Senator John Thune

Communities and towns across South Dakota stand to gain thousands of new jobs, increased business opportunities and vast economic growth if the Dakota, Minnesota, and Eastern (DM&E) Railroad's plans to expand and upgrade its rail line become a reality.

I, along with Senator Johnson, Congresswoman Herseth, and Governor Rounds, continue to support this project because of the direct, positive impact it would have on our state's economy. In addition to creating thousands of jobs throughout South Dakota, this project would improve our nation's energy independence and increase competition within the railroad industry, which would lower transportation costs for agricultural producers, ethanol plants, and other shippers.

With 11 ethanol plants in our state and five more under construction, South Dakota's budding alternative fuels industry and the ag producers that supply it could benefit greatly from reduced transportation costs. Just recently, I attended a groundbreaking ceremony for a new soybean lab in Harrisburg, and this weekend I will participate in another groundbreaking for a new Broin ethanol plant in Davison County. As more of these businesses continue to spring up across the state, there will be an increased need for additional rail capacity. In turn, with greater rail capacity, biofuel facilities will have a greater incentive to set up shop along the improved rail lines.

Recently, the U.S. Department of Agriculture (USDA) issued a report on the DM&E upgrade project noting that the improved rail line would lower transportation costs and increase corn prices in South Dakota and Minnesota. In particular, the USDA report indicated that an upgraded DM&E line could improve agriculture producers' bottom line and save taxpayers $240 million per year in farm payments for corn alone. Additional savings to the federal government could also be seen when considering other crops such as wheat, oats, soybeans, oil seeds, and sorghum. Simply put, this report underscores the broad benefits of the DM&E upgrade project - things the South Dakota delegation has been talking about for years.

Currently, the DM&E Railroad is awaiting a decision from the U.S. Department of Transportation on its $2.3 billion loan application. Contrary to misinformation by opponents of this project, such loans must be repaid with interest and applicants are required to provide sufficient collateral to ensure that both the federal government and taxpayers are protected against default. If this loan is ultimately approved, the majority of the $6 billion project would be funded by private investors.

The DM&E upgrade project is a win-win for South Dakota. I'm hopeful we'll have a positive decision soon.