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IDOT - Railroad Petition - Surface Trans. / ~ 1?oo~~~~~tOfTranspo~~~~ll ~ FAX: 515-239-1120 June 1, 2006 Vemon A Williams, Secreta1y SUlface Transportation Board 1925 K Street N W , Room 700 Washington, D C 20006 Re: Finance Docket No 34177 Iowa, Chicago and Eastern Railroad, Acquisition and Operation Exemption - Lines of the IMRL Finance Docket No 34178 Dakota, Minnesota and Eastern Railroad and Cedar American Holdings - Control of Iowa, Chicago and Eastern Railroad. Deal' Secretary Williams: Attached for filing are the Iowa Department of Transportation's comments to the above referenced dockets A copy of this filing has been provided to the Petitioner's attorney and to those on the attached service list If you have any questions regarding this filing, please contact John Hey, Modal Division, Iowa Department of Transportation, 800 Lincoln Way, Ames, IA 50010, telephone 515-239-1653, fax 515..233-7983 Sincer.ely, , ~~~. Nancy J Richardson Director BEFORE THE SURF ACE TRANSPORTATION BOARD Finance Docket No 34177 Iowa, Chicago & Eastern Railroad COIporation Acquisition and Operation Exemption Lines of the I&M Rail Link, LLC Finance Docket No 34178 Dakota, Minnesota & Eastetn Railroad Corporation and Cedar Amelica Holdings, loe Control of Iowa Chicago & Easteln Railroad CorpOIation Comments of the Iowa Department of Transportation to the Petition oflowli, Chicago & Eastern Railroad Corporation and Dakota, Minnesota & Eastern Railroad to Reopen and Partially Modify Conditions Prepared by; John Hey Modal Division Iowa Department of Transportation Dated: June 1,2006 BEFORE THE SURFACE TRANSPORTATION BOARD Finance Docket No. 34177 and 34178 Comments and Support Statement for Dakota, Minnesota & Eastern Railroad COIporation to Reopen but with Conditions Introduction: On May12, the Chicago and Eastem Railroad Corporation (IC&E), and the Dakota, Minnesota & Eastern Railroad Corporation (DME), filed a petition to partially reopen the decisions in FD # 34177 and FD #34178, decisions related to the acquisition and control ofI & M Rail Link (IMRL) The Surface TIanspoItation Board (STB) allowed those uansactions with conditions, one of which prohibited coal traffic from the Powder River Basin from using IC&E lines (the fonner IMRL lines) until appropriate environmental review takes place In those proceedings, the Iowa Department of Transportation (DOT) was neither for nor against the acquisition and contIol of the IMRL assets by the DM&EIIc&E,(petitioner) Ow concerns centered on the appropriateness of the process and the ability ofIowa shippers and communities to become involved and be provided opportunity for appropriate relief from environmental impacts. The Iowa DOT would like to express our conditional support for the partial reopening of the proceedings to allow the start of the environmental review process prior to the D:ME construction project into the Powder River Basin (pRB) However, we again raise concems about the potential long term impacts that PRB coal u.affic may have on Iowa shippers and communities We disagree with the DM&E/IC&E assessment that the cumulative impacts "are not expected to result in any material change in the amount of such traffic that would move via the former IMRL lines" We ask the STB to place as a condition on the environmental review that the base uaffic and the subsequent change in base uaffic resulting from the D:ME PRB project will be as of today, and not as of some hypothetical consuuct developed by the Petitioner We believe that Iowa communities. should be provided the same opportunities for an environmental review and mitigation of impacts as Minnesota and South Dakota communities had during the Powder' River Consuuction proceedings Below are comments related to each of the Petitioner's requests.. L Commencement of Environmental Review: The Petitioner, DM&EIIC&E, has asked to be relieved of the condition to begin the environmental review at "the time of construction" and allow the environmental review to begin now We concur Given the anticipated schedule for the DM&E PRB constIuction project, there is no need to wait until actual construction begins before starting the environmental review process on the former IMRL lines. This process should include discussions with communities concerning the mitigation of adverse impacts The environmental review process will need sufficient data on future coal routings from the PRB over the former IMRL lines While it may be somewhat premature, with actual traffic routings dependent on actual contract commitments from utilities, we believe reasonable forecasts and order of magnitude estimates can be made and used as a basis for environmental review These types of estimates were made for the PRB construction project Environmental Impact Statement (BIS) and there is every reason to think they can be provided forroutings over the IC&E (former IMRL) lines n. IC&E Coal Routinl! Ban: The peritioner. also requests the coal routing ban be lifted . We concur, but with conditions The Petitioner. argues the ban inhibits the financial discussions with lenders and complicates commercial transactions That is understandable and the ban should not be a hindiance to these types of tIansactions However, the argument that coal traffic being routed over the IMRL was always a part of the PRB construction plan and the ban somehow changes that status quo does not hold up.. The status quo was changed by acquisition and control by the DM&E of the IMRL lines and, as such, that change necessitates the environmental review of those lines In the PRB constIuction project EIS, little or no environmental review was made on the IC&E (former. IMRL) lines, with the exception of the routing and connections in Owatonna, Minnesota At the time of the PRB construction project application by DM&E, the IMRL line in Owatonna may have been considered as an interchange point for PRB coal, however. as far as we can tell ther.e were no signed agreements with IMRL or any other raihoads and hence no estimate on the number of movements over the IMRL lines In fact, at the time of the application (and at the time ofDME acquisition of the IMRL), the IMRL lines were in no condition to move significant numbers of coal trains without significant infrastIucture upgrades. Also, the DME would not have had access to move increased numbers of coal trains in the Chicago ar.ea without agreements with Chicago area railroads Such agreements were not in place The IMRL interchange at Owatonna may also have been consider.ed by DME as an access to the Canadian National (CN) through the Cedar River. Railroad and the Chicago Central Railroad (both affiliates of CN).. Other potential routings off' of the Owatonna interchange could have been north or south on the Union Pacific line In any case, consideration of these potentialroutings does not constitute real plans. At best they may be considered options with no real substance The DME could not move forward with any ofthese options without agreements and the assistance of other railroads. But the acquisition of the IMRL lines changed all that, and that changed the status quo As such it changed the need for an environmental review. With control ofthe former' IMRL lines (now IC&E), DM&E is flee to route as much of the PRB coal tI'llffic over those lines as they wish If they wish to avoid litigation or to satisfy some city for politicalr easons, they could route all of the PRB coal over' these lines Therefore, for fairness sake and to ensure appropriate review, an analysis of the environmental impacts is called for The Petitioner states that no coal will be routed over the IC&E lines until 2009 That's obvious since consttuction is expected to take until then As such, the coal routing ban is unnecessary until then. However, the coal routing ban should be lifted only on the condition that appropriate environmental review and community mitigation agreements are completed by then. m Cumulative Imoacts Review: The potential routing of coal traffic from the PRB constlUction project is a great concern for Iowa and Iowa communities along IC&E (formerly the IMRL) lines The DME has been granted approval of the PRB project by the STB and included in that decision was considerable environmental mitigation for communities along the DME route through South Dakota and Minnesota One must assume that, with the acquisition ofIC&E (formerly the IMRL lines) by the DME, there would be a number of potential routings for PRB coal over these lines Iowa's concern is that these potential routings could have significant impacts (environmental, social, and economic) for communities along these lines The Petitioner argues that there will be little or no cumulative impacts as a result of the acquisition and control of these lines, since the former IMRL lines were aheady considered to be a routing option for PRB coal prior to the acquisition and controL Their argument is that since the PRB constlUction project was approved with the interchange with the IMRL lines and this routing, any change in ownership would have no significant bearing, except for possible increases above what had already been consider.ed The Petitioner goes on to state that little or no change is expected in coal traffic routings as a result of the ownership changes and, as such, there will be little or no need for an extensive environmental review We do not agree The PRB coal traffic impacts on the former IMRL, (now the IC&E) and controlled by DM&E, were never analyzed as part of the PRB construction project because they were only options and not actual routings As stated above, DM&E changed the status quo by their action of acquisition and control of the fOlmer IMRL lines Since these lines are now controlled by DME, they are intimately related to the project and the full traffic impacts should be analyzed, not just the marginal increases that may result because of ownership changes. We believe a full environmental review should be done on the lines expected to carry increased coal traffic. As stated above, nothing prevents DM&E from changing its entire routing ofPRB coal to the IC&E route IfDME, for whatever. reason ( too much political pressure from Minnesota cities, less costly improvements, or any other reason), decides to route traffic over these lines, Iowa communities would be left out in the cold with no recour.se through any process to express their concerns We believe Iowa communities should be tr.eated as fairly as Minnesota and South Dakota communities were in the PRB project decision It is our understanding the DME, to their credit, met with and actively worked with communities to resolve any coal traffic impact issues and agreed to plOvide mitigation in many instances. No less should be available for Iowa communities with no less than a full impact analysis We do not accept that there will be no impact because there is no difference in traffic before takeover. versus after takeover. . lV. ProeeduralSchedule: The Petitioner requests a plOcedural schedule that would include a 20 day public comment period. We feel this is much too short a time for communities to respond. Most communities aJ.e not readily attuned to STB processes and many would not be prepared to respond in such a short time limne We suggest that the DM&E be required to notify each community along the IC&E lines where they expect increased coal traffic The notification should include a clem explanation of what they have presented in this petition and establish a time. to review the railroad's plans with the community A 60 day response by the communities to this notice would then be sufficient with appropriate time being given for the Petitioner to respond to those comments. The STB can then decide on the lifting of any conditions previously imposed as well as determine the appropriate environmental review process.. As the Petitioner has indicated, ther.e is still much time before any coal traffic will begin to move over these lines, and it is, therefore, not necessaJY to hUllY the public in making a response to such an important matter We hope the DM&E would take a proactive stance with the communities along these lines to complete the environmental process. Certificate of Service Comments by the Iowa Department ofTranspOltation to the Petition to Reopen dockets (PO 34177 and FD 34178) by Dakota, Minnesota, and Eastern Raih'oad (DM&E) and the Iowa, Chicago and Eastern Raib-oad (IC&E) have been seIved upon the following Patties of Record on June 1, 2006 via first class mail Mattin W Bercovici Keller & Heckman, LLP 1001 G Street NW Suit 500 West Washington, DC 20001 Diane P Gelth LeonaId Street and Daniel 150 South Fifth Street Suite 2300 Minneapolis, Mo. 55402 Kevin Schieffer DM&E Railroad 140 North Phillips Ave-3rd Floor Sioux Falls, SD 57401 John D Heffnel 555 Twelfth StIeet NW Suite 950N Washington, DC 20004 Steven 1. Kalish McCatthy, Sweeney & Harkaway, P.C 2175 K Street NW Suite 600 Washington, DC 20037 William A Mullins Bakel' & Mille! PLLC 2401 PeImsylvania Ave. NW Suite 300 Washington, DC 20037 Paul A Cunningham HaIkins Cunningham 801 PeImsylvania Avenue, NW Suite 600 Washington, DC 20004-2615 Daniel R Elliott III Associate Gene!al Counsel United Transportation Union 14600 Detroit Avenue Cleveland, OH 44107-4250 Don M Hahs International President Brotherhood of Locomotive Engineers 13 70 OntaIio Street Cleveland, OH 44113-1702 David L Meyer Covington & Burling 1201 PeImsylvania Ave N W Washington, DC 20004-2401 Keith G O'Brien Rea, Cross & Auchincloss 1707 L StIeet NW Washington, DC 20036 Mike Nickolas NOlth Central Farmers Elevator PO Box 366 Ipswich, SD 57451 . . . Peter A Pfohl Slover & Loftus 1224 Seventeenth Street NW Washington, DC 20036-3603 Michael L Rosenthal Convington & Burling 1201 Pennsylvania Avenue NW Washington, DC 20004-2401 Rosalind A Knapp US Department of Trans pOi tat ion 400 Seventh Street SW Room4102C-30 Washington, DC 20590 William W Whitehurst, Jr W W Whitehurst & Associates, 1nc. 12421 Happy Hollow Road Cockeysville, MD 21030-1711 Jeffery 0 Moreno Thompson Hine LLP 1920 N. Street NW Suite 800 Washington, DC 20036-1600 James M Holz MSA PlOfessional Services IDc 3400AsbUlY Road Suite 201 Dubuque, Ia 52002 Ellen Holzman Suite 3000 200 N Lasalle Street Chicago, II 60601-1083 William G. Jungbauer Yeager, Jungbauer, Barczak &Vucinovich 745 KasotaAve Minneapolis, MN 55414 Teny A McillOY 111 West Monroe Street Chicago, II 60603-4080 Joseph R Pomponio Fedexal Raikoad Administration 400 Seventh Street SW, RCC-20 Washington, DC 20004-2401 Monty T Thuchel UTU Gene!al Chairman Local 64 508 NOIth Main Street Janesville, MN 56048-9229 RobertP. VomEigen Foley & Lardne! 3000 K Street NW, Suite 500 Washington, DC 20007-5143 David L Knudson DavenpOlt, Evans, Hurwitz & Smith LLP 206 West 14th street Sioux Falls, SD 57104 William Sippel Fletcher & Sippel 29 North Wacke! Drive Suite 920 Chicago, II 60606-2875 Denise Schneider City of Marquette PO Box 7 Marquette,Ia 52158-007 Gardner William Wisconsin & Southern Railroad P.O Box 9229 Milwaukee, WI 53209-0299 Pual Nilsen Wisconsin Department of Transportation P.O Box 7910 Madison, WI 53707-7910 Thomas F. McFarland 208 South LaSalle Sneet Suite 1890 Chicago, II 60604 . . Michael Wolly Zwerdling,Paul,Leibig, Kahn &Wolly 1025 Connecticut Ave, NW Suite 712 Washington DC 20036 Francis P Dicello 1301 K Street NW Suite 1100East Tower Washington, DC 20005-3373 Pauick Hendricks United Transportation Union 8450 Hickman Road Suite.20A Clive, IA 50325-4307 Richard Kjerstad, Pres South Dakota Farm Bureau POBox 1426 Huron, SD 57350 Christopher Tully Transportation Communications International 3 Resear'ch Place Rockville, MD 20850-3279 Barbara Saddler 1611 30th Street SE Washington, DC 20020 Robert Opal Union Pacific Railroad 1400 Douglas SUeet, Stopl580 Omaha, NE 68179-0001 Robert M Hoppe Monsanto Company 800 N Lindbergh StLouis, MO 63167 Kirk K Van Tine General Counsel, US DOT 400 Seventh Street SW Washington, DC 20590 Karen Morris 150 South Fifth SUeet Suite 2300 Minneapolis, MN 55402 Harold A Ross Gener'al Counsel, Brotherhood of Locomotive Engineers 23195 StoneybrookDrive North Olmsted, OH 44070 Andrew P. Goldstein McCarthy Sweney & Harkaway 2175 K Street NW Suite 600 Washington DC 20037 Dennis Wiese South Dakota Farmers Union PO Box 1388 Huron SD 57350 John Hey, Policy Analyst Modal Division Iowa Department of Transportation