More than 16 years after announcing plans to build a new 260-mile rail line across southwest South Dakota into the Power River Basin coalfields of Wyoming, the Dakota Minnesota & Eastern Railroad says it will “defer indefinitely” the project.

     The Sioux Falls-based DM&E…now owned by Canadian Pacific Railway…had been opposed by ranchers and environmental groups from the initial announcement of the $6-billion dollar coal line, but it was the marketplace that ended the project.

The Canadian Pacific says today that it’s mothballing the plan 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, with fears that new regulations to limit greenhouse gases will make coal even less attractive to utilities in the future.

The proposed coal line…which would have been the longest new rail line in the country in more than a century…would have started at Wall in the east and crossed the Southern Black Hills through Fall River County before entering Wyoming.

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