be created.
“They said it would create 10,000 jobs, too,” he said. “Where do they get these crazy numbers?”
Still, the DM&E project has the support of all three members of the state’s congressional delegation, including Republican Sen. John Thune, who used to lobby for DM&E and was once the state’s railroad commissioner.
Napoli said the railroad expansion would provide jobs and opportunities for spin-off companies. “DM&E will have a huge impact for many years,” he said. “But at the state level, we appear to be doing nothing. There’s not the same drive behind it as there has been for the mine.”
Gov. Mike Rounds disagreed. He said his administration had been lobbying the federal government in support of the proposal for three years, urging approval of the $2.3 billion loan. “We’ve spoken with the OMB, and we’ve spoken directly with the secretary of transportation,” Rounds said, urging approval of the federal loan.
Rounds also said most South Dakotans support the project, though he said there was opposition.
“Any time you have a private organization acting as a public utility, there is bound to be consternation on the part of landowners,” he said.
Rounds said he believed that changes in state law made use of eminent domain fairer for landowners, though Jensen disagreed. “There’s been no negotiation or good faith,” he said.
Rounds also said hauling coal across South Dakota, from Wyoming mines to Minnesota power plants, will reduce dependence on oil from the Middle East.
Darnell argued that a study showed that the new rail line must get coal from existing production. “It will not increase the amount of coal mined or burned at all,” she said.
Napoli, however, views the railroad as a source of jobs every bit as important as jobs in a Homestake physics lab or at Ellsworth Air Force Base. And he said the railroad should get similar support.
The governor and the state Legislature, for example, have put together a package of more than $40 million in state and federal money to support converting Homestake into a national underground laboratory.
The Ellsworth Task Force and the state of South Dakota spent about $12 million to save Ellsworth from closing, including $10 million to move an exit on Interstate 90. Napoli said at the time that he believed some of that Ellsworth money had been “squandered.”
Now, Napoli is calling for a “blue-ribbon task force” to help DM&E. “I see it as nothing but a shining star,” he said. “If we give it the same emphasis we gave the mine and Ellsworth, we’d make DM&E a reality.”
Rounds, however, said the railroad differed in that it’s a private company, and he added that DM&E had not requested state funds.
Opponents such as Jensen and the Darnells say they’ll continue to fight the railroad, though opponents recently lost a battle in the 8th Circuit Court of Appeals in Minneapolis, which ruled last week that the Surface Transportation Board had legally approved the project.
Gov. Rounds, meanwhile, said he expects to hear “very soon” whether the $2.3 billion loan is approved.