The Rochester Post Bulletin reports in Canadian Pacific drops coal plans:
Canadian Pacific is dropping plans to extend its rail network into the Powder River Basin, abruptly ending Rochester's decades-long fight to stop the increased coal train traffic through town planned as part of that $6 billion plan....
. . .Canadian Pacific will take a fourth quarter charge of approximately $180 million on its books, on its option to build there.
The energy transportation market is changing rapidly. Canadian Pacific has seen an uptick in crude oil being moved from the fields of North Dakota and Montana, but so far it has not moved any through Rochester, Greenberg said.
The railroad has also started moving some silica sand on the DM&E network, Greenberg said. The sand is mined in southeastern Minnesota and western Wisconsin for use in hydraulic fracturing in oil and natural gas mines in the West.
"I can't speculate what may or not take place in the future," Greenberg said. "We're a transportation provider for our customers and we respond to their shipping needs."
Bluestem had taken a long look at the railroad and frac sand mining in Frac sand, Bakken and Ackman: the DM&E's fate in Canadian Pacific Rail's December strategic plan.
The company has announced that it will share more plans in its Investor Conference and Webcast December 4 and 5, 2012:
E. Hunter Harrison, President and Chief Executive Officer, and his senior executive team will provide details on CP's multi-year strategy and efficiency and growth objectives.
The two-day program will include both presentations and interactive question and answer sessions.
On December 4 and 5, a live audio webcast of the presentations along with the December 5 slides will be available on CP's website at www.cpr.ca, 'Invest In CP' section. CP recommends logging in 15 minutes prior to the scheduled start.
The webcast and the presentation slides will also be archived for 24 months on the website.
Those readers watching for the railroad's plans in the Bakken oil fields and the frac sand mining industry in Wisconsin and southeastern Minnesota should check it out. The Post Bulletin reports that an Olmsted County commissioner says that the tracks are for sale:
Olmsted County Commissioner Ken Brown said the announcement is a "good deal" for Rochester, but he cautioned that Canadian Pacific is trying to sell those tracks, and a new buyer could proceed with the Powder River Basin plan. . . .
Will CP confirm that in the investor's conference? The press release does not say the existing tracks are for sale:
Canadian Pacific (TSX:CP)(NYSE:CP) today announced it will take a fourth quarter pre-tax non-cash charge of approximately $180 million ($107 million after tax) on its option to build into the Powder River Basin (PRB).
When CP acquired the Dakota Minnesota & Eastern railroad in 2007, it also acquired the option to build a 260-mile extension of its network into coal mines in the PRB. Components of the charge include the option, engineering design costs, land and capitalized interest.
It is CP’s intention to defer indefinitely plans to extend its rail network into the PRB coal mines based on continued deterioration in the market for domestic thermal coal, including a sharp deterioration in 2012.
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