Indiana Line OK’d for Spur

Federal regulators cleared the way for Indiana Rail Road to begin building a rail spur toward a new Peabody Energy coal mining site in southwestern Indiana.

IRR, a 500-mile regional carrier that operates in that state and Illinois, had wanted to build a 5.2-mile track segment off its mainline at Dugger to serve the Bear Run coal mine Peabody is developing.

But the short line wanted to move quickly once Peabody signaled its intentions, and asked the Surface Transportation Board for a fast-track declaratory order that the project represents only a spur that does not require a new-line approval process.

Even that took some time, however, so that IRR prodded regulators last month by saying it “urgently” needed them to act on the petition. Several weeks later, the STB said it agreed with the Indiana carrier’s filing, and IRR can build its spur track.

At a time when the Obama administration was trying to funnel money to quick-start construction projects that could boost the economy, IRR said in March this was a “shovel ready” plan that could go into construction even this month pending the STB nod. The carrier figures the spur might cost $17 million to build initially, with perhaps another $5 million in related costs over time.

It is also under a time pressure. While Peabody had been eyeing Bear Run for a while, once it decided to build out that mine Peabody also said it would start production in this year’s second half. IRR will need at least the rest of this year to complete the spur, and meanwhile any coal coming from the mine will be trucked to regional customers.

Although April was half gone before the STB ruling came down, a company spokesman said some work can get started almost immediately. The hope is to get it done before yearend because “we want to avoid getting into the harsh winter months” that could make track work difficult, he said.

Once complete, the spur will allow IRR to haul some of the 2 million to 3 million tons Peabody plans to mine from Bear Run next year. And it will be in place as the mine ramps up over time to as much as 8 million tons yearly.

Contact John D. Boyd at jboyd@joc.com.