SIOUX FALLS, S.D. — A state lawmaker says South Dakota should expend the same energy lobbying for a $6 billion expansion of the Dakota, Minnesota & Eastern Railroad that it put into its efforts to turn the former Homestake Mine into an underground science laboratory.
Sen. Bill Napoli, R-Rapid City, said the rail expansion could add 5,000 new jobs in the first year and he’s disappointed the state has not taken on a greater role in supporting the project. He wants to create a task force of legislators and other supporters that would “do anything in its means to make the DM&E become a reality.”
“The DM&E has huge, huge economic benefits for the state of South Dakota,” Napoli said. “We’re talking about a railroad that’s going to run from one end of this state to the other in areas that need development of some kind.”
The DM&E wants to rebuild 600 miles of track across South Dakota and Minnesota and add 260 miles of new track to Wyoming in order to haul low-sulfur coal eastward to power plants.
The railroad is awaiting word from the Federal Railroad Administration on its application for a $2.3 billion loan. Gov. Mike Rounds, whose administration has lobbied strongly for the DM&E project, said a decision is expected this month.
Marvin Kammerer, a project opponent who ranches near Rapid City, called the proposed expansion “a boondoggle.” He questioned who it would benefit other than Sioux Falls-based DM&E and said he doesn’t think it will employ very many South Dakotans after it’s built.
The project is also opposed by some landowners along the route, particularly those whose ranches would be crossed by new track that would be built around the southern end of the Black Hills to reach the Wyoming coal fields.
Donley Darnell, of Newcastle, Wyo., said other railroads already are hauling coal out of Wyoming and he doesn’t see how subsidizing the DM&E with a $2.3 billion government loan makes sense.
Darnell, of the Mid States Coalition for Progress, said Burlington Northern and Union Pacific can handle any additional demand for coal using existing routes. He questions how DM&E will capture enough of the market to pay back the loan.
“I don’t see why the government should be picking the winners and losers,” Darnell said. “If BN and UP can do it without a government loan, why not let them do it?”
But Rounds said the project offers another avenue to move coal out of the Powder River Basin.
Past transportation bottlenecks have put a strain on supply at coal-burning power plants such as Big Stone near Milbank. Another line will boost competition and bring down costs, he said.
“I believe that it will be very helpful to the national economy to have more than one competitive carrier moving coal out of that particular location,” Rounds said.
Napoli said several dozen DM&E trains a day would haul coal east and it would be foolish to believe they’d return empty. He said the future of bringing freight back to and through the state is enormous.
“Everywhere there’s a switch, everywhere there’s a roundhouse, everywhere there can be a siding, I envision that there will be places to load freight, load cattle, load all sorts of agriculture products,” Napoli said.
The line, Rounds said, could also provide an additional route for South Dakota’s ethanol plants to move their product.
Kammerer said there are no guarantees the line would be used for anything other than hauling coal.
Darnell said ranchers in Wyoming and South Dakota will also be hurt by eminent domain, which, if approved, would give the rail line the right to cross private land for its expansion.
“The way the eminent domain laws are structured, actually, there’s no way to really recover what this railroad would cost landowners,” he said.
Opponents of the planned expansion lost another round in their fight against the railroad expansion last week when the 8th U.S. Circuit Court of Appeals ruled the federal Surface Transportation Board legally approved the project.
Other opponents of the DM&E project include some residents in Pierre and Brookings, and the city of Rochester, Minn., and its Mayo Clinic, which argue that running more trains at higher speeds would create safety problems for the clinic’s patients.
The railroad says it’s operating on 80-year-old track and that the expansion and modernization project would improve safety.
Napoli said South Dakota has to step up and ensure the new railroad becomes a reality despite opposition and DM&E’s poor safety record, which he said will be improved with the rebuilt track.
Long term, he added, “the DM&E is every bit as big a project if not bigger than the (Homestake) Mine,” especially if the National Science Foundation picks a site other than Lead for its national underground laboratory.
Rounds said such a task force supporting the expansion has “been operating and moving forward for months.”
The governor, South Dakota’s entire congressional delegation and many agricultural and business groups all support the expansion, and Rounds said he has attended numerous meetings and planning sessions with DM&E leaders, community members and federal officials.
But he said the DM&E project and the Homestake Mine are completely different efforts.
The railroad expansion involves a private company essentially operating as a public utility, while the state has an ownership interest and direct involvement with converting the former mine to a science lab.
“The state is not in a position to fund the DM&E project,” he said