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Railroad Newsline for Monday, December 11, 2006

Compiled by Larry W. Grant

In Memory of Rob Carlson, 1952 –2006

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RAIL NEWS

HOLIDAY 'EXPRESS' ROLLS IN

SANTA CLARITA, CA -- Hundreds of toy-clutching, blanket-wearing residents crowded the streets surrounding the Metrolink Station in Newhall Friday night, as the Santa Clarita Valley experienced a "Polar Express" moment of their own.

As the 10th anniversary of the Metrolink Holiday Toy Express, officials teamed up with the Los Angeles County Fire Department's annual "Spark of Love" holiday toy drive to produce the fun-filled event, which included a toy collection dropoff, and an eight-car long Metrolink train, decorated with more than 50,000 sparkling lights, eight talking animatronic reindeer heads, and enough holiday cheer to warm even the coldest of crowds.

Photo by Francisca Rivas here:

[www.the-signal.com]

By 20:00 a massive crowd of eager families had already filled the long platform of the station's loading dock while awaiting the Toy Express to pull in for a scheduled 20:25 stop off in Newhall.

Starting at the Metrolink station in downtown Burbank before making a second stop at the Sylmar station, the Holiday Toy Express appearance in Newhall would be the last SCV area stop of the holiday season.

As excited children ran through the crowd, some parents took pictures and sipped on coffee and hot chocolate to stay warm, while others donated toys and watched their children mingle with a group of spirited firefighters who were loading donations into a squad of fire trucks and engines.

Toys donated to the "Spark of Love" drive will go to the Department of Children and Family Services for distribution to the foster children of Los Angeles County, with any remaining toys distributed to nonprofit charitable organizations within Los Angeles County.

"Thousands upon thousands of toys," said Los Angeles County Fire Department spokeswoman Stephanie English, when asked about the success of the event. "We'll for sure fill this squad, and that truck is already full, it's just amazing. It's a wonderful reflection of the Santa Clarita Valley."

"This turnout is one of the biggest ever, this is awesome," said Los Angeles County Fire Department Capt. Mark Savage. "We sent out fliers to the schools encouraging elementary school children to bring a toy, and they brought more toys than I have ever seen at one of these stops."

While firefighters continued to collect toys, the large crowd eventually forced officials to close the intersection at Railroad Avenue and Market Street - and place caution tape across railroad crossing signs - just to accommodate spectators.

But with most of the crowd still clamoring with anticipation, the Holiday Toy Express was not on time for its scheduled arrival.

"As usual they're late," yelled one crowd member. "Have you ever seen a train that's on time?"
However just before 21:00 the distant sounds of bells and whistles could be heard and the glow of the train's main headlight alerted the audience to the train's impending arrival mere moments before thundering into the station.

After a brief introduction from Metrolink officials, Santa Claus encouraged anyone still holding a toy to take it over to "his friends with the fire truck."

For waiting so patiently audience members were presented with a roughly 30 minute entertainment program that included holiday music, appearances from Santa and Mrs. Claus, and the seemingly misplaced inclusion of a tedious pirate themed skit.

"When we first moved to town this was the first (toy drive) we heard about, so this is just the one we always come to," said Newhall resident Kirsten Chapman, who was in attendance with her 4-year-old daughter Allison. "My daughter enjoyed seeing the Santa part, so it was fun." - Jesse Muñoz, The Santa Clarita Signal

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SOUTHERN STYLE

SANTA FE, NM -- Just as its home in the Santa Fe Railyard gets a facelift with a city redevelopment project, Santa Fe Southern Railway’s train is also changing its face.

The 15-year-old investor-owned rail line will transform from a hodgepodge of multi-colored passenger and freight cars into a unified, sleekly painted brand of train travel. A few cars have already been repainted, but by the railroad’s official March birthday, the whole train will be a flash of turquoise, red and yellow.

Railroad president and general manager Carol Raymond spent most of the summer working with a designer to create a new color scheme and logo for the train.

Photo here:

[photos.freenewmexican.com]

Raymond has worked for Santa Fe Southern for more than 10 years, taking over day-to-day management duties from her husband, Bob Saar, in 2005.

Saar was one of six investors who in 1992 pooled about $400,000 to buy the short line from Atchison, Topeka and Santa Fe Railway. At the time, the group feared that absent its intervention, the 18-mile line from Santa Fe to Lamy would be severed from the national rail system.

Over the next decade, Santa Fe Southern worked its way up from carrying freight such as beer and lumber to shuttling passengers — from school groups and private tourism — struggling to turn a profit.

Four investors have joined the company since it began and some have sold their interests. This year, newer investor Karl Ziebarth became majority shareholder. Otherwise, the basic financial structure of the company has not changed since it was formed, said Raymond.

In 2005, the railway sold the 18 miles of track and right of way to the state, which was gathering steam for its commuter-railroad project, the Rail Runner Express. The state trains are already running in Albuquerque and are due to travel to Santa Fe in another two years.

While train stations approaching the city are still undetermined, planners say the commuter trains will terminate and begin in the Railyard.

Train enthusiasts were part of a community effort to take back the vacant and mostly-blighted land along the train tracks in Santa Fe. From the city’s purchase of the 50-acre Railyard to its extensive plans for redevelopment of public spaces and new privately leased commercial ventures, Santa Fe Southern has been along for the ride.

The company leases the historic Santa Fe Depot building from the city and has worked with the state on upgrades to the train tracks that are needed to bring in commuter train service. Construction on the new roads, the park and other projects at the Railyard has already begun, and some renovated buildings have already reopened with new uses.

“We have been such strong supporters of this Railyard redo and we’re so excited because it’s going to be different,” said Raymond in a recent interview from her office — a caboose parked near the Railyard depot. “It’s going be great for locals and its going to be full of visitors and we’re just going to have so much more business, I believe.”

Raymond said having the Santa Fe Southern trains repainted before the state-run Rail Runner Express trains start arriving in the depot will be important since the local trains will sit next brand-new state trains painted white and gray with red roadrunner-head logos.

“We have been working toward this since way before the Rail Runner was gleam in Governor Richardson’s eye, but because we are such a small company, things like this took a while,” said Raymond. “But of course the Rail Runner is so gorgeous and such a great representation of New Mexico that we want to shine as beautifully.”

This fall, rust spots were covered with primer and painters went to work changing the motley cars into a unified “consist,” train lingo for cars that make up the train.

The first repainted car rolled up in front of the depot last month.

“I was there jumping up and down. We all were. We were just so excited,” Raymond said. “I just think it looks phenomenally beautiful. It looks so snappy and so festive, and that is what we wanted.”

The new paint also has a graffiti-resistant coating aimed at helping the trains stay ahead of taggers. Raymond said she expects that more activity and lights in the Railyard will have an effect as well.

Assembling the seven-car rolling stock for Santa Fe Southern took several years, and the company had to put nearly $2 million into restoring their structures, including the axle and wheel mounts and brake riggings, Raymond said.

The current train set includes a 1952 General Motors locomotive with a 16-cylinder, 1,600 horsepower diesel-electric engine; three passenger coaches that were part of the Central Railroad of New Jersey and still bear its name; a passenger and baggage car; an open-air flat car and a livestock service caboose from 1946.

The company added amenities to the cars, including sound systems and holding tanks for onboard rest rooms.

“Of all the features we’ve added, the one that I am proudest of is the one that powers all the systems aboard — sound, light and heat. All of these systems are powered by the sun,” she said, explaining that on the roof of each car are solar panels that collect energy stored in a series of batteries.

Big changes are still ahead for the small company. Raymond says she wants to add a hardwood floor to the baggage deck on one coach to use it as a dance floor.

While Santa Fe Southern’s freight business still makes up about a third of revenue, it lost half its freight this year when Anheuser-Busch decided to move alcohol in Northern New Mexico via trucks instead of trains.

Raymond said freight loads of lumber and other building supplies, however, seem to be increasing. The railroad will probably carry 200 freight cars this year.

Another future endeavor could be commuter rail service to Eldorado. Pilot trains never convinced local government to invest more money in the idea, but Raymond said she believes rail is still a good idea for moving people between Eldorado and Santa Fe.

Saar, who served as Santa Fe Southern general manager and president from 1994 to 2005, said that although at times the endeavor was difficult, it’s been worth it to him and to the community.

Had the investors not bought the short line, a company that tears up tracks and makes a profit from scrap iron and land sales was ready to buy it, he said. The state’s current commuter-rail project and future passenger endeavors are within reach now thanks to that plan, he said.

“Being in the railroad business is fun. I don’t need anymore payoff than that,” said Saar as he took a break from stringing Christmas lights at the depot. “I’m standing here next to railroad car that is being rebuilt. It was a car I bought in St. Louis that was destined to die, and it’s going to get painted soon. And we are sitting on a piece of track that is going to have commuter trains sitting on it before too long. I’m thinking, if we hadn’t done this none of that would be happening. It was time well spent.” - Julie Ann Grimm, The Associated Press, The Santa Fe New Mexican

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DM&E HEARING HITS OPPOSITION

SIOUX FALLS, SD -- A dozen landowners, through attorney Bill Janklow, are asking for a delay in a planned hearing over the Dakota, Minnesota & Eastern Railroad's request to use eminent domain.

The South Dakota Transportation Commission plans to take input Dec. 22 in Pierre to determine whether the rail line can use the legal procedure to gain the right to cross private land for its proposed $6 billion expansion.

State law allows railroads to take land from unwilling owners only if a project is for a public use consistent with public necessity. Railroads also must have already negotiated in good faith to acquire the property.

The DM&E project would rebuild 600 miles of track across South Dakota and Minnesota and add 260 miles of new track to Wyoming in order to haul low-sulfur coal eastward to power plants.

The estimated cost is $6 billion, with $2.3 billion coming from a federal loan DM&E is seeking and the rest from private sources.

The DM&E project has the support of South Dakota Gov. Mike Rounds, the state's entire congressional delegation and many agricultural and business groups.

But it's opposed by some landowners along the route, particularly those whose ranches in southwest South Dakota would be crossed by the new track.

Other opponents include residents in Pierre and Brookings in South Dakota, and the city of Rochester, Minnesota, and its Mayo Clinic.

Janklow, a former South Dakota governor and congressman, represents some of the landowners as a private attorney.

He sent two motions on Friday to the South Dakota Transportation Commission asking that his clients be allowed to intervene and that the hearing be postponed.

Janklow provided copies of the documents Saturday to The Associated Press and said his biggest concern is that landowners were given no formal notice of the hearing, had limited time to get on the agenda and the hearing is days before Christmas, which makes travel difficult.

"The concept isn't bad. We need competition for railroads in America," he said. "But this isn't how you do it - by running over the rights of individuals and trampling them. They tried to do it, but we're going to stop them."

Kevin Schieffer, DM&E president, said Saturday the landowners took themselves out of the process because he tried to negotiate an agreement with them. And the railroad had nothing to do with the timing of the process or the hearing's schedule, he said.

"I would say this is the same kind of delay tactics that the opposition to this project has used for years. There have been dozens and dozens of opportunities for landowners to participate over the years," Schieffer said. "This is about opposition. This isn't about timing."

A pre-hearing conference call on the details of the full hearing is scheduled for Monday. - The Associated Press, The Billings Gazette

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CITY SELLS MOST OF SHORTLINE RAILROAD

CHILLICOTHE, MO -- The city of Chillicothe, Missouri is selling the majority of the Chillicothe-Brunswick Shortline Railroad to a company for nearly $1 million.

The contract was signed by Montoff Transportation Company and returned to the city on Thursday along with a check for $97,600, which is 10 percent of the total purchase price.

Montoff Transportation, LLC, a three-man partnership based in Seattle, Wash., has agreed to buy a section of the 37-mile railroad - a section which has been embargoed for the last couple of years - for $976,000. The city is retaining ownership of the rail line through the industrial park and to a point east of town for future development.

City officials offered the contract to Montoff Transportation in October after the council approved the sale with a 5-0 vote taken in executive session. Information about the contract and city vote were released yesterday.

The city bought the shortline railroad just three years ago from Green Hills Rural Development for $32,500 and has spent, in all, about $349,000 in railroad-related expenses, according to City Auditor Theresa Kelly. Since the city acquired the railroad, revenues paid to the city from the railroad's operator as well as from the sale of small parcels of land along the line have been $148,302. During the last couple of years, the city has sold a small portion of the line to Ray-Carroll Grain and small portions of land which abut the railroad right-of-way.

Although expenses have exceeded revenues, the city is getting a sizeable return on its investment, according to Mayor Todd Rodenberg.

City officials spent many hours discussing the future of the railroad, realizing that most of the line was deficient. It was estimated that it would take $10 million to bring the entire rail line up to safety standards which, according to the mayor, would not be a viable option. - Catherine Stortz Ripley, The Chillicothe Constitution-Tribune

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SOME LAWSUITS SETTLED IN MINOT CPR DERAILMENT

MINOT, ND -- The inclusion of a mediator to assist in relations between plaintiffs in the CP Rail derailment lawsuits and the railroad has apparently aided in the settlement of some of the cases in recent months. Exactly how many settlements, though, is hard to pin down.

Fargo attorney Mike Miller, who represents many plaintiffs in suits against CP Rail, said he wasn’t aware of a large number of recent settlements.

“I understand that there have been some within the last one and a half to two months, but I haven’t settled any cases for quite some time, he said. “We’re talking, though. We’re always interested in discussions to bring about fair settlements for our clients.”

Retired U.S. District Court Chief Magistrate Judge Jonathan Lebedoff has been used as a mediator to assist in facilitating settlements between the railroad and the plaintiffs.

Just who appointed him, however, is apparently a small matter of debate. Miller said that Judge Tony Leung, who presided over the cases when they were in Hennepin County District Court in Minneapolis, appointed Lebedoff. Calls to Hennepin County District Court seeking information on Lebedoff were also referred to Leung’s judicial staff, “since he appointed (Lebedoff).”

The cases are now under the umbrella of U.S. District Judge James Rosenbaum in U.S. District Court, awaiting his decision as to whether the cases will be dismissed due to pre-emption, since federal courts had ruled that the railroad was immune to these types of actions prior to the cases being heard by Leung.

However, Timothy Thornton, a transportation and public utilities attorney from Minneapolis who represents CP Rail, maintains that Lebedoff was not “appointed” by Leung to the case, but doesn’t dispute that Lebedoff is involved as the mediator.

“We’ve been using him for about a year, maybe a little more,” said Thornton.

Thornton was circumspect when he was asked if the use of a mediator had caused an increase in the number of settlements. “Some cases have settled,” he said.

Minot attorney Mark Larson, who also represents plaintiffs in the lawsuits, said that to his knowledge, there hasn’t been a “gold rush” of people settling recently.

“I heard Mr. Thornton say ‘scores have settled,’ and I would just say there are also scores that have not settled under the same scenario,” he said. “We can only settle if the railroad brings the appropriate amount of money forward.”

Larson said that Leung appointed Lebedoff to mediate the cases for settlement, and that Lebedoff is still being used now that the cases are in Rosenbaum’s jurisdiction because Lebedoff “is a helpful guy and he knows what’s going on.”

Lebedoff declined to comment when he was contacted by The Minot Daily News, calling the mediation an ongoing process and saying that it was his policy in the past as a judge and remains now not to comment on ongoing matters.

Miller believes that the next few months are a crucial time in the progress of the cases.

“It’ll be interesting to see what happens now,” he said. “The issue of pre-emption is before the Eighth Circuit right now. It probably won’t be decided until late winter or early spring.” - Dave Caldwell, The Minot Daily News

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NS RAILROAD TO PAY FPR SLIDELL BOAT LAUNCH REPAIRS

SLIDELL, LA -- Repairs to the pull-in and parking area at Robert Landing, the city of Slidell, Louisiana's only public boat launch, are scheduled to get under way in early November once the city receives a check from Norfolk Southern Corp.

Railroad crews damaged the newly paved launch area and parking spaces last year while using the site to load and unload steel used in rebuilding 5 miles of bridge, trestle and track across Lake Pontchartrain.

Photo here:

[host.sttammany.com]

The work, completed in 16 days, reconnected the vital freight link between New Orleans and the Slidell area that was broken by Hurricane Katrina's winds and storm surge.

The boat launch, which is at the Fremaux Avenue entrance to Heritage Park on Bayou Lane, has remained in operation since then. However, city Public Operations Director Mike Noto said, the work in the staging and shipping area left sections of Robert Landing badly rutted.

Ricciardone Site Services Inc.of Slidell has the $44,000 contract to remove all the existing asphalt, repair or fill holes and repave the site. Once the work begins, the project is expected to take about 30 days to complete. - StTammany.com

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CORN YIELDS WILL MEET DEMAND, GROWERS SAY

Iowa corn farmers said Friday that there will be enough corn to serve the state's ethanol plants as well as other customers.

Leaders of the Iowa Corn Growers Association and the Iowa Corn Promotion Board held a teleconference to dispel economists' estimates that Iowa, the No. 1 corn-producing state, might need to import corn to meet demand.

Farmers will plant more acres and get better yields, leaders of the corn industry said. At the same time, they said, ethanol expansion will be slower than expected.

Craig Floss, head of the Iowa corn groups, said economists have based their estimates on announced plans and schedules for the construction of ethanol plants.

Iowa currently has 25 ethanol refineries. It leads the nation in production, with 1.6 billion gallons a year. Fifteen other plants are under construction and dozens more are planned.

"All of these plants are probably not going to be built, and certainly not on schedule," Floss said. Construction limitations would dictate that some will have to wait for contractors and supplies, he said.

"Given the market signals, we don't think the demand is going to increase as much as they are saying," Floss said.

Kyle Phillips, a Knoxville, Iowa, farmer and chairman of the Iowa Corn Promotion Board, said new corn hybrids are expected to increase yields by 2.5 percent per year.

In addition, Phillips said, farmers will shift some acres from soybeans and some from the Conservation Reserve Program to grow more corn. - Bill Hord, The Omaha World-Herald

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MIT'S NEW STRAIN OF YEAST CAN BOOST ETHANOL PRODUCTION

Massachusetts Institute of Technology scientists say they have engineered a new strain of yeast that can increase the speed and efficiency of ethanol production.

The strain is able to withstand higher levels of alcohol and glucose than those currently used to ferment corn and other plant material into ethanol, MIT said in a release Friday on its Web site. During a 21-hour period, the new strain produced 50 percent more ethanol than normal yeast, the school said.

"Using this approach to engineer similar tolerance traits in industrial yeast could dramatically impact industrial ethanol production," according to the statement from MIT, which is located in Cambridge, MA.

The U.S. fuel industry is increasing the use of ethanol to stretch gasoline supplies, improve engine performance and reduce pollution. Fuel blenders earlier this year phased out a rival additive, methyl tertiary butyl ether, or MTBE, after changes in U.S. energy policy.

About two-fifths of gasoline currently sold in the United States is blended with ethanol at concentrations as high as 10 percent, according to the Energy Department.

In the United States, ethanol is mostly made from starch in corn kernels. The starch is broken down into basic sugar components that are fermented using yeast in a process that converts them to grain alcohol. High ethanol levels are toxic to yeast, MIT said.

One bushel of corn yields about 2.8 gallons of ethanol. - Bloomberg News, The Omaha World-Herald

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HOLIDAY TRAIN MORE POPULAR THAN EVER

GRAPEVINE, TX -- Response to the Grapevine Vintage Railroad's extra holiday-season runs has been huge, and all runs were sold out by Thursday, General Manager Tom Wayne said.

In the weeks before Christmas, the railroad excursion train makes short extra runs called the North Pole Express through Dec. 23, heading east of the city to Interstate 635 and back.

The train normally runs to Fort Worth once a day on Saturdays and Sundays.

Last year, there were 45 North Pole Express runs, but this year officials scheduled 56 to fill demand.

The train size is the same, and it's hard to tell where the extra demand is coming from, Wayne said.

The four-car trains carry 300 people per trip, he said. For information: 817-410-3123 or [www.gvrr.com]. - Bill Teeter, The Fort Worth Star-Telegram

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COAL-FIRED POWER PLANT DEBATE HAS SOME NEIGHBORS FEELING BURNED

GREAT FALLS, MT -- Backers and detractors who live nowhere near the proposed $515 million Highwood Generating Station are waging a ping-pong-like debate over its pros and cons.

But in the Salem, Montana area, where families have lived and worked the land in relative peace for generations, the divide cuts especially deep.

The coal-fired power plant is planned for their back yard. And disagreement over the compatibility of such a big industrial plant with family farms and homes touched off a neighborhood rift that's creating hard feelings and talk of a court challenge.

Proposed plants elsewhere in Montana are mostly welcomed. Highwood Generating Station is dividing neighbors such as Duane Urquhart, who owns a portion of the land where the plant would be constructed, and Bob Lassila, owner of land that would abut it.

The two men attended grade school together, but they see the coal-fired plant through a vastly different lens. Urquhart supports it. Lassila doesn't.

"We're on speaking terms," Lassila says, "but we don't go dancing."

On a recent day, a thin layer of white snow wasn't enough to cover the vast golden wheat fields that mark the proposed plant site six miles east of Great Falls. The Highwood Mountains stood purple against the sky's gray canvas.

The only movement was grain trucks and a few pheasants crossing the roads.

Against this backdrop, neighbors are few and far between. But they came together to fight Southern Montana Electric Generation and Transmission's proposed 250-megawatt coal-fired plant.

In the big picture, they are a handful of the some 1,800 people who commented on the plant to county, state and federal officials. But they're the only ones living within spitting distance of the proposed facility, and after a late start in getting involved, they're now speaking loudly.

Their main beef is they don't think a power plant belongs alongside farm fields.

"That's the best agricultural land in the state, period," said J. C. Kantorowicz, whose family has lived in the area since 1967.

For their part, the Urquharts feel blindsided by the 11th-hour opposition.

"Why didn't some of these people say anything a long time ago? They knew about this two years ago," said Scott Urquhart, who is Duane's nephew and owns some of the land where the plant is proposed.

Most of those complaining about the plant, he said, won't be able "to see it, taste it or smell it."

"It's not going to be an impact on them, not nearly what they think," he said.

The Highwood Generating Station isn't the only coal-fired power plant proposed in Montana, but it's creating some of the most trouble in the neighborhood.

A 500-megawatt power plant and coal mine proposed 20 miles west of Circle received mostly positive reaction, said McCone County Commissioner Connie Eissinger. A similar plan in the 1980s encountered more opposition. Eissinger believes that's because today's coal-fired power plants are cleaner. The county also is in the midst of a population and economic decline.

"So everybody is kind of excited about it, especially Main Street (businesses)," she said.

Concerns about pollution and water quality were raised in the discussion of a coal-to-liquids power plant and 300-megawatt plant planned at Bull Mountain, 12 miles south of Roundup, said Wayne Marchwick, who works in environmental health, public health and planning for the Central Montana Health District.

But opposition is limited, he said, crediting that to geography. The Bull Mountain area, he said, is "frontier and open space."

"We're in a definitely different situation than what you have up there outside Great Falls," Marchwick said.

Neighbors' opposition pits them against the county, SME and the Urquhart family, which owns the 840 acres where the plant would be constructed. Coal would be delivered to the plant via railroad from southeast Montana. Electricity would be used by five rural members of the SME cooperative and the city of Great Falls.

Many of the opponents are second- and third-generation farmers and ranchers, but newer residents from Great Falls and elsewhere also joined the fight.

"We have a beautiful view of the Highwood Mountains," said Lonnie Ward, an Alaska Airlines flight attendant who is considering a permanent move to 800 acres of land here once farmed by her grandparents.

The Highwood Generating Station, however, has her thinking twice.

"It will certainly factor into any future decision we make," she said.

The county recently rezoned the land to heavy industrial, making way for the plant. That came over the objections of neighbors who submitted a petition against it. The petition showed 90 percent of landowners closest to the plant opposed it. The figure was 80 percent when the circle was widened. A total of 67 property owners were contacted.

As a group, the Salem-area neighbors are leaving environmental arguments to others while they focus on what they say is the county's inappropriate decision to allow heavy industrial use on prime agricultural land, said Tammie Lynn Smith, a landowner who helped organize the petition against the rezoning.

The landowners, she said, are not scientists.

"They're the best ones to represent land use," Smith said.

Under Montana law, rezoning can be challenged, and Smith said a legal challenge is being explored.

When county commissioners contemplated the rezoning, Commissioner Joe Briggs said both planning staff and attorneys agreed the change was in compliance with the county's growth policy and met the required 12-point test. In light of that, he said, not approving the rezoning would "set a dangerous precedent from which there is no return."

The plant still requires final approval from state and federal regulators, who are reviewing the environmental impacts of the facility. A decision is expected this spring.

Sixty-nine-year-old Kent Holtz, who also went to school with Duane Urquhart, said he shook Urquhart's hand following the commission's rezoning vote and asked him how he was holding up.

He insists his opposition isn't personal. The Urquharts, he said, certainly have the right to sell their land to SME for a power plant.

"Then again, it's our right to protect the value of our land," he said. Holtz's parents bought his property in 1932.

Lassila, also 69, is an organic farmer with 2,750 acres. A portion of his land would abut the Highwood Generating Station property.

"I believe it's going to reduce my property values," he said.

He previously pondered selling land in the future, figuring there would be a demand for housing as Great Falls grows eastward. With a coal-fired plant in the area, he no longer thinks that's an option.

"People wouldn't want to move close to that," he said.

The landowners are not obstructionists against "good things that come into an area," he said. But they contend a coal-fired plant "is not the proper type of industry."

Kantorowicz initially supported the plant because of the jobs it would create. He changed his tune following a meeting between SME and landowners. When questions were asked about the impact of the plant on roads and land values, Kantorowicz says he felt as if he was "brushed off."

He's especially irritated because he says plans for the power plant show there's a rail line on his property but he hasn't been contacted about it.

The fact he knows the Urquharts gave him pause in coming out against the plant.

"But I think there is more damage that is done with the plant being built than irritating my neighbors or opposing my neighbors on this," he said.

The Urquharts and SME officials dispute the assertion that the plant will lower property values or harm agricultural land.

"The permits and the operating conditions that we have to meet for emissions will be some of the strictest in the country and our facility will not degrade the agricultural production of that area in any way," SME General Manager Tim Gregori said.

Some of the best wheat-growing land in the world —located north of Great Falls — survived the Anaconda Company's uncontrolled emissions for years, he noted.

Gregori said he would "be surprised" if there are landowners with property that would be touched by the plant who haven't been contacted.

"We've made a concerted effort, on more than one occasion, to contact all the landowners," he said.

Scott Urquhart said he shares the concerns of his neighbors.

"They're good friends of mine," he said.

But he added that SME went out of its way to address concerns about pollution and other issues. The power plant will be a public service, and will probably be the cleanest plant in the world, he said.

He said the petition submitted by neighbors against the rezoning was disappointing because everybody seemed to be on board in the beginning.

The criticism from neighbors is tough, he acknowledged.

"It's not like I'm making a million dollars on this thing," Urquhart said. "It's not true. I think the community needs the power. I think it's cleaner power than some of the opponents are projecting it to be."

For tax purposes, the total market value of the five parcels of agricultural property is $211,309, according to Cascade County. As industrial property, it will be worth more.

Reached earlier this week, Mary Urquhart, Duane's wife, said she and Duane had no comment, but first she offered a brief observation.

Opponents, she said, portraying her husband as the "worst person," adding "it's terrible what they're doing."

"They bombarded us with all kinds of stuff that's not true," she said. - Karla Puckett, The Great Falls Tribune

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CAN BIODIESEL COMPETE ON PRICE?

Some people like biodiesel because it is renewable and pollutes less than regular diesel fuel.
Others are intrigued by its potential to reduce America's dependence on foreign oil. That political and environmental allure has generated plenty of buzz this year.

What no one has demonstrated yet is whether biodiesel, as a business, can compete on the key factor for many consumers — price.

Imperium Renewables, a Seattle-based startup, has been obsessing over a business model it believes can beat regular diesel at the pump. The company says biodiesel can win at what it calls the "triple bottom line" of environmental, political and economic benefits.

The strategy relies on economies of scale. Imperium is building the nation's largest biodiesel refinery at the Port of Grays Harbor on the Washington coast, capable of supplying 100 million gallons a year — one-tenth of all the diesel burned in the state.

Photo by Eric Martin of Imperium Renewables here:

[seattletimes.nwsource.com]

Once finished in June, the plant will depend on varied raw materials, technical know-how and efficient transportation to make biodiesel priced on par with diesel. Imperium says it can compete as long as crude oil stays above $43 a barrel.

But many uncertainties lie ahead.

It announced the big refinery when oil was at $72 a barrel; now it's around $62. And the project's initial $40 million budget jumped to $55 million, then $65 million, after soft soil on the Grays Harbor site added to construction costs.

Imperium, which previously attracted $10 million in venture capital, is in the midst of raising up to $75 million more for its expansion. It had collected $43 million toward that goal by mid-November, according to a filing with state financial regulators.

Imperium founder and President John Plaza said he expects the company to turn profitable by 2008, with margins "as high as I can get them."

"You have to be competitive on a cost basis, not just for the environmental or social play," said Plaza. "Otherwise, this would never grow the way we want it to grow."

Competing on price would have sounded absurd three years ago, when the company started.

Diesel was selling for $1.60 a gallon and biodiesel was around $2.80. But during the past 18 months, as Imperium honed its methods while making biodiesel at a 5 million gallon-per-year plant in Seattle, the economic landscape shifted.

Hurricanes damaged Gulf Coast petroleum refineries, and tensions flared in the Middle East. In August, diesel in Seattle cost more than biodiesel, averaging about $3.42 a gallon versus $3.29.

It is no coincidence that around the same time, some of the world's largest fleet operators — Wal-Mart, FedEx and UPS — started sniffing around the Seattle startup to learn more about biodiesel.

Lately, the price advantage has flipped back to diesel, but it's slim — $3.03 a gallon versus about $3.29 for biodiesel in the Seattle area.

If Imperium can continue to squeeze costs, it could morph from a cottage-industry leader into a player in a U.S. market that burns 63 billion gallons of diesel a year.

Nationally, there are several companies trying to prove biodiesel isn't just for altruists anymore. One competitor, Bioselect Fuels of Galveston, Texas, has oil-industry veterans in management, and investment capital from Chevron. It says it is pursuing a strategy similar to Imperium's, using large-scale refineries, cheap ocean transportation and diverse sources of vegetable oil.

"This is far beyond a cottage industry at this point," said Jenny Ligums, Bioselect's vice president of business development. "It comes down to quality and price."

In 2005, Americans consumed about 75 million gallons of biodiesel, according to the National Biodiesel Board. This year, that figure is expected to roughly triple. New refineries are being announced almost on a weekly basis, bringing refinery capacity up to 1.4 billion gallons a year.

Eric Bowen, an energy expert with Sigma Capital in San Francisco, said that among the 100 biodiesel business plans he's reviewed there are three types of companies: agribusiness giants like Archer Daniels Midland with lots of cash and talent; old hippies working on small projects that will mostly fail; and a new breed of "pure-play" venture-backed companies focused on making large volumes of biodiesel.

Imperium, he said, is in the third camp. Bowen said he's not sure the company has "a secret sauce" for success, but Chief Executive Martin Tobias, who took Seattle-based Loudeye public in the dot-com heyday, has to be taken seriously.

"Whether these guys are riding a bubble of biodiesel or building a business for the long term is a fair and open question," Bowen said. "But Martin and his team certainly know what they are doing."

From seeds to fuel

The biodiesel business hinges, in part, on raw material, so-called "feedstock." It starts with seed crops that are harvested and crushed into vegetable oils — think soybean, canola, palm.

Refiners like Imperium run the vegetable oil through a refinery to make fuel that can run in any diesel engine. Imperium sells the fuel to distributors, who haul it to fleet pumps and retail stations.

The business model is logistically daunting because there are no abundant oil seed crops near the West Coast. Imperium buys bulk soy oil from Iowa for about $2.70 a gallon, including about 25 cents per gallon for transportation by rail car, Plaza said. Taken together, raw materials and transportation account for more than 80 percent of Imperium's costs.

Since raw oil is crucial, Plaza said, the company wants to be sure it does not depend on a single source. That's partly why Imperium chose Grays Harbor. With an ocean port, it can import Malaysian palm oil for $2.07 a gallon, about 60 cents a gallon cheaper than Midwestern soy oil.

Palm oil has its drawbacks. Biodiesel made from palm oil clumps in cold weather, meaning only customers with engine heaters can use it. Rainforests in developing countries are sometimes clear-cut to plant palm — which angers environmentally minded customers.

Plaza tries to downplay palm's shortcomings. The Grays Harbor refinery will use palm oil for only 30 percent of production, with the rest coming from the Midwest, he said.

Palm-derived biodiesel will not stall engines, he said, because Imperium's distributors will sell it only to customers with heaters. Plaza says Imperium's contract provides palm oil exclusively from sustainable farms, and it plans to perform audits to make sure that proviso is honored.

There's been talk of Eastern Washington farmers growing canola seeds as a local source of vegetable oil, but the idea has sputtered due to a lack of processing facilities.

Imperium also is competing on technical know-how. The company is building the refinery itself, rather than using an established firm for engineering and design. Such a company would guarantee all equipment will work but would charge 50 to 60 percent extra, Plaza said.

Instead, Imperium has hired engineers and consultants to design a proprietary refining technique. Plaza will say only that the plant will have fewer moving parts, and will be one-third the size of comparable refineries.

Though the cost has risen to $65 million, Plaza said the refinery will still be competitive, because it is a one-time expense.

Transportation links

Besides cheap land, supportive local officials and available labor, Plaza said Grays Harbor's edge lies in transportation.

The port will allow Imperium to barge some of its refined biodiesel to California at 3 cents a gallon, while rail would cost four times as much.

It is technically feasible to ship biodiesel through oil pipelines. But Plaza said the oil companies aren't interested in helping out a rival.

Government has certainly helped biodiesel compete. Imperium does not receive direct subsidies for making it, but distributors get a $1 a gallon discount on the fuel's federal excise tax, a savings that can be passed to consumers.

Last year, Washington became the second state to mandate that 2 percent of all diesel in the state be biodiesel by November 2008. That created a guaranteed demand for 20 million gallons a year. Local governments like King County Metro and the city of Seattle are also among Imperium's best customers. Plaza says he's gotten a lot of support from elected officials and travels once a month to Washington, D.C., to lobby for their help.

But he bristles at critics who say biodiesel can't live without subsidies. Like the ethanol lobby has said for years, Plaza notes oil companies get billions in tax breaks and subsidies for domestic drilling, plus national defense to protect oil shipping routes — costs that don't show up at the pump.

The risks

Of course, plenty could go wrong for the industry, or for Imperium. If refiners cut corners and make low-quality fuel that damages engines, biodiesel would get a bad name.

An explosion or accident could damage equipment. Droughts or a surge in demand could drive up the cost of the feedstock, or some of America's agribusiness giants could get a stranglehold on the supply and dominate the biodiesel market.

It's also possible that oil producers could boost output, lowering gas prices and causing Americans to lose interest in alternatives.

But there are positive signs. Big biodiesel customers say they are happy and want more.

Jim Boon, manager of vehicle maintenance for King County Metro, said the bus fleet burns about 1 million gallons of biodiesel a year, with plans to double by May.

Boon said there was a "teething" phase when Metro made the switch, because the fuel's cleansing effect dislodged engine gunk and clogged fuel filters, which can slow or stall engines. Once the filters are cleaned, the fuel performs as well as regular diesel, he said.

Metro started buying biodiesel after a May 2004 directive from King County Executive Ron Sims, who wants to reduce carbon emissions. But because of wild swings in diesel prices, Boon said, biodiesel is making more sense financially.

"If you graph it out, biodiesel's price is a pretty flat line," he said.

It's unlikely biodiesel will show up at most corner pumps anytime soon. Only 3 percent of passenger cars and trucks in the U.S. burn diesel. Most diesel customers operate commercial trucks and heavy machinery, and it can be difficult to make them switch from what they know.

Case in point: Next door to Imperium's South Seattle refinery, diesel-powered cement trucks from Glacier Northwest roll by day after day. Imperium has tried to sell them biodiesel.

So far, Glacier hasn't bought a drop. A manager said he will consider it when biodiesel beats regular diesel on price.

Related PDF file here:

[seattletimes.nwsource.com]

- Luke Timmerman, The Seattle Times, courtesy Dick Seelye

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TRANSIT NEWS

COMMUTER LINE POISED TO REACH MILESTONE THIS WEEK

CHESTERTON, IN -- The South Shore commuter railroad will reach a milestone it hasn't touched in nearly half a century when passenger No. 4 million for 2006 boards a train this week.

The South Shore is likely to reach the milestone Tuesday or Wednesday. After weekend numbers are in, officials of the Northern Indiana Commuter Transportation District will be able to predict Monday which day ridership will hit the 4 million mark.

"The last time more than 4 million riders took the train was in 1957," district spokesman John Parsons said. Ridership totaled 4.2 million that year.

The milestone signifies a return of riders to the rails. More people have been using the line since an all-time ridership low in 1978 with 1.46 million.

In 1977, Lake, Porter, LaPorte and St. Joseph counties formed the Northern Indiana Commuter Transportation District, and the South Shore began to receive government subsidies.

"Ridership started going back up as public funds began to be funneled into the operation and it began buying more cars," Parsons said.

In recent years, numbers have started to climb higher because of traffic congestion and spiraling gas prices. - The Associated Press, The Fort Wayne News-Sentinel

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COUNTY EXPANDS TRANSIT IDEAS

SAN BERNARDINO, CA -- San Bernardino County transportation officials are taking a proposal to extend passenger railroad service to Redlands to the three cities affected in hopes of winning support for the plan.

Redlands and San Bernardino weighed in last week and Loma Linda is expected to review the plan next month.

The support of the cities through which the 9.1-mile line will run and where seven stations will be added is crucial for San Bernardino Associated Governments to seek federal funding for the project.

The proposal calls for an additional Metrolink station to be built in San Bernardino. The six other stations would be part of a connecting light-rail service that is being referred to as Redlands Passenger Rail, though it has no formal name yet.

SANBAG also asked the cities to endorse transit-friendly land-use policies that allow for denser housing and commercial development near the stations.

The cities have voiced general support for the concept but some details have raised concerns in Redlands.

At a joint city council/planning commission meeting on Tuesday, some city officials and a prominent property owner questioned the proposed location of a downtown station at Orange and Eureka streets.

George Krikorian, owner of the Krikorian Theatre, urged the city to reject a station next to his theater, saying it would destroy his business and not contribute to economic development.

"SANBAG's primarily talking about wanting to build a station on property I own," he said.

Ultimately, the council and commission voted to endorse the idea but leave the location of the downtown station to be decided later.

The proposed sites for the three other Redlands stations, at California Street, Alabama Street and the University of Redlands, where the line would end, drew no objections from city officials.

Mike Bair, director of transit and rail programs for SANBAG, said he has asked Redlands to help set up a meeting with Krikorian to discuss the site. He said SANBAG officials believe a station there could draw passengers to the Krikorian plaza and other businesses in the area.

However, Bair said the agency is open to other sites.

"The downtown location is still somewhat flexible," he said.

In San Bernardino, city officials have been supportive of three proposed stations, including the proposed San Bernardino Transcenter at E Street and Rialto Avenue, which will be part of Omnitrans' proposed rapid-transit bus line.

San Bernardino officials, who had a joint planning commission/city council meeting on Monday, took no vote because the meeting was not properly publicized. Officials said they will vote on the plan next month.

The other two stations would be at Mill Street near Waterman Avenue and Tippecanoe Avenue near the Loma Linda city border.

Although no stations will be in Loma Linda, officials there have been asked to explore transit-oriented development that could fit with the project, Bair said.

Bair said he hopes to take the plan -- with the proposed locations for the stations settled -- to the full SANBAG board to vote on by March.

The agency could apply later in the spring for $75 million from the Federal Transit Administration to match the $75 million in Measure I sales-tax funds set aside for the project.

The extension is still 10 to 12 years from construction, with several more intensive studies required as part of the process. Officials say approval of the plan is an important step in moving ahead with the project. - Imran Ghori, The Riverside Press-Enterprise

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METRA GETTING RAIL LINE VIEWS

CHICAGO, IL -- Metra wants to know who travels north and south and east and west to and from the Fox Valley on a daily basis, and how they get there.

Through Dec. 28, commuters are being asked to participate in an online survey about the proposed Suburban Transit Access Route -- or STAR line -- along the Elgin, Joliet and Eastern railroad tracks.

The 55-mile line would be the first suburb-to-suburb commuter railway in the nation, linking almost 100 communities from Joliet to Hoffman Estates -- with stations in Aurora and Naperville -- and then on to O'Hare International Airport.

Millions of dollars have been spent by several communities, including Naperville and Plainfield, which both have set aside land in areas of proposed STAR line stations.

The line would originate in Joliet and travel north along the EJ&E rail corridor with stops in Plainfield, Naperville (one at 95th Street and one at North Aurora Road), Aurora, Warrenville, West Chicago, Hoffman Estates, Schaumburg, Arlington Heights, O'Hare and Rosemont.

Metra is gathering data on commuters' current habits, such as mode of transportation, time it takes for daily round trips, and if and how they would use the STAR Line.

"Our goal is to get a full-funding grant agreement for the projects, including the STAR line," said Judy Pardonnet, Metra director of media relations.

To do that, Metra must prove that alternative means, such as commuter buses, do not meet transportation needs.

Metra hopes to makes its case for funding inclusion in the next federal transportation bill from the Federal Transit Administration.

It is estimated that the STAR line would serve 2.8 million people; link to major business centers such as BP Amoco and Woodfield Mall, as well as area colleges and hospitals; and allow for seamless connections along four other Metra lines -- North Central Service, Union Pacific West, Burlington Northern and Milwaukee District West. - Jennifer Gotz, The Courier News, The Sun-Times News Group

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THE END