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While the Surface Transportation Board (STB) is just launching an environmental study on an aspect of the Dakota, Minnesota & Eastern Railroad Corp.’s (DM&E) proposed Power River Basin project, the Federal Railroad Administration (FRA) has completed its environmental review process. And the administration determined the project meets federal environmental review requirements.

Now, the FRA has 90 days to decide whether to approve or reject the DM&E’s application for a $2.3 billion Railroad Rehabilitation and Improvement Financing (RRIF) loan, which would help fund the $6 billion project. The DM&E plans to build a 262.3-mile line through western South Dakota and eastern Wyoming, and upgrade 600 track miles in South Dakota and Minnesota to access the basin.

The FRA adopted the STB’s previously issued environmental impact statements, including all 147 conditions. In addition, the FRA released its own environmental statement, which addresses issues not covered by the STB’s review, such as impacts on public parks, recreation areas, wildlife and waterfowl refuges, and historic sites.

The FRA stipulated measures the DM&E must take to improve safety and air quality if the RRIF loan is approved. The railroad will be required to improve safety at 10 grade crossings in Minnesota and South Dakota, and use locomotives west of Huron, S.D., that meet or exceed the U.S. Environmental Protection Agency’s air emission standards.

Meanwhile, the STB is just beginning to study the environmental impacts of increased DM&E coal traffic on a former I&M Rail Link (IMRL) line. The railroad plans to move coal trains from the basin to points along the line, which snakes through Iowa, Illinois, Minnesota, Wisconsin and Missouri.

When the DM&E acquired IMRL in 2002, the STB imposed a condition restricting DM&E coal traffic from moving over the line until the board completed an environmental review process. The STB’s decision to conduct an environmental review doesn’t restrict the DM&E from operating trains carrying commodities other than PRB coal or improving track on the line.