This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

DM&E Mothballing Powder River Basin Extension

By AMBER HUNT

SIOUX FALLS, S.D. (AP) â¿¿ Weakening demand for coal has prompted Canadian Pacific Railway Co. to mothball plans to extend its Dakota, Minnesota & Eastern Railroad network into the Powder River Basin to ship Wyoming coal to power plants in other states, the company announced Monday.

The "indefinite deferral" is an apparent death knell for long-standing plans for a third railway to compete in the coal-rich basin, which CP officials had once called an exciting prospect for an "efficient and competitive additional link to Midwestern and eastern utilities."

"CP took a careful look into the long-term prospects of the (Powder River Basin) for our railroad and, when considering the outlook of domestic thermal coal, we made what we feel is the prudent business decision" by axing the plans, CP spokesman Ed Greenberg told The Associated Press.

CP bought the South Dakota-based DM&E and its subsidiaries in 2007 for $1.5 billion. Included in the sale were DM&E's equipment, 2,500 miles of track and the option to expand into the basin.

DM&E had plans to add 260 miles of track around the southern end of the Black Hills to the Wyoming coal fields. The goal was to haul low-sulfur coal east to power plants, a multibillion-dollar project. The line would have competed with Union Pacific and BNSF Railway, which in 2006 had carried about 450 million tons of coal from the basin.

But coal prospects have changed over the years, Greenberg said. Railroads have been dealing with weaker coal demand because of low natural gas prices and last year's mild winter. There also is speculation that any new regulations to limit greenhouse gases would make coal even less attractive to utilities.

Wyoming is the nation's leading coal-producing state, though the state is projecting essentially flat revenues in coming years. Wyoming's in-house state fiscal analysts in October projected that coal production in the state is on pace to decline 8.7 percent, or about 40 million tons, in 2012.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 17,757.91 +138.40 0.79%
S&P 500 2,077.42 +14.31 0.69%
NASDAQ 5,013.1230 +26.2560 0.53%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs