WASHINGTON — The fate of the biggest U.S. rail project in modern times — a $1.4 billion, 900-mile line that has been on the drawing board for 25 years — could hang on a soon-to-be-released environmental impact study.

        Controversy has enveloped the Powder River Basin project, proposed by Dakota, Minnesota & East ern Railroad Corp., to link coal fields in Wyoming with railroad terminals at the Mississippi River.

        Opponents say it would rattle small towns with faster-moving, mile-long trains, spoil remote grasslands and harm local taxpayers who may have to pay for infrastructure improvements.

        DM&E officials argue that the line would be an economic and environmental boon — maximizing pro duction of Wyoming's cleaner-burning, low-sulfur coal for use in Midwest and Northeast power plants looking to reduce pollution.

        The outcome is in the hands of a relatively obscure federal regulatory agency, the Surface Transportation Board. The board, successor to the Interstate Commerce Commission, is a branch of the Department of Transportation.

        The board has said that DM&E's Powder River Basin project is the “largest and most challenging construction proposal ever” to come before it.

        The railroad has spent $40 million in the last four years mapping potential routes through open range, lobbying dubious ranchers and mayors, and filing thousands of pages to the board, which will issue a final environmental impact statement sometime this fall. Then it will decide whether to grant approval.

        DM&E was cobbled together 15 years ago from several failed railroads. Since then, it has earned $3 million to $4 million a

        year hauling grain, clay and wood chips on aging track.

        DM&E envisions earning $100 million a year hauling coal out of the Powder River Basin, a bowl of northeastern Wyoming land that produces a third of the nation's coal — more than Kentucky and West Virginia combined.

        “I've approached this as the long, elusive answer to making this a very permanent, safe and viable railroad in the future,” DM&E President Kevin Schieffer said.
       

Basin destination

               The railroad wants to lay about 280 miles of new track from the Black Hills of South Dakota to the basin. It also would tear up and rebuild nearly 600 miles of track that stretches from southeastern South Dakota, across Minnesota to the Mississippi River.

        Mr. Schieffer said the idea of laying this rail has been around since the mid-1970s, longer than DM&E itself. Two railroads, Union Pacific Corp. and Burlington Northern Santa Fe, already haul coal from the basin.

        Mr. Schieffer said a third line would stoke competition, driving down prices as demand for Wyoming's cleaner coal increases because of more restrictive air pollution standards.

        DM&E estimates that demand for Powder River Basin coal will grow from near ly 300 million tons in 1996 to more than 500 million tons by 2010. The railroad also says its project will produce 6,000 construction jobs over two years, approximately 2,000 permanent rail-related jobs and more coal mining jobs, and other economic benefits for communities along its route.

        Critics, from ranchers to environmentalists, to leaders of some of the towns and cities through which the DM&E already runs, have a host of objections.
       

Local concerns

               Officials in Rochester, Minn., and Brookings, S.D. — where DM&E has its headquarters — are concerned about noise and potentially costly rail-related expenses. They want the rail line to bypass their cities.

        DM&E now runs just three trains a day, hauling an average of 57 cars apiece at speeds of about 17 mph. If the project is approved, it foresees dozens of trains a day, each with 115 to 135 cars moving at speeds of up to 45 mph.

        The route would take the railroad through Buffalo Gap National Grassland in South Dakota and Thunder Basin National Grassland in Wyoming.

        “We have cut up our country into so many bits and pieces that there is really very little prairie land left,” said Nancy Darnell, a rancher who lives near Newcastle, Wyo., in the Thunder Basin grassland.

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