G&W to buy DM&E from CP Rail

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Charles

So much for that extension into the Powder River Basin.

I wonder if CP may be concerned with the downward potential for coal traffic? Enviros and the US EPA want US coal utilization, already down substantially due displacement by natural gas, to continue to reduce to ultimately zero. While I don't know if the EPA has formulated a position, enviros want coal exports eliminated as well. Only time will tell what ultimately happens.

I wonder how much G&W will grow before it has to register as a Class 1 railroad?

the powder river extension was an illusion used to raise investment from the unknowing. there was only one power station=otter tail- that could have been a player. i found no others that would pay for the 200 mile plus trackage needed . there were no economics that would support an intermodal move to cover the non-rail portion. lastly, when threatened with an alternative, the controlling railroad would simply lower the price. i had the joy of this with a south carolina gas & electric move in augusta.
as for the future of coal? it is rosy. the folk in washington cannot end something that provides us with the highest standard of living in the world. think windmills can provide 65% of our electricity? ken patrick

Wind and other intermittent sources? Of course not. But a number of enviro organizations are now reluctantly advocating new nuclear. Smaller reactors in the 100 to 300MW class are under very active research by the industry. If one looks at the growing list of generating station retirements scheduled over the next few years, the vast majority are coal fired. The list of new ones are virtually all natural gas fueled.

Coal has an export market yet.

I was being sarcastic, I think that thing was just a scheme to make the property have the appearance of a greater value, but I also think CP wanted the former RI "Spine Line" and related routes on the east end, all along.

scharnhorst wrote:I wonder how much G&W will grow before it has to register as a Class 1 railroad?

If you are a company that owns a bunch of Class-1 shortlines, or even Class-2 regionals,
no amount of those will ever make you a Class-1, unless they were all connected into one railroad..
which they are not in the case of the G&W.

So even if G&W had enough total trackage to qualify as a Class-1, it would still never be a Class-1
if all that total trackage is spread out over dozens of shortlines..

G&W is not one big railroad..it's lots of small railroads.

Scot

mr. t.j. no. the current approach is stb rate cases where the offending railroad has 'lane' dominance. this convoluted approach evident in the plastics rate case with csxt. csxt argues that they don't have dominance in the 20+ lanes - there are trucking alternatives. really? last time i looked, the csxt rates were incredibly high. something like $8/car/mile. some short line folk consider plastics their savior. i believe the rates preclude economic growth. ken patrick

lvrr325 wrote:Coal has an export market yet.

I was being sarcastic, I think that thing was just a scheme to make the property have the appearance of a greater value, but I also think CP wanted the former RI "Spine Line" and related routes on the east end, all along.

Sorry - the Spine Line? The C&NW won that fair and square back in the early 1980s, and the Soo/CP won't ever get a sniff of it until they get merged into the UP (unless you mean some sort of trackage rights situation.) Are you talking about the IAIS?

And yes, Powder River coal definitely has an export market still. I wonder whether the old DME management had visions of it being transshipped out of Port Arthur, or being burned in Mexican power plants... either way, EHH definitely doesn't think it's THAT strong of a market.

G&W has renamed its portion of the old DME Rapid City & Pierre Eastern Railroad and has received 673 miles of track and 51 locomotives
of mixed DME and ICE heritage. RC&PE has already started repainting the loco's into the corporate orange image. The bulk of the locomotives
are SD 40-2's.

I think the GWI paint job is ugly looking. Seems like every time they buy something up they keep the name but get rid of the old colors.

G&W eventually paints all its locomotives the corporate orange to signify that a locomotive belongs to G&W and the railroad to which its assigned is secondary and said locomotive can be reassigned to another railroad without changing the lettering. It does the all the time
example: a B&P loco can move to R&S etc and the general public would not even notice. This is the reason for the orange paint its all about
image. Proof being as soon as they buy a shortline, first thing that gets done is get the orange paintbucket out!

How is that different than any other large railroad that buys a smaller railroad? At least G&W keeps the smaller railroads' names, which the other big players usually don't do.

I'd love to see them bring their buckets of orange paint up to Maine on the B&M and MEC. They seem to know how to run a railroad.