Railroad mothballing Powder River Basin extension - WTRF 7 News Sports Weather - Wheeling Steubenville

Railroad mothballing Powder River Basin extension

Posted: Updated:
  • EnergyEnergyMore>>

  • Council hears pro, con testimony on parks drilling in Western Pa.

    Council hears pro, con testimony on parks drilling in Western Pa.

    Wednesday, April 23 2014 1:56 PM EDT2014-04-23 17:56:34 GMT
    Pittsburgh (AP)Pittsburgh (AP)
    Council members in western Pennsylvania heard testimony for and against a proposal to drill for natural gas under a Pittsburgh-area park. The Allegheny County Council is considering a proposal to allow Range Resources and Huntley Huntley to drill beneath 1,180-acre Deer Lakes Park from well sites on neighboring properties.
    Council members in western Pennsylvania heard testimony for and against a proposal to drill for natural gas under a Pittsburgh-area park. The Allegheny County Council is considering a proposal to allow Range Resources and Huntley Huntley to drill beneath 1,180-acre Deer Lakes Park from well sites on neighboring properties.
  • Patriot Coal issues 60-day notice of potential layoffs at 2 WV mines

    Patriot Coal issues 60-day notice of potential layoffs at 2 WV mines

    Wednesday, April 23 2014 8:23 AM EDT2014-04-23 12:23:39 GMT
    Patriot Coal issued warnings that it could lay off employees at its Wells mining complex near Wharton and its Corridor G complex near Danville.
    Patriot Coal issued warnings that it could lay off employees at its Wells mining complex near Wharton and its Corridor G complex near Danville.
  • Marshall Co. makes plans for natural gas combined cycle power plant

    Marshall Co. makes plans for natural gas combined cycle power plant

    Tuesday, April 22 2014 6:42 PM EDT2014-04-22 22:42:40 GMT
    The project still needs to obtain state and federal approvals to develop and build the plant, but organizers anticipate construction to begin in 2015 and operations to begin by 2018.
    The project still needs to obtain state and federal approvals to develop and build the plant, but organizers anticipate construction to begin in 2015 and operations to begin by 2018.

AMBER HUNT, Associated Press

SIOUX FALLS, S.D. (AP) — 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.

The DM&E project had been controversial from its inception. The Sierra Club and other groups have pushed to try to block federal coal leases in the Powder River Basin on the grounds that burning coal mined there would contribute to global warming.

Associated Press reporter Ben Neary in Cheyenne, Wyo., contributed to this report.

 

Copyright 2012 The Associated Press