A start-up regional railroad may be positioned to compete with two of the nation's largest rail lines. The Dakota, Minnesota and Eastern Railroad received a favorable report from the Surface Transportation Board Monday. The Final Environmental Impact Statement outlines nearly 150 environmental requirements. Those will add 10 percent to the $1.4 billion expansion project. Still, company officials predict they'll build their railroad to satisfy a growing market for coal in east coast power plants.

The Environmental Impact Statement basically works as a construction order for the DM&E. It outlines what the railroad has to do to lay 300 miles of new track from western South Dakota into Wyoming. It also details all the environmental requirements for the railroad to rebuild 600 miles of existing track through eastern South Dakota across Minnesota.

St. Cloud State history professor Don Hofsommer says this is the largest project ever before the Surface Transportation Board.

"It's without parallel in modern times, really; the size and scope of the application. It's rather refreshing. It seems to me to be talking about building capacity instead of reducing capacity, which has been the history of the railroad industry since 1916," according to Hofsommer.

The DM&E was born in 1986 after the Chicago and North Western Transportation Company abandoned the line. It's one of the largest regional railroads in the United States. Right now, the railroad hauls grain, clay, lumber and scrap iron.

Don Hofsommer says the expansion will let the DM&E boost all its traffic, not just coal. "That will mean more income, that will mean investment in the property that will mean a better transportation system to existing customers. Right now, I think that's a long-mile railroad and the traffic density is not great, which means profits are thin. So I look at this as a monumental insurance policy for the company and for its customers," according to Hofsommer.

Rail experts have talked about a new line into the Powder River Basin in Wyoming since the 1970s. Sixteen years ago the STB approved a plan to haul coal across Montana. That proposal hasn't been gotten anywhere because the plan has been held up in court.

Right now, two railroads have the lines out of the Powder River Basin locked up. Burlington Northern Santa Fe and Union Pacific haul nearly 300 million tons of coal from Wyoming. Breaking that duopoly is an investors dream.

Robert Banks, a railroad consultant and engineer based in Washington DC, says 51 percent of the energy consumed in the United States is produced from coal. It's a hot commodity.

"For those plants to function, they've got to have a constant steady stream of coal and the biggest single source of minimum pollution coal is the Powder River Basin. So any outfit which has to move that coal has got a ready-made market," Banks said.

Banks says DM&E should have no trouble raising the money they'll need to complete the project.

Company President Kevin Schieffer says rebuilding and expanding the line is pure economic development. He predicts the project will create 5,000 new temporary construction jobs and 2,000 permanent jobs when trains start rolling. Schieffer says there could be even more jobs created from spin-off industries that open along the line.

"There are things that are going to develop out of this project that you cannot measure today simply because the fact that you have to come back to the point that this is a fundamental transportation infrastructure project that will transform this line from a back-country gravel road into a superhighway in the transportation world and the railroad specifically that is going to carry with it profound economic development opportunities," Schieffer said.

To Kevin Schieffer, DM&E is a railroad that needed saving and now has a future. Final approval from the Surface Transportation Board will come before the end of the year.