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DM&E Mothballing Powder River Basin Extension

December 3, 2012, 10:19 AM

SIOUX FALLS, SD -

Canadian Pacific Railway says it will "defer indefinitely" plans to extend its South Dakota-based Dakota Minnesota & Eastern Railroad network into the Powder River Basin so it can ship Wyoming coal to power plants in other states.

CP said in a statement Monday that it's mothballing the plan for a 260-mile extension of its network because of a weak demand for coal.

Railroads have been dealing with weaker coal demand because of low natural gas prices and last year's mild winter. There also is speculation that any new regulations to limit greenhouse gases would make coal even less attractive to utilities.

DM&E filed condemnation lawsuits in 2007 against some landowners in northeastern Wyoming for the project but later dropped the lawsuits.

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