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Trail back to rails in Nebraska?

Cowboy Trail may become nation's longest project of a trail reverting to a railroad.

From UTU Daily News Digest and the Omaha World Herald

Map of Nebraska

Stretching across northern Nebraska, the 321 -mile Cowboy Line is believed to be the second-longest trail in the United States, Before being abandoned in the 1980s, it served as a Chicago & North Western Railroad line from Norfolk to Chadron. The rail line brought economic life to the towns in its path, then brought economic collapse when it left.

Now, it may be coming back.

Or it may not.

Interest in bringing rail service back to the trail— now used as a recreation area for bikers and hikers and grazing space for cattle and pronghorn antelope— has increased along with the steady din of trains clanking out of Wyoming's Powder River Basin with loads of coal. An East Coast law firm backed by utility companies that want to see increased competition to haul their coal is urging federal transportation regulators to look at the idea of bringing trains back to the Cowboy Line.

But observers, including the two carriers that currently dominate the lucrative flow of coal out of Wyoming, say the idea is a long shot that will run out of steam. Those same observers— including a spokesman for Omaha's Union Pacific Corp.— say the proposal has too many strikes against it because: Union Pacific and the other big coal carrier, Burlington Northern Santa Fe Corp., already have room to grow on their own routes out of the Powder River Basin.

The enormous costs of putting in new track on the abandoned Cowboy Line would not be justified by its route earnings potential. There are a number of logistical obstacles that would need to be cleared, such as coming up with a direct route from the coal basin to Chadron, the line's western end, and coming up with a link to take coal on from Norfolk to Chicago. A carrier would have to go through the time- consuming process of condemning land to build new tracks and forge agreements with other railroads to use their tracks.

Representatives of both U.P. and Burlington Northern Santa Fe, the nation's two largest railroads, say they have no interest themselves in rebuilding the Cowboy Line. "There is absolutely no way, shape or form," said Union Pacific spokesman John Bromley. "We already have our own main line through Nebraska." Bromley said that the former Chicago & North Western Railroad tried to upgrade and extend the Cowboy Line to the Powder River Basin in the late 1970s and early 1980s but couldn't finance the initiative. It partnered with Union Pacific, which eventually acquired the company in 1995, to build a new rail line from Morrill, Neb., to the Powder River Basin in 1984.

Union Pacific carried 135 million tons of coal from Wyoming last year, a 13 percent increase from its volume a year earlier, Bromley said. He added that the company has spent millions of dollars on additional track and locomotives to increase its coal-carrying capacity. The low-sulfur coal from the Powder River Basin is in high demand because it emits 60 percent fewer pollutants than eastern U.S. coal. Utilities can switch to using the coal and be in compliance with the tougher standards of the Clean Air Act without installing expensive scrubbers.

And at 100 feet underground, coal from the Powder River Basin is more accessible than digging a mile underground in the East. In addition, current carriers say, there is a 200-year supply of coal in the Powder River Basin.

A representative of Fort Worth, Texas-based Burlington Northern Santa Fe, the biggest hauler of Wyoming coal, said the company is not considering the Cowboy Line. Since building in the 1970s a rail line that connects from Gillette, Wyo., to Worland, Wyo., it has increased its annual volume of coal transported from 3 million tons to 236 million tons. "We have unutilized capacity on our existing routes on the Powder River Basin," said Steve Forsberg, a company spokesman based in Kansas City, Mo. "Railroads are in the business to make money hauling freight. We're not in the business of buying up used track. It's generally more efficient to add capacity to existing right of way."

Forsberg said that the cost of building a new rail line is extremely high, at a ballpark minimum of $1 million to $2 million a mile. That means the Cowboy Line could cost upward of $600 million to rebuild, not counting links from Chadron to Powder River Basin and from Norfolk to a Chicago link. "You need to make enough profit to capture the costs," he said.

On the other hand, there are some advantages to building on the Cowboy Line. Washington D.C. law firm Hogan & Hartson on May 9 hosted a conference to rally support for a new Nebraska railroad. Lawyer George Mayo Jr. said Thursday that the Cowboy Line route to the Powder River Basin would be shorter than other routes and would provide a competitive alternative for utilities.

However, Stan Staab, general manager of the Lower Elkhorn Natural Resources District in Norfolk, said he believes it will be easier for a railroad to go through South Dakota than to use the Cowboy Line. "It's difficult to do this, and whoever does it will have to jump through a lot of hoops," he said. "I don't see the rationale. To me, it's not logical to rebuild the rail line."

Staab points out that the steel rails and ties are all removed, and there is no direct route to the Powder River Basin, or to a major hub like Chicago. "Things kind of stop here in Norfolk," he said. "Where do you go from here to go east? "There is corn growing on some of the old train tracks. If they are serious, it's a straighter line to Chicago to go through South Dakota, Iowa and then Illinois. "

Hogan & Hartson is lobbying the U.S. Surface Transportation Board to make it easier for new rail carriers to compete in the Powder River Basin. It filed a petition with the STB on May 16. Incidentally, in an ironic twist, if the STB follows the suggestions of Hogan & Hartson, it may help Dakota, Minnesota & Eastern Railroad. Hogan & Hartson has done work for opponents of DM&E's $1.4 billion proposal to upgrade and extend a line that would tap into the Powder River Basin.

While Brookings, S.D.-based DM&E waits for regulators to approve its plans, its $30 million in start-up funds dwindle. And as time passes, it faces increasing risk of another carrier stepping in to compete with U.P. and Burlington Northern Santa Fe.

For more than a year, the company has been awaiting word on when regulators will do an environmental assessment of its plan. Although DM&E President Kevin Schieffer said he still is forging ahead with his original plans, he said he's not ruling out the idea of using the Cowboy Line instead. Schieffer noted that there would be advantages to the Cowboy Line, such as its more level grade, its potentially efficient access to the all-important Chicago market and the fact that its right of way is still intact.

DM&E runs 1,200 miles from Wyoming to Iowa on some track that is a century old. Schieffer sees the Powder River Basin as a way to make expensive track upgrades and expansion pay off. "We are the small dog in this hunt. We think we have a pretty aggressive nose and a good trail, and we will keep working on it the best we can," he said. "Nothing in the world that is of worth is without risk, and there is plenty at risk."

For some of the towns that were built up along the Cowboy Line, nothing would sound sweeter than the sound of a train whistle. Larry Teahon knows first-hand the devastating effects that a railroad's exit can have on a small town. As city manager of Chadron, a town of about 5,500 in Nebraska's northwest comer, Teahon said he saw the community go into an economic slump after the Chicago & North Western abandoned the Cowboy Line in the 1980s. Chadron is still trying to shake off the setback.

"We didn't build any new homes for 15 years after the railroad left," Teahon said. "We would support anything that would help the economic development of the town."

June 5, 2000

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