The Dakota, Minnesota & Eastern Railroad Corp. is another step closer to accessing the low-sulphur coal reserves in Wyoming's Powder River Basin (PRB) after the company won environmental approval by the Surface Transportation Board.

DM&E's plan to spend as much as $2.5 billion to become the third railroad to serve the PRB won the environmental approval for construction of 262 miles of track connecting the fields with its existing track. The news was issued in a STB decision issuance posted at the STB website on Friday. That decision sets the stage for final board approval of the project as early as Feb. 6.

DM&E has said that it could ship 100 million tons of coal a year from the PRB, cutting into the 400 million tons annually being split between Union Pacific and BNSF Railway.

The board can rule as soon as 30 days after publication of the environmental statement in the Federal Register on Jan. 6, said STB project manager Victoria Rutson. The Agriculture and Interior departments, as well as the U.S. Coast Guard, must also clear the plan, she said.

The environmental ruling was ordered by a U.S. Appeals Court that told the board to review the effects of noise, vibration and air quality from the railroad's plan.

DM&E will also need Federal Railroad Administration approval for a $2.5 billion Transportation Department loan, in addition to clearance from the Army Corps of Engineers.