IDOT - Railroad Petition - Surface Trans.
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~ 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