The First Great Railroad Fight of the 21st Century By Nathan Barton - Price of Liberty
The First Great Railroad Fight of the 21st Century
By Nathan A. Barton (TM and © 2007)

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March12, 2007

A recent news item included in several well-known libertarian news digests (but mistakenly identified as "Montana" and not the far better state to the south, Wyoming) concerned some of the latest developments in a legal, political, and transportation battle that has been going on for well over a decade in Wyoming and its neighbor to the east, South Dakota. It has had some surprising impacts over the past fourteen years: one of the few true libertarians to serve in Pierre (in the South Dakota legislature) won his term because of anger about the eminent domain portion of the fight.

The Dakota, Minnesota & Eastern Railroad, or DM&E is run by a former US Attorney and former US Senator from SD – so you could call it "thug and goon, inc." and not be too far off. The DM&E is a spinoff of the old Chicago and Northwestern Railroad, and operates a rail line that starts at Winona, MN, goes through Rochester, and across South Dakota: Huron, Pierre, and Wall to Rapid City. There it has its other rail-line, that starts at Colony (northwest of Belle Fourche, SD, in Crook County, Wyoming) and runs around the eastern side of the Black Hills, through Whitewood, Sturgis, Rapid, Hermosa, a string of little towns like Fairburn, Buffalo Gap, Oral, Smithwick, and Oelrichs, and on into Nebraska where it links up with the remnant of the Cowboy Line that once ran across the north side of Nebraska and the vast Sand Hills. The Cowboy Line lets the DM&E connect with the BNSF and reach all directions. The DM&E hauls bentonite (from Colony), sheep, cattle, wheat, a variety of things from Rapid City (including cement and lime) and so on - but no coal. And that is the reason for the fight: coal.

The fight for coal and for railroads to haul the coal is part of a saga that goes back nearly 150 years. The Black Hills of South Dakota and Wyoming were settled during the 1870s because of the public announcement of gold there in 1874, resulting in the last great mainland gold rush in the USA. For a decade, gold seekers had to take the railroad to Sidney, Nebraska; Cheyenne, Wyoming; Bismarck, North Dakota, or somewhere in eastern South Dakota (both then parts of Dakota Territory). Finally, the lines that are now the DM&E connected the Black Hills to the east and southeast. But only the mainline of the Chicago, Burlington, and Quincy, later the Burlington Northern (and today BNSF) which went through the southwestern side of the Black Hills from Nebraska into Wyoming and on to the Northwest allowed rail traffic to the west. Today, that line hauls about 400 million tons of coal a year from the big coal fields of Wyoming and Montana east and south.

When the railroads reached the Black Hills, a fairly dense network of rails soon penetrated the Hills. For decades, in addition to dozens of spurs, there was the "High Line" connecting what is now the DM&E at Whitewood, with today's BNSF at Edgemont, with a connecting line between Buffalo Gap (on the DM&E today) through Hot Springs to Minnekahta Junction. This connection was abandoned back in the 1940s, and the "High Line" from Edgemont (and the BNSF) through Custer, Hill City, Lead and Deadwood to Whitewood (and the DM&E) was also abandoned, but in the late 1980s. (It is now the popular Mickelson Trail – a scenic hiking and biking trail down the length of the Black Hills.) That meant that the only way to get from Rapid City, or points east in SD or MN, is to go down deep into Nebraska and transfer over to the BNSF.

The BNSF, which goes near Mama Liberty's place in Newcastle, Weston County, WY, comes up through Alliance, Nebraska, goes past Crawford (where it intersects the Cowboy Line of the DM&E, as I mentioned above), up to Provo, Igloo, and Edgemont, then continues on through Newcastle and Moorcroft and Gillette. It ties in with the rail line running south from Gillette to Denver and Cheyenne, and on west, eventually to Sheridan and Billings. Today, the BNSF lines are mostly for coal. And it connects from the big coal fields around Gillette (the Powder River Basin of Wyoming) directly to Omaha, Kansas City, Denver, Wichita, various Texas cities and so forth. But they do NOT connect directly or easily to Minnesota and Wisconsin, and even to Chicago they add a thousand miles.

Hence, back in the early 1990s, the DM&E proposed to upgrade their line from Minnesota all the way to Wall, and then construct a new line around the south end of the Black Hills (replacing the long-abandoned, old, and slow railroads through the southern Black Hills). This new line would tie to their existing line between Hot Springs and Oelrichs, and was originally planned to connect to the BNSF near Provo and Igloo, and then share the line up through Weston into Wyodak.

I suspect that a combination of things, including BNSF opposition and concerns about traffic on the line, the fact that most of the coal is coming from the area around Wright and not the coal fields further north, and the fact that the grades are much better if they head west from some place south of Newcastle are all reasons that they want to build straight across. The BNSF originally supported the project but I think a new management has turned against the DM&E as too big a competitor. The UPRR, on the other hand, is supporting them, even though they would compete. (There is a big enough pie for everyone, they figure.)

The DM&E has always made no bones about the fact that they intended to use eminent domain in South Dakota, especially for the bypass around Pierre and the stretch between Wall and Oral -which is about half federal land. They got the politicians, Demo and GOP, to buy in to their idea early: that is one reason that a few old GOP war-horses got dumped, for at least a term or two, back in the 1990s: their rancher and small-town constituents didn't like getting the shaft as far as eminent domain. (Unfortunately, the GOP machine "fixed" things after a while, and so there has been a quick return to "business as usual.)

In Wyoming, they've been trying to buy from willing sellers, but obviously haven't succeeded. The latest news is that a judge has said that the DM&E's surveyors can enter the property of anyone that they are trying to buy land from, whether there is any chance of an agreement or not – and whether the landowners are even considering selling. This survey business isn't a theft - but it is leading up to it, or at least that is what the ranchers are figuring. And I don't blame them.

The DM&E was just turned down, last week, for a 3.2 billion (yes, BILLION) loan from the Federal Railroad Administration, which a lot of us held as good news - if it can't be funded with unsubsidized money, it isn't going to be profitable. There is a need for another railroad into the Powder River Basin: production will hit 500 million tons a year in the next decade, and the rail capacity is only about 400 - the DM&E would provide the remaining 100 needed. Except for the ranchers, I fear that most of the opposition is very hypocritical: people want the electrical power produced by the coal as cheaply as possible, even in places like Rochester, Huron, Debuque (IA) and such, but don't want the coal trains to go through their town. Unfortunately, the present managers of the DM&E, instead of making agreements with ranchers that would include adequate crossing points, protection of the best pasturelands, and other things to reduce the impact, have chosen to pay for political solutions - i.e., use of eminent domain to steal their land. It was a major issue in the 1994 governor's election in SD, and in several legislative elections since then. No one has been shot, yet.

Why is this in "The Price of Liberty"? Well, it is a matter of liberty and of private corporations using outdated and tyrannical government powers (like eminent domain) to do things the way they want to, instead of sitting down and negotiating a fair, honest, and voluntary deal with landowners. And it may have a lot to do with the future development of the libertarian homeland that Boston T. Party and others are trying to create in the State of Wyoming, especially the Northeastern corner, the Black Hills of Wyoming.

Gee, aren't politics and business fun?


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